Fiscal Cliff

Accountable · Post by **Accountable** » Mon Dec 24, 2012 7:01 pm

Does anybody believe this really is a "cliff"? If it was really serious, they would (will?) just extend the deadline.

What Is the Fiscal Cliff? - Council on Foreign Relations

What are the components of the fiscal cliff?

The following set of revenue and spending measures are set to expire or take effect at year's end, representing an acute fiscal consolidation that could be further intensified by a potential showdown over the debt ceiling.

Revenue Increases

2001/2003/2010 Tax Cuts & AMT Patch. This series of legislation, often referred to collectively as the "Bush tax cuts," will expire on December 31, 2012, raising all income tax rates (top will go from 35 to 39.6 percent), as well as rates on estate and capital gains taxes. The alternative minimum tax (AMT) will also automatically apply to millions more citizens.

Payroll Tax Cut. The Social Security payroll tax holiday will expire December 31, raising the rate from 4.2 to 6.2 percent.

Other Provisions. Several other policies such as the Research and Experimentation tax credit, many of which are typically enacted retroactively, are due to sunset at years' end.

Affordable Care Act Taxes. Some provisions in the Obama health-care legislation, including increased tax rates on high-income earners, are set to take effect in January 2013.

Spending Cuts

Budget Control Act. The automatic spending cuts or sequester legislated by the Budget Control Act of 2011 will hit January 2. Half of the scheduled annual cuts ($109 billion/year from 2013-2021) will come directly from the national defense budget, half from non-defense. However, some 70 percent of mandatory spending will be exempt.

Extended Unemployment Benefits. The eligibility to begin receiving federal unemployment benefits, last extended in February, will expire at year's end.

Medicare "Doc Fix." The rates at which Medicare pays physicians will decrease nearly 30 percent on December 31.

Debt Ceiling

The debt limit, which sets the maximum amount of outstanding federal debt the U.S. government can incur by law, is currently capped at $16.39 trillion. Treasury is expected to hit this borrowing capacity again sometime in early 2013. Analysts fear another protracted debate over the debt ceiling could bring repercussions similar to those that followed the debt battle in summer of 2011, which rattled financial markets and, according to a study from the Government Accountability Office, raised the cost of Treasury's borrowing by $1.3 billion for FY2011.

chonsigirl · Post by **chonsigirl** » Tue Dec 25, 2012 6:14 am

I read on MSNBC that the tax hikes would be quite steep, just under $300 a month more for my income level. I think this is a really bad idea, the recession will never end. No 2013 IRS table is available as yet, leaving employers to keep the current tables for one or two months. That means most of us will owe at the end of the year.

The layoffs for fed. gov. jobs has begun, will accelerate in January. Alot of the long term contracted ones are already cut this month, quite a surprise to many of them. (I know of several who were laid off after 15+ years at a specific site, with small severence packages, like 2 months or less)

Accountable · Post by **Accountable** » Tue Dec 25, 2012 7:21 am

I say it's a bluff. Theatrics. The Budget Control Act was put in place in August, 2011. The same people that voted for it are still in office. Either they support its actions, in which case they are lying to The People about how terrible it will be, or they don't, in which case they are playing status quo brinksmanship and will kick the can down the road ... again.

halfway · Post by **halfway** » Tue Dec 25, 2012 8:09 am

The real "cliff" is the debt.

Unsustainable. Will likely collapse (manufactured) and allow real "change", as in command economy / socialism.

It is the way of the world in our future.

I see attacks (with the help of the media) on private property rights in the very near future. It will be through a proxy event.

Post by **Bryn Mawr** » Tue Dec 25, 2012 2:04 pm

Accountable;1414083 wrote: I say it's a bluff. Theatrics. The Budget Control Act was put in place in August, 2011. The same people that voted for it are still in office. Either they support its actions, in which case they are lying to The People about how terrible it will be, or they don't, in which case they are playing status quo brinksmanship and will kick the can down the road ... again.

Or possibly, they knew how terrible it would be when they passed it but expected the "other side" to move before the deadline to prevent the economy falling over the cliff. Now that the time has come with no movement they might well feel obliged to carry though with it for the same reasons they passed it in the first place.

Who is playing brinksmanship? I'd say the ones who have refused to acknowledge that the playing field changed a year ago.

Accountable · Post by **Accountable** » Tue Dec 25, 2012 3:28 pm

Bryn Mawr;1414105 wrote: Who is playing brinksmanship? I'd say the ones who have refused to acknowledge that the playing field changed a year ago.
Nothing changed a year ago. It was one of the closest elections in history. We still have the same executive, same party in control of the House, and same party in control of the Senate. What changed?

