Poll Position: How to avoid the fiscal cliff?
The election is over, but there is real work to be done in Washington before President Obama even begins his second term. On Jan. 1, about seven and a half weeks from now, we take a flying leap over the fiscal cliff unless Obama and Congress can strike a deal to avoid it. Oh, and the debt ceiling will probably have to be raised again before the end of 2012, too.
How should Obama and Congress steer us away from the fiscal cliff? (Please vote for one tax option and one spending option)
- Raise tax rates (53 Votes)
- Cut spending across the board, cap future increases (48 Votes)
- Reform entitlements to slow spending growth (46 Votes)
- Close tax loopholes (45 Votes)
- Focus on defense, other discretionary spending (39 Votes)
- Do nothing; bring on the fiscal cliff! (19 Votes)
- Be revenue-neutral, spark growth to raise revenue (18 Votes)
- Create a VAT or other new tax (4 Votes)
Total Voters: 163
Loading ...This time, Obama is inheriting a mess from himself. The Congressional Budget Office estimates that going over the fiscal cliff would plunge us back into recession and push the unemployment rate back above 9 percent. So it’s a pretty darn important issue.
If Bob Woodward’s recent book portrayed him accurately, as a man who misreads his negotiating partners and overestimates his ability to best them, he’ll need every bit of those seven and a half weeks to reach an accommodation with the still-Democratic-held Senate and the still-GOP-led House.
(Obama’s first order of business? He’s leaving next week for a trip to visit three crucial allies of ours: Thailand, Burma and Cambodia.)
By all accounts, Obama and Congress will be taking another shot at the kind of “grand bargain” they nearly reached in the summer of 2011 before Obama reportedly tried to squeeze more revenue out of the deal and Speaker John Boehner balked. In practical political terms, this means Obama and Boehner have to cut a deal: The Senate has been an inoperable mess the past two years, there appears to be no bridge between Boehner and Senate Majority Leader Harry Reid, and in his post-re-election afterglow Obama can afford to twist the arms of Senate Democrats even without Reid’s cooperation (and maybe some House Democrats without Nancy Pelosi’s help) if that’s what it takes.
In practical policy terms, we can expect some combination of more revenue and less spending. Any more detail beyond that is where it gets cloudy.
More revenue can take a lot of forms: Higher tax rates, fewer tax loopholes, some combination of the two, something totally new (such as a federal consumption tax, like the VATs in Europe). In reality, the revenue situation is not going to improve until the economy gets back to its pre-recession self.
Likewise, spending cuts mean different things to different people. In Washington, a spending “cut” usually really means slower increases in spending than would have happened otherwise. That has worked in the past, but time is no longer on our side. The only way merely slower growth in spending would work is if it takes place in a serious way in the main drivers of budget deficits: Social Security, Medicare and, to some degree, Medicaid.
So, what’s the best way to go about each problem? That’s this week’s Poll Position question. See the choices in the nearby poll and vote — you’ll be able to select two, preferably one on the tax side and one on the spending side — and then explain your position in the comments thread below.
– By Kyle Wingfield
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303 comments Add your comment
Bye Bye Cheesy Grits
November 9th, 2012
11:50 am
Thats a cut equivalent to $50 in their pocket, per pay period…lettuce just suppose?
50 bucks puts alot of bologna sandwiches on alot of tables for poor people.
You have no idea what your talking about.
Oblama
November 9th, 2012
11:51 am
grits – Romney was within the law. He gave millions to charity and that reduced his % of tax but you know that. He has paid more tax and donated more to charity than all the Dems in Congress, Bill Clinton and Obama included. Hillary wrote off Bill’s worn out underwear. Obama’s donation to charity is miniscule, Biden’s is non existent. Go investigate them.
Halftrack
November 9th, 2012
11:51 am
The “fiscal cliff” is too large to have a good solution in 2 months time. Dr. Adrian Rogers, pastor, said it best:
” You cannot legislate the poor into freedom by legislating the wealthy out of freedom. What one person receives without working for, another must work for without receiving. The government cannot give to anyone anything that the government does not first take from somebody else. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that my friends is about the end of any nation. You cannot multiply wealth by dividing it. “
America is at a crossroads and we must seek the ancient path of the good way and the one that works.
