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Originally Posted by Liz Iacobucci on the NH Labor News
Original post has many images unable to show here.

Less than 18 hours after Tuesday’s election results were in, House Speaker John Boehner started drawing lines in the sand.  He said Congressional Republicans would “negotiate” – as long as he got to dictate the terms of the compromise.

Those of us in the labor movement know this dynamic all too well.  We have tried to negotiate contracts with employers who draw lines in the sand.  They won’t increase wages; or they insist that employees pay more for health insurance; or they’re going to end job-security provisions, no matter what it takes.

But it’s not a “negotiation” if one side insists on setting the terms.  And what we’ve been hearing from Congressional Republicans the past week isn’t “negotiation.”

Right now, our country is facing what experts call “the fiscal cliff.”  On December 31st, tax rates are scheduled to rise automatically.  Then a series of automatic spending cuts will be triggered.  And not long after that, the federal government will hit the debt limit.

Economists agree: if these things happen as scheduled, America will fall off the fiscal cliff.  On Thursday, the non-partisan Congressional Budget Office reiterated that, if Congress does not act, the economy will be plunged back into recession; and unemployment rates are expected to soar.

It’s a political crisis like our nation has never seen before.  We are watching the clock tick down on an economic crash.  And the worst part about it is: the coming crash was intentionally designed by Congress

The “fiscal cliff” has its roots in two packages of tax cuts that Congress passed while George W. Bush was President.  At the time Congress passed the tax cuts, everybody knew the country couldn’t afford them.  That’s why they were passed as “temporary” provisions, rather than permanent changes.

The Bush-era tax cuts were originally scheduled to expire in 2010.  Why then? Through 2010, the Social Security system would be running an annual surplus – taking in more money in payroll taxes than it paid out in benefits – and the way Congress set things up, the only place “excess” Social Security revenues can be “invested” is in special US Treasury securities.   At this point, about 20% of our nation’s debt is owed to the Social Security Trust Fund.

When Congress passed the Bush-era tax cuts, it was clear that once 2010 rolled around, the Social Security system would have to stop loaning the federal government money.  Enough Baby Boomers would have retired that the Social Security Trust Fund would need to get its money back from the US Treasury.  And that’s why the tax cuts were scheduled to end two years ago.

Instead, when 2010 rolled around, our nation was mired in one of the worst economic downturns of our history.  Millions of Americans were unemployed; millions of families depended on emergency unemployment benefits.

How did you view the situation, two years ago?  As a crisis?  A time to pull together as a nation?  A time we should be feeding the hungry, as so many of our religions hold?  Senate Republicans saw the economic crisis as a political opportunity.  The Senate was debating a one-year extension of unemployment benefits when Republicans drew a line in the sand.  A minority of Senate members blocked the legislation; and they kept up their filibuster until tax cuts for the wealthy were extended for twice as long as the unemployment benefits.

Is it really a “compromise”, if one side gets almost all the pie?  In the end, when that Senate filibuster was finally over, that legislation cost $900 billion – and the extension of unemployment benefits was only 6% of the total cost.

Again, Congress knew the country couldn’t really afford it – that’s why the tax cuts were only extended for two years.  Just until after the 2012 election, when the Republicans would have an opportunity to take back the Oval Office.  And radically “reform” Social Security.  (Think about that: a Romney/Ryan administration would have “reformed” the single-largest “investor” in the national debt.  Got Social Security?  Aren’t you glad you voted last Tuesday?)

In that December 2010 “compromise” legislation, millions of American families got a financial lifeline; and the wealthy and the corporations got their tax cuts.  But almost all of the cost was put on the country’s credit card… and the result of that was predictable, too.  Five months later, the federal government hit the debt limit.

For decades, hitting the debt limit has been more ceremonial than meaningful.  It has been an opportunity to make speeches, a sort of “speed bump” reminding Congress that spending needs to be balanced by revenue.  For decades, every time the government came close to the debt limit, Congress raised the limit.

