Friday, December 14, 2012

Fiscal Cliff Not a Debt Crisis But a Political Crisis

Based on a reading of today's paper I think it's clear that there will be no deal on the fiscal cliff.  Not only have the Republicans failed to identify the loopholes they will close in order to raise the $800 billion in revenue that Boehner has agreed to but they refuse to identify which spending cuts they want to make.  As put in an unsigned editorial in the New York Times:
None of these brave budget-cutters want to go on television and say, cut the F.B.I. Or cut the Border Patrol. Or cut the Centers for Disease Control and Prevention. But that’s exactly what they’re doing by insisting on slashing discretionary spending. Republicans are so afraid of this reality that they won’t even detail their demands for cuts to the White House in the fiscal-cliff talks, instead waiting for President Obama to go first so they won’t be stuck with the blame. 
Both Paul Krugman's column and the front page story by Jonathan Weisman and Jackie Calmes point to months of bitter "trench warfare" to come.  This from the Weisman and Calmes:
If no deal is reached, Republicans are increasingly talking about a more hostile outcome in which the House passes legislation that extends tax cuts for the middle class, sets relatively low tax rates on dividends, capital gains and inherited estates, and cancels the across-the-board defense cuts, but leaves in place across-the-board domestic cuts. Then House Republicans would engage in what Mr. Boehner, in a private meeting last week, called “trench warfare,” a running battle with the president on spending, first as the government approaches its statutory borrowing limit early next year, then in late March, when a stopgap government spending bill runs out. But such legislation might not be able to pass the Senate, leaving the country no closer to a resolution. 
Get ready for more brinkmanship and the resulting market somersaults, first when we run up againt the debt ceiling next month and then in March when the continuing resolution that keeps the government running expires.

In Krugman's column one finds a refreshing, unvarnished assessment.  The fiscal cliff is not a debt crisis it's a political crisis brought on by a political party that is at a dead end ideologically.
It’s a dangerous situation. The G.O.P. is lost and rudderless, bitter and angry, but it still controls the House and, therefore, retains the ability to do a lot of harm, as it lashes out in the death throes of the conservative dream.
And it's a party that still has enough juice to pass right-to-work legislation in a historically strong union state like Michigan; it's a party that is insulated by rigorous gerrymandering; and it is a party that, like the Marvel comics super villain Thanos, worships death.  Because what else can supporting the Pentagon at the expense of all other discretionary spending not to mention Medicare, Medicaid and Social Security mean?  It's best not to try to placate such a party, as Obama did in the summer 2011 debt ceiling negotiations.  Let's go off the cliff and meet the death worshippers head on.

No comments:

Post a Comment