AnneBoleyn · Post by **AnneBoleyn** » Wed Dec 26, 2012 8:04 am

halfway;1414088 wrote: The real "cliff" is the debt.

Unsustainable. Will likely collapse (manufactured) and allow real "change", as in command economy / socialism.

It is the way of the world in our future.

I see attacks (with the help of the media) on private property rights in the very near future. It will be through a proxy event.

What does that mean?

Post by **Bryn Mawr** » Wed Dec 26, 2012 8:30 am

Accountable;1414111 wrote: Nothing changed a year ago. It was one of the closest elections in history. We still have the same executive, same party in control of the House, and same party in control of the Senate. What changed?

The Budget Control Act was put in place in August, 2011. That in itself changed the playing field.

Ahso! · Post by **Ahso!** » Wed Dec 26, 2012 8:36 am

Events cause changes in attitude too. As an example (and a slight deviation) look at how the CT shooting have changed the opinions of several current lawmakers on gun policy.

I think that as the current recession eases that will provide cover for political wavering.

Accountable · Post by **Accountable** » Wed Dec 26, 2012 9:02 am

Bryn Mawr;1414136 wrote: The Budget Control Act was put in place in August, 2011. That in itself changed the playing field.
The guys that changed the rules are the same guys that will change them again. Watch and see. Nothing's changed. We still have status quo.

Accountable · Post by **Accountable** » Wed Dec 26, 2012 9:04 am

Ahso!;1414137 wrote: Events cause changes in attitude too. As an example (and a slight deviation) look at how the CT shooting have changed the opinions of several current lawmakers on gun policy.

I think that as the current recession eases that will provide cover for political wavering.Their rhetoric changed. I'll believe opinions changed when I see votes change. I agree with you about the wavering. Watch the gun rights opinions waver as the CT news grows cold.

Post by **Bryn Mawr** » Wed Dec 26, 2012 9:12 am

Accountable;1414139 wrote: The guys that changed the rules are the same guys that will change them again. Watch and see. Nothing's changed. We still have status quo.

I'm not close enough to make a prediction but almost everyone recognises something needs to be done and that is as good a line drawn in the sand as I can think of.

Accountable · Post by **Accountable** » Wed Dec 26, 2012 10:07 am

I'll make a prediction. I say they'll posture until about mid January, then make retroactive law (meaning ex post facto, which is strictly unconstitutional but who gives a ****, right?) to extend the deadline so that they can blame each other for not doing anything. Of course, President Obama will say it is 100% the repubs' fault for not acquiescing to his immobile position. Repubs will blame the dems for trying to victimize the poor defenseless rich guys.

So my pick for the pool for Congress to kick the can down the road is late night Friday January 18, to try & stay out of the media spotlight.

Post by **LarsMac** » Wed Dec 26, 2012 10:37 am

I think they will come up with a last gasp extension by Friday.

The Markets will not tolerate much more of this uncertainty. They will come up with something Friday that lets both sides claim victory, while also giving them reason to blame the other side for its imperfection.

Post by **Bryn Mawr** » Wed Dec 26, 2012 12:54 pm

Accountable;1414143 wrote: I'll make a prediction. I say they'll posture until about mid January, then make retroactive law (meaning ex post facto, which is strictly unconstitutional but who gives a ****, right?) to extend the deadline so that they can blame each other for not doing anything. Of course, President Obama will say it is 100% the repubs' fault for not acquiescing to his immobile position. Repubs will blame the dems for trying to victimize the poor defenseless rich guys.

So my pick for the pool for Congress to kick the can down the road is late night Friday January 18, to try & stay out of the media spotlight.

LarsMac;1414148 wrote: I think they will come up with a last gasp extension by Friday.

The Markets will not tolerate much more of this uncertainty. They will come up with something Friday that lets both sides claim victory, while also giving them reason to blame the other side for its imperfection.

And meanwhile the country they are elected to govern can go to hell in a handcart?

Maybe if they were more interested in the good of the country than in their posturing they could get together and do something.

Accountable · Post by **Accountable** » Wed Dec 26, 2012 1:02 pm

Bryn Mawr;1414152 wrote: And meanwhile the country they are elected to govern can go to hell in a handcart?

Maybe if they were more interested in the good of the country than in their posturing they could get together and do something.
That goes without saying, but we don't even agree on what "good of the country" means.

Post by **Bryn Mawr** » Wed Dec 26, 2012 1:19 pm

Accountable;1414153 wrote: That goes without saying, but we don't even agree on what "good of the country" means.