But not in the summer of 2011.  Again, Congressional Republicans saw the debt limit as a political opportunity.  Drawing a line in the sand over the debt limit gave them an opportunity to “negotiate”; and as one participant described  those negotiations, Republicans insisted that any deal would have to “protect taxpayer subsidies for big oil companies, tax breaks for corporate jets, and tax breaks for millionaires.”  In other words, Republicans viewed the debt limit as an opportunity to make the Bush-era tax cuts permanent – even though Congress has known from Day One that our country couldn’t afford them.

Any of this starting to feel familiar?  Starting to remind you of when corporate negotiators insist on cutting wages, even though the CEO just got a $2 million “performance bonus”?

When the debt limit dust finally settled, in August 2011, the end result was lose-lose.   The legislation raised the debt limit by $900 billion in the short term (which covered the cost of the December 2010 “compromise” over unemployment benefits).  It cut $1 trillion in federal spending.  And it required Congress to come up with another $1.2 trillion in debt reduction before the end of this year, either new revenues or specified spending cuts; otherwise, that $1.2 trillion would be automatically cut from the government budget.  In Congressional lingo, that’s called “sequestration”.  (Want to know what sequestration looks like?  You can read all the details here.)

Guess where Congressional Republicans drew their next line in the sand?  So far, there has been no “compromise” on that $1.2 trillion in additional debt reduction.

So piece by piece, tax cut by tax cut, Congressional Republicans have actually built this fiscal cliff we’re facing.  

But if they do a ”Thelma and Louise” thing and drive the nation’s economy off the cliff…  Well, maybe the 1% figure they'll survive just fine.  People living in gated communities, who keep extra money in offshore accounts;  people whose net worth has actually grown since the Bush recession; maybe folks like Karl Rove figure they'll survive just fine.  But another economic crash would destroy millions upon millions of families who work (or want to work) for a living.

Yes, Congressional Republicans built the fiscal cliff; and now they’re making their stand on it.  Since the election, Republican leaders have drawn line after line: no increased tax rates; protect the wealthy; no deal without “entitlement reform”.  (Hello, Social Security?)

They’re like the employer who comes to the table with obstacle after obstacle – because the company’s owners don’t really want to negotiate.  They've already decided to close the factory; they're just looking for someone else to take the blame.

"Let me put it very clearly," Senate Minority Leader Mitch McConnell told the Wall Street Journal last week. "I am not willing to raise taxes to turn off the sequester. Period."

Buckle your seatbelts.  Looks like it’s going to be a bumpy ride.

Thema and Louise Ending on youtube

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Comment Preferences

  •  Tip Jar (13+ / 0-)

    Together We Can Fight Back Against The Attacks On Labor In America

    by NH LABOR NEWS on Mon Nov 12, 2012 at 05:23:32 PM PST

  •  Obstructionism (5+ / 0-)

    Is the only philosophy they have.

    "Political ends as sad remains will die." - YES 'And You and I' ; -8.88, -9.54

    by US Blues on Mon Nov 12, 2012 at 05:34:29 PM PST

  •  I don't think the Republicans feel any pressure (6+ / 0-)

    to stop the rush over the fiscal cliff, so I think that is where we are headed.

    "let's talk about that"

    by VClib on Mon Nov 12, 2012 at 05:37:25 PM PST

    •  Republicans have become nihilists (5+ / 0-)

      At least a big contingent of their party have. And a lot of them want (or think they want) the government to fail big time.

      That said, I think we all need to stop exaggerating the urgency of the fiscal cliff. It's just plays into the hands of the shock doctrinaires who want to inflict massive austerity on the US. I recommend everyone to read Paul Krugman's column from Friday where he urges the President to hang tough in the negotiation and not be afraid to walk away without a deal. Here's the important point:

      It’s worth pointing out that the fiscal cliff isn’t really a cliff. It’s not like the debt-ceiling confrontation, where terrible things might well have happened right away if the deadline had been missed. This time, nothing very bad will happen to the economy if agreement isn’t reached until a few weeks or even a few months into 2013. So there’s time to bargain.