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
11:51 am
Maybe the Dems won because they have superior technology – no more horses and buggies, no more bayonets, no more out houses, no more telegraphs and Pony Express riders.
iggy
November 9th, 2012
11:52 am
What about $100 worth of Grits per pay period then. Is that enough. How much is enough?
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
11:52 am
Hey, Sheldon Adelson, how you like that Citizens United now?
iggy
November 9th, 2012
11:53 am
“Maybe the Dems won because they have superior technology”
Well they did hit their target areas and maximzed their opportunities. Credit where credit is due.
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
11:53 am
Is this the first President capable of multi-tasking?
sounds like it…..
Oblama
November 9th, 2012
11:54 am
I don’t care if Obama travels out of country….. he won’t be missed here. Have fun and return home safely.
Kyle Wingfield
November 9th, 2012
11:54 am
It appears that my fixing the poll settings has wiped away the earlier votes. The good news is, those of you who only got to pick one option before can now pick two, as it was supposed to be all along.
Tiberius - pulling the tail of the left AND right when needed
November 9th, 2012
11:55 am
Yeah, Finn, ’cause it’s always so much better to negotiate issues that may or may not bring down your country’s economy by fax.
Too bad you voted back in the Children’s Table.
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
11:55 am
I hear Kyle uses a runner to send in his blog posts. After it comes off the Selectric, the runner takes it to the guy working on teh interwebs.
All-American Angry White Male (The vanishing breed)
November 9th, 2012
11:56 am
“Yeah, Cons don’t know we can work by phone, fax, video, email, etc. Always have to be in the room in case the landline rings!”
Why doesn’t the idot conduct his business with Thailand, Burma and Cambodia bu “phone, fax, video, email, etc” instead of spending millions to make the trip?
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
11:57 am
those of you who only got to pick one option before can now pick two
Cons been voting twice all week!
iggy
November 9th, 2012
11:58 am
Perhaps Daddy Longlegs tax policy should consist of handing out cash just for us all being good soldiers or taking out the trash or cleaning our rooms or for not using instant grits…an allowance if you will…
yuzeyurbrane
November 9th, 2012
12:00 pm
Kyle, your poll construct is inartful and will probably lead to inaccurate results. You should have included one option of “spending cuts and tax increases” which most people understand. I think the 2 vote instruction you gave is confusing. Factually, you are just wrong about Social Security being a driver of deficits. It is off the general budget and is not included in deficit calculations. Further, it has not contributed one penny to the deficit to date and has a huge multi-trillion dollar Trust Fund balance invested in safe interest earning U.S. Treasury bonds–the same investment that is probably part of your 401-k and is also held by most billionaires, banks, stock brokers and many foreign countries. Until last year in fact, the annual revenue from FICA taxes exceeded the SS payments to Seniors. There was a shortfall last year which will probably continue until the economy improves FICA revenues but that shortfall was paid by earned interest on the invested U.S, Treasuries combined with some redemptions. Even if there are continued shortfalls, there is enough in the Trust Fund investments to continue paying retirees 100% of their earned SS benefits until at least 2033. I hope the rest of your “facts” are more accurate.
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
12:00 pm
hey, i like instant grits! Cheesy instant grits….
Richard
November 9th, 2012
12:01 pm
If they’re smart (I’ll give you a minute to stop laughing your arse off), they’ll kill two birds with one stone by striking a deal to improve social security.
What am I talking about? Get rid of the SS cap that says you don’t have to pay into it on income above $200,000. This cap is one of the most asinine things going on right now since it basically forces SS as a regressive tax.
Maybe then, Obama gets the “rich pay a little more” and the GOP avoids the increase in tax rate.
I’ll hold my breath.
Oblama
November 9th, 2012
12:02 pm
My offer stands: I bet my house against yours that the Fed debt won’t be ONE CENT lower on the last day of Obama’s 2nd term than it is today. Hope I am wrong but I don’t think I will be moving.
1961_Xer
November 9th, 2012
12:02 pm
Trillion dollar budget deficits are unsustainable. Prediction: This president is presiding over the demise of the U.S. does anyone really think that we can be 20+ trillion in debt four years from now and our country survive as we know it? Seriously? And if Democrats hold congress/presidency for 8 more years, that goes to $27+ trillion. That is like having $50k in income and being $250k in Credit card debt. It is not likely the U.S. will EVER grow enough to reduce that kind of income/debt ratio.