This is where cross party committees with the power to carry an act through to its *final* wording and push it for a vote by the full assembly comes in.

If such a group, calling on expert advice as necessary, cannot reach consensus then paralysis an death are an almost inevitable result.

Ahso! · Post by **Ahso!** » Wed Dec 26, 2012 1:26 pm

Bryn Mawr;1414155 wrote: This is where cross party committees with the power to carry an act through to its *final* wording and push it for a vote by the full assembly comes in.

If such a group, calling on expert advice as necessary, cannot reach consensus then paralysis an death are an almost inevitable result.Our congress has so many committees that's it's almost impossible to follow. The paralysis is staggering.

Accountable · Post by **Accountable** » Wed Dec 26, 2012 3:15 pm

If they would trim their committees to only those having to do with their enumerated powers they might find the fiscal problem all but gone.

Accountable · Post by **Accountable** » Sat Dec 29, 2012 5:59 am

LarsMac;1414148 wrote: I think they will come up with a last gasp extension by Friday.

The Markets will not tolerate much more of this uncertainty. They will come up with something Friday that lets both sides claim victory, while also giving them reason to blame the other side for its imperfection.Friday came and went with no extension. But, hey, they met for a whole hour, didn't they? Now let's see if they do something Monday (12/31), continue their histrionics until the 18th as I predicted, or do something else.

Senate leaders to try to work out fiscal cliff deal over weekend - CNN.com

Accountable · Post by **Accountable** » Sat Dec 29, 2012 6:41 am

Here's a decent summary on how the fiscal cliff materialized:

Video - Breaking News Videos from CNN.com

Post by **LarsMac** » Sat Dec 29, 2012 5:48 pm

Screw it. Let's take the dive.

Just making a decision would make the stock markets feel better.

As for funding cuts,

http://www.whitehouse.gov/sites/default ... report.pdf

Post by **Bryn Mawr** » Sun Dec 30, 2012 7:08 am

LarsMac;1414484 wrote: Screw it. Let's take the dive.

Just making a decision would make the stock markets feel better.

As for funding cuts,

http://www.whitehouse.gov/sites/default ... report.pdf

Is this Office of Management and Budget supposed to be an independent cross party body? Going by the introduction I've not seen such a partisan report in all my born days

Accountable · Post by **Accountable** » Sun Dec 30, 2012 8:36 am

Bryn Mawr;1414504 wrote: Is this Office of Management and Budget supposed to be an independent cross party body? Going by the introduction I've not seen such a partisan report in all my born days

I see what you mean.

On two separate occasions, the President has put forward proposals to responsibly avoid these arbitrary cuts: irst, in the Presidentâ€™s Plan for Economic Growth and Deicit Reduction that was presented to the Joint Committee in September 2011, and second, in the Presidentâ€™s fiscal year (FY) 2013 Budget. Both of these plans made tough choices to reduce the deficit with a balanced package of spending cuts and revenue increases, with the FY 2013 Budget proposing $2.50 in spending cuts for every $1 in new revenue. Both plans included over $4 trillion in deicit reduction, including the deicit reduction in the BCA itself, far exceeding the amount that would have been required of the Joint Committee to avoid equestration. Importantly, the Presidentâ€™s proposals would ensure that deicit reduction is achieved in a way that asks the top two percent of Americans to shoulder their fair share of the burden.

Instead of working to enact a balanced deicit reduction package to avoid the threat of sequestration, some Members of Congress are focusing on unbalanced solutions that rely solely on spending cuts or try to alter only part of the sequestration. These proposals do not represent realistic, fair, or responsible ways to avoid sequestration. Unlike the Presidentâ€™s proposals, they are sharply contrary to the conclusions of numerous independent and bipartisan groups that recommend a comprehensive, balanced deicit reduction package comprised of both spending cuts and revenue increases.

Post by **Bryn Mawr** » Sun Dec 30, 2012 8:49 am

Accountable;1414512 wrote: I see what you mean.

Do I read it correctly that the entire military wage bill is exempt by Presidential order? (Pages 266 to 268)

Accountable · Post by **Accountable** » Sun Dec 30, 2012 9:54 am

Bryn Mawr;1414514 wrote: Do I read it correctly that the entire military wage bill is exempt by Presidential order? (Pages 266 to 268)

?? We must be reading different documents. The one in the link only has 158 pages

Post by **LarsMac** » Sun Dec 30, 2012 9:54 am

The report itself is from the White House.

The OMB issued the data, but the White House controls the OMB publications.

My purpose in posting that doc was to show the data, not the argument from the WH.