      More important, however, is the point that a stalemate would hurt Republican backers, corporate donors in particular, every bit as much as it hurt the rest of the country. As the risk of severe economic damage grew, Republicans would face intense pressure to cut a deal after all.

      "The smartest man in the room is not always right." -Richard Holbrooke

      by Demi Moaned on Mon Nov 12, 2012 at 06:14:14 PM PST

      [ Parent ]

  •  They can not negotiate... (4+ / 0-)

    They will be attacked if they negotiate.  A conservative who negotiates is a traitor to his ideas and to the people who voted for him.  They are simply in a little raft that will go over the fiscal cliff unless somebody else decides to save them.  They will do nothing.

  •  One of their political problems is that the twelve (5+ / 0-)

    million jobs coming in the next four to eight years, are still coming, as the economists said they would no matter who was elected.

    And even if Mitty tried and failed to take credit for those, the Rs do not in the worst way want O to be able to do so --  this is their silver lining to the slide off the fiscal whatever we are now calling it. If they can sink the economy over this, O's party and he cannot take credit for a plan which would actually have produced that many jobs. Can you imagine Rs running in 2016 after that many jobs had been created or were on the horizon, and not by them? After all they have said.

    Remember that the Roosevelt recovery slowed in 1937 when Rs made the same arguments these are, and turned around the Roosevelt recovery and brought it to a stop, with nothing but the coming war to replace it.

    •  Christy - it makes a big difference for 2016 (0+ / 0-)

      If the 12 million jobs come in four years or eight.

      "let's talk about that"

      by VClib on Mon Nov 12, 2012 at 08:04:28 PM PST

      [ Parent ]

      •  It depends on how the jobs fall into place. (0+ / 0-)

        If the ability to demonstrate where the rest are coming from is clearer than it is now and X million have already done so, not necessarily. The economists always used a slightly longer time frame than Mitt, but either way if that many jobs are arising, it is a highly meaningful matter. For the Rs, facing the prediction that the number would be achieved without their policies is not a good position to be in, no matter what happens. And if the X million are there by next election, what else can the Rs say?

  •  Mitch McConnell redux (1+ / 0-)
    Recommended by:

    When asked about the congressional agenda for the coming year Mr. McConnell replied, "Our top priority is to make sure Obama is just a two term president."
    On a slightly different note, I nominate Ann Coulter as prognosticator of the year. "If Gov. Cristie doesn't run we'll get Romney and we'll lose"

    the only thing we have to fear is fear itself--nameless, unreasoning, unjustified terror... FDR first inaugural address

    by blogokvetsch on Mon Nov 12, 2012 at 06:00:23 PM PST

  •  I'd like to propose an alternative. (1+ / 0-)
    Recommended by:

    The argument for the right on immigration has always been secure the borders then we'll negotiate. I propose that same plan for a bargain. The right has always said they could increase revenues without raising taxes. Okay, show us. If it's a viable plan we'll negotiate. can't say we'll do that later and still demand cuts now. You go first.

    "The human eye is a wonderful device. With a little effort, it can fail to see even the most glaring injustice." Richard K. Morgan

    by sceptical observer on Mon Nov 12, 2012 at 06:13:52 PM PST

  •  It's the only way to get the house back (2+ / 0-)
    Recommended by:
    chuck utzman, splashy

    The "fiscal cliff" doesn't exist.  The idea of a cliff supposes an action that can't be undone.  Here's a scenario worth considering:

    All the tax cuts expire

    The population sees a big increase in withholding in their paychecks

    There is a general realization that this is due to uncompromising Republicans

    Pressure becomes unbearable to pass a RETROACTIVE tax relief package for the 98%

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