And when the U.S. goes down, so does the world. No recovering from that kind of fall … even in the lifetimes of our children.
Sorry, but this election was about the long term survival of our country… and the country voted to go bankrupt in about 10 years.
Tiberius - pulling the tail of the left AND right when needed
November 9th, 2012
12:02 pm
yuz, you’re living in a fantasy world on Social Security.
Raiding the “trust fund” to pay for things today is deficit spending. If you don;t have the SS revenues to pay back the IOU’s (and we DON’T) that is deficit spending.
Peddle your fiction elsewhere.
iggy
November 9th, 2012
12:03 pm
“hey, i like instant grits! Cheesy instant grits….”
For better or worse I fear many people will begin to have the opportunity to get acquainted with such fine dining, as after losing their job, is all they will be able to afford.
“What, me worry”
Hillbilly D
November 9th, 2012
12:04 pm
In my opinion, there’s only one way to go but the chances of it happening are slim and none.
First off, cut spending, across the board, whatever percentage you figure it needs to be. If you start the “but we can’t afford to cut there” game, nothing will get done (see last few years).
Second, start getting rid of all deductions, subsidies, credits, etc. Move toward taxing all income the same. You make X amount of dollars, you pay X amount of taxes. That’ll take many years to phase in but you might as well get started.
Once those two things have been done, and only then, we can talk about raising taxes, if necessary. As we’ve seen over and over in the past, if you start with the tax increase, the spending cuts part of the deal will disappear. I don’t trust a one of them up there to keep their word on anything.
Do I think this will happen. No. They’ll go to the cliff again, come up with some kind of “compromise” and kick the can a little farther down the road.
Oblama
November 9th, 2012
12:05 pm
Another option would be to let China foreclose.
iggy
November 9th, 2012
12:09 pm
Finn, you’ve given inspiration…Govt Cheesey Grits!!
Dress that line comrades and EAT THOSE CHEESEY GRITS…LOSER!!!
MarkV
November 9th, 2012
12:10 pm
“MarkV’s blather at 11:29 shows he’s incapable of admitting he was wrong on his earlier point.”
Tiberius’ worn out, stupid response: To proclaim his victory.
Oblama
November 9th, 2012
12:10 pm
Ask China and Japan if they will accept the states that voted Obama as payment of debt.
jconservative
November 9th, 2012
12:12 pm
“How to avoid the fiscal cliff?”
I would say the most important thing is for both sides not to take anything off the table. And this will be the most difficult part of resolving the issue. Since the election both sides are taking items off the table.
For example, in his column Kyle takes over 30% of spending off the table. “…the main drivers of budget deficits: Social Security, Medicare and, to some degree, Medicaid.” Where is defense?
Defense must be on the table.
The president and the Democratic Senate want more revenue. They will get it starting 12/31/2012 when the Bush and Obama tax cuts expire. Nobody has to vote on any bill, nobody has to sign a bill. It is a done deal.
The president and the Republican House want spending cuts. They will get their spending cuts on 1/2/2013 when the sequestered spending cuts go into effect. $110 Billion the first year. And, like the revenue increase, nobody has to vote for anything or sign anything. It is a done deal.
This is a deal done by the Republicans and Democrats in Congress and a Democratic White House.
You do not like the deals? How bad do you not like it? Do you hate it enough to compromise on “This” in order to get “That”?
If either side refuses to compromise, we are headed over the cliff.
And that may be the best solution for the long term health of the country.
Oblama
November 9th, 2012
12:12 pm
GO DAWGS ———– TAKE AUBURN OUT BEHIND THE BARN!!!!!!!
Kyle Wingfield
November 9th, 2012
12:12 pm
yuze @ 12:00: I’ll admit the construct is imperfect. But I don’t know how people could be fooled into thinking “spending cuts and tax increases” isn’t an option when both the poll header and the text of the post tell them to vote for one tax option and one spending option, and different forms of both spending cuts and tax increases are options. In any case, I don’t know why I should be any more worried about people voting and commenting without reading, or understanding what they’ve read, than I am about every other post I publish.