Post by **LarsMac** » Sun Dec 30, 2012 9:59 am

Accountable;1414517 wrote: ?? We must be reading different documents. The one in the link only has 158 pages

The PDF doc I downloaded has 394 pages.

Accountable · Post by **Accountable** » Sun Dec 30, 2012 10:04 am

LarsMac;1414519 wrote: The PDF doc I downloaded has 394 pages.
Okay, I see. It starts numbering again after page 224. I don't like this new PDF reader I have. It doesn't show me total number of pages.

Post by **LarsMac** » Sun Dec 30, 2012 10:05 am

LarsMac;1414519 wrote: The PDF doc I downloaded has 394 pages.

On the other hand, I am not sure we ARE looking at the same doc. as 266-268 are just part of the Appendix B in my copy.

Post by **LarsMac** » Sun Dec 30, 2012 10:07 am

Appendix A is the section that shows the reductions that would go into force, if we take the leap.

Post by **Bryn Mawr** » Sun Dec 30, 2012 10:16 am

LarsMac;1414522 wrote: On the other hand, I am not sure we ARE looking at the same doc. as 266-268 are just part of the Appendix B in my copy.

Yes, Appendix B shows which items are exempt and why. All of the items that I read as military salaries are shown as :-

Optional exemption exercised by President, 255(f) -- military personnel

Post by **LarsMac** » Sun Dec 30, 2012 10:19 am

Bryn Mawr;1414527 wrote: Yes, Appendix B shows which items are exempt and why. All of the items that I read as military salaries are shown as :-

Ah, I see. So, it was particularly the military salaries exemptions that caught your attention?

Post by **Bryn Mawr** » Sun Dec 30, 2012 10:31 am

LarsMac;1414528 wrote: Ah, I see. So, it was particularly the military salaries exemptions that caught your attention?

As the only one justified by Presidential order it stood out, yes.

The intra governmental payments were obvious as were the cases where a prior legal obligation exists or where the funds are a voluntary donation by an external party. Most of the others I can see the reason for but for the President to make a personal intervention in this one instance definitely caught my attention.

Another item that stood out was the $131M cost of the Sergeant at Arms and Doorkeeper of the Senate - He's well paid I thought

Accountable · Post by **Accountable** » Sun Dec 30, 2012 10:51 am

LarsMac;1414522 wrote: On the other hand, I am not sure we ARE looking at the same doc. as 266-268 are just part of the Appendix B in my copy.

I think we are. If you notice, the page numbers printed on the pages are different from the PDF page count. The information on 266-268 are numbered 30 - 32 of 158.

Post by **LarsMac** » Sun Dec 30, 2012 10:58 am

Accountable;1414536 wrote: I think we are. If you notice, the page numbers printed on the pages are different from the PDF page count. The information on 266-268 are numbered 30 - 32 of 158.

Yup. got that. It took me a while.

Thanks

Post by **LarsMac** » Sun Dec 30, 2012 11:00 am

Bryn Mawr;1414531 wrote: As the only one justified by Presidential order it stood out, yes.

The intra governmental payments were obvious as were the cases where a prior legal obligation exists or where the funds are a voluntary donation by an external party. Most of the others I can see the reason for but for the President to make a personal intervention in this one instance definitely caught my attention.

Another item that stood out was the $131M cost of the Sergeant at Arms and Doorkeeper of the Senate - He's well paid I thought

That IS a bit of money.

Accountable · Post by **Accountable** » Sun Dec 30, 2012 2:07 pm

It's the oils for the door. Very specialized.

Accountable · Post by **Accountable** » Tue Jan 01, 2013 7:24 am

I don't know the details, but it looks like they've punted ... again.

From TX senator John Cornyn's FB:

"I voted for this bill because it prevents a huge tax increase on 99% of all Texans and Americans. Nonetheless, I am dismayed at the lack of seriousness by the president on dealing with the core issues of our fiscal problems. Our spending is unsustainable and it is high time the president and his party engage in meaningful dialogue to get this county's spending under control."

Lack of seriousness by the President?!? Congress holds the federal purse strings, not the executive branch.

Accountable · Post by **Accountable** » Tue Jan 01, 2013 7:54 am

Fiscal cliff deal heads to House after Senate vote - CBS News

Ahso! · Post by **Ahso!** » Tue Jan 01, 2013 10:53 am

Just like he did with health care, Obama went and negotiated for the republicans. In sales, a person such as Obama is known as a person who has a great spiel but just cannot close a deal without giving away the store.

