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House approves bill

Via NBC news

Updated at 6:58 a.m. ET: An agreement to stave off the harshest and most immediate consequences of the fiscal cliff won approval in the House late Tuesday. President Barack Obama said he would sign the law, the battle over which foreshadowed more fights with Congress over spending.

Who foots the "grand deal (no capitalization on purpose)" costs.

by run75411

Who foots the “grand deal (no capitalization on purpose)” costs.


Everything You Need to Know about the Fiscal Cliff Deal “Wonkblog” Zachary Goldfarb

This was the model to describe what would happen if the Grand Deal increase in taxes fell upon those Household Taxpayers making greater than $200,000 (individual) and $250,000 (family) (Tax Policy Center) . Slight error in the chart also, the 20-60% should be 20-40% of Household Taxpayers. The impact should be similar.

The Bill Itself: ‘‘American Taxpayer Relief Act of 2012’’ I have not had time to go through this bill with a fine tooth comb yet. Amazing how they can write 157 pages of strike this and insert this in a matter of days. While it does not look that alarming, Obama has again displayed his feet are made of sand which wash away with the tides of adversity. An abbreviated cheat sheet can be found here: “Your fiscal cliff deal cheat sheet” Wonkblog Suzy Khimm

The big winner of the day? Milk subsidies will continue.

Social Security and the current fad of being balanced and comprehensive

Salon writer  Natasha Lennard reports that a sticking point around Social Security stalled ‘fiscal cliff’ back and forth rejoinders between the two parties, but also points out that the topic continues to be on the table (and has been offered by President Obama before these talks a couple years ago).   Notice both parties using the same language of “part of a balanced, comprehensive agreement” as the fix is in without looking at other parts of the budget…these back and forth sallies are bi-partisan in appearance, but do not address the current version of ‘fical cliff’ responsibilities.

A free gift to the political players and the cover of the moment, a matter not even related to current fiscal responsibility, nor to the real world impact it has on poverty and seniors, nor the carefully thought out and responsible plans offered to address real issues.

In what Democratic aides told reporters was a “major setback” in fiscal cliff negotiations, Republicans proposed throwing a Social Security cut into the scaled-back deal Congress is attempting to cobble together in advance of the New Year deadline. As things stand at the time of writing, negotiations are close to breakdown.

Aides to Republican Senate Minority Leader Mitch McConnell presented the Social Security proposal, which included a method of calculating benefits with inflation. The plan would lower cost of living increases for Social Security recipients. Democrats were swift to reject the offer.

A Democratic aide told ABC News that the proposal was a “poisoned pill” in the current negotiations. However, it should be noted that President Obama has suggested a similar proposal within the context of negotiations on a broad deficit-reduction deal. Such a measure had been taken off the table in discussions over a scaled-back, short-term agreement.

Senate Majority Leader Harry Reid said on the Senate floor Sunday, “We’re willing to make difficult concessions as part of a balanced, comprehensive agreement but we’ll not agree to cut social security benefits as part of a small or short-term agreement, especially if that agreement gives more handouts to the rich.”

How do I know this? Well, it is worth the time to follow posts at Angry Bear over the next few months, and to compare the analysis to your own understandings. Bruce Webb will be writing with updated numbers, a must to understand the words others are using, and to gain further understanding of the big numbers used to argue political points of view.

The Republican Congressional Delegation’s Oddly Faulty Memory of 2004 — UPDATED

House Republicans argue that voters handed their members a mandate as well, granting the party control of the House for another two years and with it the right to stick to their own views, even when they clash strongly with the president’s.
And many Republicans remember well when the tables were turned. After Mr. Bush’s re-election in 2004, Democrats eagerly thwarted his push for privatization of Social Security, hobbling Mr. Bush’s domestic agenda in the first year of his second term.

Events Recall a More Bipartisan Era, and Highlight Gridlock of Today, Michael D. Shear, New York Times, today.

Whoa.  Funny, but I too remember the weeks following the 2004 presidential election. Which immediately followed the 2004 presidential campaign.  Which I also remember; it wasn’t all that long ago.  

And I remember that during that campaign, Bush never mentioned his plan to privatize Social Security.  