As for Social Security: I see you believe the fact that a different part of the federal government has to pay for it — that’s what those T-bonds represent, after all — means it’s not a problem. I strongly disagree. The fact that SS funds were put in T-bonds necessarily means the money was already spent, and that new money has to come in to make up for it and pay back the bondholders (us). Where do you think that new money will come from? Us. Paul is no better off when Peter repays him with more money he borrowed from him.
And the fact that a lot of other investors hold T-bonds doesn’t make me feel any better, frankly. In the end, that just means there are more hands out asking to be repaid. They are “safe” investments right up until the moment they aren’t safe. That’s the whole problem!
Kyle Wingfield
November 9th, 2012
12:14 pm
“in his column Kyle takes over 30% of spending off the table. … Where is defense?”
It’s not in my column, jconservative, but it’s right there as one of the poll options. Two options, really, given that “cut spending across the board” necessarily includes defense with everything else.
Henne
November 9th, 2012
12:15 pm
I voted for across-the-board cuts, but there is great opportunity for huge short-term savings in defense that absolutely will not jeopardize our security.
Tiberius - pulling the tail of the left AND right when needed
November 9th, 2012
12:15 pm
MarkV’s tired, worn out response: deflect and cower.
snoqualmiefalls
November 9th, 2012
12:17 pm
Let us explore what Peter Morrison, the Treasurer of Hardin County in Texas, Republican, has to say about our President and the folks who voted for him. “Maggots” was the genteel term he used for folks voting for our President. The country is” lost”… so what is the answere ???? Leave the Union of course… a very natural reaction for confederates. Please leave and welcome the Republic of Mexico as your new fedral government.
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
12:18 pm
McConnel needs to grab an olive branch and walk shoeless from the Capitol building to the White House and present Big O with the branch….then we can talk.
George P. Burdell
November 9th, 2012
12:21 pm
I went back and looked at federal spending back in 2001 to see what it looked like before the tax cuts, wars, Medicare part D, Bush programs, Obama programs, etc. I looked as spending in the major categories( SS, healthcare, education, defense, welfare and everything else), now compared to then. If you look to reduce expenses to $2.8 trillion ( not feasible, but much closer to current revenues ), and set spending to the same proportion as 2001, education, defense and welfare all need a reduction of 38%. Healthcare is not far behind at 30%. Surprising to me, Social Security would only need a 13% cut while everything else would only need a cut of 8.5%.
That tells me that everyone has some blame in this fight. Some will harp on defense spending, some welfare and education, and a bunch on healthcare and social security. A big problem is that social security really hasn’t increased much yet but we know it is coming. Same with healthcare ( Medicare, Medicaid). These two areas will increase automatically, we know they are going to increase without reform, and yet overall they have not, contrary to popular opinion, been the main drivers in increased spending. If we decide we cannot touch these two areas, even more drastic cuts are necessary in the remaining areas and eventually that will not cover it.
Even if we could magically raise taxes to the point that we cover current expenditures, the other categories would have to be cut pretty drastically to cover future increases in social security and healthcare. We cannot raise taxes to that level without having a devastating effect on the economy and therefore tax revenues, at least not all at one time. The sad truth is that it is past time for reform in SS and medicare but that can will most likely continue to be kicked down the road. It has simply become too difficult politically to do so. Therefore, I think we go over the cliff whether it is soon or some day we push it to in the future. I hate to be so pessimistic, but we have shown very little fortitude in dealing with the small pain and I don’t see us coming to our senses to deal with the big pain until we are absolutely forced to. The sad truth is that a significant portion of our GDP is dependant upon government deficit spending. It is going to hurt to take that away but until we do, we are just living on borrowed time and money.
Tiberius - pulling the tail of the left AND right when needed
November 9th, 2012
12:21 pm
We’ll see if Obama’s previous way of compromise, “Do it my way or else” gives way to something more adult.
It would be just like this personable, yet incompetent President to take his re-election as some sort of bargaining leverage. Given his disdain for the Constitution he has sworn to uphold, however, it wouldn’t surprise me if he tries to bluster his way past the legislative checks and balances once again.
Tiberius - pulling the tail of the left AND right when needed
November 9th, 2012
12:24 pm
snoqualmiefalls, let’s explore the issue at hand, shall we?
The post election comment thread is below.
Or you could just take some Ritalin and FOCUS!