Accountable · Post by **Accountable** » Tue Jan 01, 2013 11:05 am

Ahso!;1414747 wrote: Just like he did with health care, Obama went and negotiated for the republicans. In sales, a person such as Obama is known as a person who has a great spiel but just cannot close a deal without giving away the store.Agreed. Wasn't that a problem of his early in his term? I seem to remember him talking for several hours with some other world leader and leaving without having closed a deal. The details escape me right now.

AnneBoleyn · Post by **AnneBoleyn** » Tue Jan 01, 2013 1:00 pm

Maybe he doesn't care about the store. Recently, Pres. Obama said if he were living in the '80's he would label himself a centrist republican. Can't say I love the sound of that, but when he was running against Hillary I immediately noticed he was to her right. Compromise seems to be his way, the 250K a year to raise taxes on I never believed he would fight to the max over it.

Ahso! · Post by **Ahso!** » Tue Jan 01, 2013 1:20 pm

AnneBoleyn;1414792 wrote: Maybe he doesn't care about the store. Recently, Pres. Obama said if he were living in the '80's he would label himself a centrist republican. Can't say I love the sound of that, but when he was running against Hillary I immediately noticed he was to her right. Compromise seems to be his way, the 250K a year to raise taxes on I never believed he would fight to the max over it.I'd label Obama a far right 80's republican. The health care deal we ended up with was far right in the 90's even.

Accountable · Post by **Accountable** » Tue Jan 01, 2013 1:34 pm

AnneBoleyn;1414792 wrote: Maybe he doesn't care about the store. Recently, Pres. Obama said if he were living in the '80's he would label himself a centrist republican. Can't say I love the sound of that, but when he was running against Hillary I immediately noticed he was to her right. Compromise seems to be his way, the 250K a year to raise taxes on I never believed he would fight to the max over it.
If compromise was his way, wouldn't we have had something passed after 2010, such as a budget?

Post by **LarsMac** » Wed Jan 02, 2013 9:23 am

Well, talk about a last minute deal:

The McConnell-Biden Plan - Graphic - NYTimes.com

Post by **LarsMac** » Wed Jan 02, 2013 9:25 am

Payroll tax increase

Allows payroll taxes to rise on Tuesday to 6.2 percent from 4.2 percent on workersâ€™ first $113,700 of income.

That could hurt.

Accountable · Post by **Accountable** » Wed Jan 02, 2013 9:29 am

But hey, they got their freeze on spending cuts, and that's what's most important, right?

Accountable · Post by **Accountable** » Wed Jan 02, 2013 9:38 am

Ahso!;1414747 wrote: Just like he did with health care, Obama went and negotiated for the republicans. In sales, a person such as Obama is known as a person who has a great spiel but just cannot close a deal without giving away the store.
Your partisan counterpart disagrees, of course:

To say that Republicans in Congress folded like a cheap suit is an insult to cheap suits

Posted by William A. Jacobson Wednesday, January 2, 2013 at 8:19am

What an embarrassment.

To say that Republicans in Congress folded like a cheap suit is an insult to cheap suits.

The â€œfiscal cliffâ€ was mishandled from day one. There was a lack of strategy and the tactics could not make up for that.

To borrow Kurt Schlichterâ€™s phrase:

a skilled lawyer understands the awesome power of being the craziest, most unreasonable and scariest guy at the table.

That guy was Obama, contrary to what the media and Democrats told you.

Obama insisted he was willing to go over the cliff, we insisted we werenâ€™t. He won, we lost.

The Republican leadership failed miserably.

Their lack of conviction is my liberation theology. Liberation from the Republican leadership. Liberation from the Republican Party as it currently exists. We need to have an â€œRâ€ after our names only because in our two-party system, third parties fail and/or hand elections to Democrats. We need to change what â€œRâ€ means. Think how bad the deal would have been if there were not a block of Tea Party congressmen with backbone.

Remember, Marco Rubio was the Tea Party supported candidate against Charlie Crist. Rubio stood out yesterday.

As Michael Patrick Leahy writes:

The good news is that tea party activists around the country are currently engaged in this quiet but important mission of building an electorally competitive infrastructure. The better news is that the Washington Post will continue to miss this development.

The mainstream media has resolved to periodically churn out even more â€œtea party is deadâ€ stories in 2013. Tea party activists, in contrast, have resolved to use 2013 to build the infrastructure for political success in 2014 and 2016. Weâ€™ll see which obituaries will be written after those two very important elections.

We need to continue to vote them out, to challenge them in primaries. Because weâ€™re alone again, naturally.
Faculty Blogs

Ahso! · Post by **Ahso!** » Wed Jan 02, 2013 9:52 am

I wonder what Jacobson advocated before the election about the republican leadership. Or is he Monday morning quarterbacking?