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Failed Republican Economics are at the Root of America’s Decade of Economic Woe
Blame is the act of holding responsible, or making negative statements about, an individual or group that their action or actions are socially or morally irresponsible, and as the nation nervously waits to see whether or not President Obama and Republicans can reach an agreement on the dreaded fiscal cliff, someone will take the blame if there is no deal. Many Americans are worried there will not be a deal and across the board tax hikes and spending cuts will send the economy into a recession if the two sides fail to reach an agreement, and if the cuts and tax hikes go into effect early in 2013, there is sure to be plenty of blame targeting each side for not negotiating in good faith and reaching a compromise that both sides can live with. However, a recent poll shows nearly half of Americans think the President and Republicans will not find common ground to avoid the fiscal cliff that 64% of Americans think will have a major effect on the economy.
In the ABC/Washington Post poll, 49% of Americans think there will not be an agreement to avoid the fiscal cliff, and a substantial 53% of Americans believe Republicans in Congress will be to blame versus 27% who think President Obama shoulders the responsibility if there is no fiscal cliff deal. Within the poll, 64% think the fiscal cliff will have a “major” effect on the economy, 60% think the effect will be negative, and 43% say it will have a major effect on their personal financial situation; 61% say that effect will be negative. The poll’s results do not bode well for Republicans who are intransigent on raising tax rates on the wealthiest 2% of income earners and instead, propose closing tax loopholes coupled with drastic spending cuts that affect the poor, middle class, and elderly in a reiteration of failed presidential candidate Willard Romney’s tax plan.
President Obama campaigned on, and won the election based on, raising tax rates on the wealthiest Americans, and his offer last week included $1.6 trillion in new revenue over the coming decade but largely spared Medicare and Social Security from budget cuts. As a reminder, Medicare and Social Security are funded by payroll taxes, and by statute, Social Security is forbidden from adding one penny to the deficit, but Republicans called for increasing the eligibility age for Medicare and lowering cost-of-living increases for Social Security recipients. The Republican proposal omitted any tax hikes on the wealthy, and it appears they will hold middle class tax cuts hostage unless the President agrees to their proposal which impacts how the public perceives where to assign blame. However, there has been little talk about why there is an impending fiscal cliff to begin with and as usual, the blame falls primarily on Republicans.
During the summer of 2011, Republicans insisted that spending cuts offset any increase in the nation’s debt limit even though they raised the limit during the Bush administration without cutting spending because when a Republican is in the White House, “deficits don’t matter.” As part of a “grand bargain,” the President and Speaker Boehner appeared to have negotiated a wide-ranging overhaul of the federal budget using a balanced approach to cut over $4.5 trillion from the deficit over ten years, but Boehner’s Republicans balked at even entertaining new tax revenues as part of any bargain, grand or otherwise. The anti-tax Republicans rejected the President’s proposal to cut $4 trillion from the budget and chose instead to cut a little over $1.2 trillion to preserve Bush-era tax cuts for the rich. Subsequently, the Budget Control Act of 2011 directed Congress to find another $1.2 trillion through a Joint Select Committee on Deficit Reduction (the super-committee) that was tasked with meeting and agreeing on a balanced deficit reduction package by Nov. 23, 2011.
The super-committee’s proposal, which would include tax increases and spending reductions would get a filibuster-proof, up-or-down vote in Congress, and as an incentive to the super-committee, the law included a kind of budget threat, or a “trigger mechanism on a budget bomb.” If the super-committee couldn’t agree on a balanced package of spending cuts and revenue increases, or if Congress voted it down, then across-the-board automatic cuts would go into effect with half the cuts hitting defense, half on discretionary spending, and allowing the Bush tax cuts to expire on schedule for all income earners. These automatic cuts are referred to as “sequestration,” that when they come due at the end of the year will drive the economy off the so-called fiscal cliff. At the time, Boehner told House Republicans and other key Republicans not to worry about the “sequester” because it would be devastating to defense and that “this would be devastating, from their perspective, on their domestic priorities. This is never going to happen.” In less than a month, if Republicans continue refusing to raise taxes on the wealthy, sequestration is going to happen and like the super-committee’s failure, the blame will fall on Republicans.
Republicans have not made any proposal that asks the wealthiest Americans to pay a bit more in taxes to help pay down the nation’s debt, but they have asked every American to take a financial hit. By now, most people have learned about Medicare cuts, Social Security cuts, health care cuts, and restrictions on exemptions aimed at the middle class, but unlike the President’s proposal, Republicans do not extend the payroll tax holiday every working American has benefited from, and it may be the most important part of fiscal cliff negotiations to most Americans. In fact, whether the country goes over the fiscal cliff or the President caves to Republican demands, working Americans will be hit hardest and it is all down to the GOP’s intransigence on tax increases on the rich that caused S&P to downgrade the nation’s credit, a near credit default, failure of the super-committee, sequestration, and now a dangerous fiscal cliff.
The GOP bears most of the blame for the economic woes over the past twelve years whether it was unfunded tax cuts, two unfunded wars, obstructing job creation, the credit downgrade, sequestration, and now the impending fiscal cliff. At the heart of Republican economic malfeasance is their refusal to tax the wealthiest Americans, and within a month of another economic calamity, adherence to Bush tax cuts for the wealthy is once again one of the core issues 98% of Americans will pay dearly for, and place the blame where it rightly belongs; on Republicans.