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
12:25 pm
I say we go to Puerto Rico and say “You want to be a state? Well, we have this debt we need paid off….”
We picked up the Louisiana Purchase and Alaska by way of financial transaction……just sayin’.
Cuber, you want to be a state? Haiti….um never mind. Dominican Republic, you want to be a state?
MarkV
November 9th, 2012
12:25 pm
Henne @12:15 pm
I respectfully disagree. A short term saving by large cuts in defense spending would be counter- productive, because of the loss of jobs in the defense industry. Small immediate defense spending cuts may be the way to go, but it is the saving in the long term by reducing the huge unnecessary military expenditures all over the world that is necessary for the fiscal health of the country.
iggy
November 9th, 2012
12:27 pm
Instead of an olive branch McConnel could introduce Michelle to a orthodontist so she could rid herself of that underbite.
iggy
November 9th, 2012
12:29 pm
Cant count on Pueto Rico. Everytime the “fish are running” the govt offices are like a ghost town.
Tiberius - pulling the tail of the left AND right when needed
November 9th, 2012
12:31 pm
iggy @ 12:29:
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
12:32 pm
We could sell Texas to Mexico.
actually, that sounds really good!
Dusty
November 9th, 2012
12:32 pm
Hillbilly D
I am afraid that many Americans have dropped from their vocabulary the words: cut, manage, independence, thrift, balance and other words that spell out personal responsibility. They care more about having their”free” handouts than they care about the country.
If Americans still believed in self reliance they would not have voted for Presdient Obama whom they believe is the “Santa Claus” of government. They wanted the “giving” to keep going even as we hang over the fiscal cliff.
We can have polls from now to Christmas but it won’t make a bit of difference. Americans have been blinded by handouts, freebies, and political propaganda. We no longer see clearly.
I will manage but I fear for those who come after me. When ideology concerns only material things, the future is dull and declining. What a shame that is for the USA which was built on the premise of independence, freedom and love of country. That premise is now ridiculed. . .
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
12:35 pm
We would need to change the name “Puerto Rico” to “Obamistan”.
Hillbilly D
November 9th, 2012
12:36 pm
Leave the Union of course… a very natural reaction for confederates.
The first group to ever mention seceeding from the Union was made up of New Englanders in the War of 1812. And by the way Idaho, Wyoming, Utah, Nebraska, Oklahoma, Kentucky, West Virginia, and even Bleeding Kansas, all gave 60% or more of their vote to Romney. Nary an old Confederate state in that group.
Finn McCool (The System isn't Broken; It's Fixed)
November 9th, 2012
12:37 pm
you doomsayers really need to get a grip.
He didn’t ruin the place in 4 years, he isn’t going to ruin it in the next 4. Heck, we made it through 8 years with a retarded guy….
gdrla
November 9th, 2012
12:43 pm
Kyle – Obama is NOT inheriting this mess from himself – The REPUBLICAN Congress is somewhat involved & shares blame – the Federal budget issues are just like my personal household ones albeit much larger – increase cash flow (revenues = taxes) & reduce spending (outgo) – PUT IT ALL ON THE TABLE – and YES, I AM ENTITLED – I have worked for the past 50 years starting when I was 14 & $$ has come out of my paycheck to ensure part of my retirement – now that I am within 2 years of needing and wanting to receive it someone wants to change the rules – This mess is fixable if the leaders – including BOTH Obama & the Republican House – can put aside the partisan BS & get down to it – I do recall that Obama put it all on the table last summer & was rebuffed. And, accurate analysis of the majority of the debt over the past 80 years shows that most of it was put there by Republican (fiscal conservatives – ?) Presidents. But I do note that they did NOT veto the measures put forth by the Democratic controlled congresses of the time so BOTH parties are complicit in this issue.
Dawg79
November 9th, 2012
12:43 pm
Tell the Speaker to get in line or the cut go through. He is not the president, and he doesn’t get his way. The tax cuts for the upper income people WILL have to expire and some defense cuts WILL be on the table, as WILL some entitlment spending. Congress brought this deadline on themselves, THEY agreed to these cuts if THEY couldn’t reach a deal and THEY will now play ball with the POTUS’s ball or else. Obama tried to be too nice a guy in term 1, this time HE will execute presidential powers!