Yes, that’s right.  Bush waited until immediately after the election to announce his intention to privatize Social Security–outraging not just Democrats but millions of Independents, some of whom had voted for him, and even some Republicans.  

The main focus of the 2004 presidential campaign was national security.  Privatization of Social Security was not an issue at all in 2004.  Not until after the campaign, that is, when Bush not only announced his plan but also then campaigned intensely for public support for it, to no avail.  The proposal quickly proved deeply unpopular.  And congressional Republicans began to run from it.  The Republicans, who controlled both houses of Congress, did not even put it up for a vote, in either house, if I recall correctly.

So if Republicans think they remember that the tables were turned–a metaphor that refers to actual similarity, or at least some semblance of it–they might consider seeing a neurologist.  Or maybe just reading news accounts from the period between Bush’s announcement of his proposal and the death of that proposal early in 2005.  They also can search for reports of any mention–any suggestion at all–by Bush during the campaign that he was planning to propose the privatization of Social Security.  I wish them luck.

As for their claim to a mandate because they retained control of the House, the speciousness of this assertion has already been documented and discussed in the mainstream media, largely because a Washington Post reporter (I wish I could recall his name, but I can’t) meticulously researched the campaign results, congressional district by congressional district, and then did something that modern Republicans don’t: math.  Republicans lost, albeit narrowly, the aggregate popular vote in House elections nationwide.  They retained control of the House only because of extreme gerrymandering last year in some states, most notably in Pennsylvania and Texas, but in other states as well.  

The word “mandate” in this context leaves room for debate about what percentage of victory in the popular vote constitutes one.  But a victory in the popular is a prerequisite to that debate.  The Republicans don’t have the prerequisite, nor do they claim to have it; they simply misuse the word “mandate”.  Like so many other words.  

But at least it’s not false for them to note that they did retain control of the House.  What is baldly false, though, is their characterization of late 2004 and early 2005 as tables turned.  Unless, of course, there’s such a thing as a retroactive mandate for a policy that wasn’t disclosed during a campaign and is announced as a surprise only afterward.  Immediately afterward.

Which, now that I think about it, probably is what happened in 2004.  no, the public isn’t clairvoyant.  But we did know during the campaign that a Republican president and a Republican-controlled Congress in the current era will always want to privatize Social Security, and will waste no time (literally, in that case) in trying to do that when they hold the White House and majorities in both congressional houses.  We just forgot that, to our near-detriment–a mistake that, I trust, we the public won’t make again, however much Republican candidates insist otherwise during the campaign.  Because the Dem candidates will remind the public, during the campaign, of what happened after the election of 2004.  And of the current congressional Republicans’ claim in that New York Times article that a clear election victory is not a mandate on issues that were at the express and constant heart of a national campaign, because, after all, the opposition party doesn’t recognize as a mandate a vital policy proposal made only after the election that retroactively turned out to be all about that vital policy issue after all.  I mean, who knew?  Well, the Republicans did.

And now we do too, and it will be a prominent factor in campaigns to come.  The sheer trickery;  the attempt, in 2004 and now, to utterly undermine the very concept of democracy.  The current congressional Republicans’ express equating, as Shear reports, of a policy issue clearly at the heart of a campaign with a policy not even mentioned during the campaign.  It’s of a piece with the Romney campaign’s modus operandi of incessant, outright misrepresentations of fact.  And also of a piece with state and federal Republican legislative and executive-branch officeholders’ policy of delegating to lobbying groups the actual writing of legislation, including during lame-duck periods, enacting policies never proposed and, in some instances, expressly rejected by the officeholders, pre-election.  (Think: Michigan, Dec. 2012.)

But there’s also a separate issue of the messenger’s’–Shear’s–curious acceptance of the false equivalence of Bush’s and Congress’s handling of the Social Security privatization issue in late 2004 and early 2005 and resolution of the tax and spending issues of the fiscal cliff.  Shear mentions that Obama’s current approval rating in this week’s polls is his highest since shortly after bin Laden was killed.  He doesn’t mention that Obama’s approval rating has been above 50% throughout the post-election period, including the period before the Newtown shooting rampage, when the cliff talks were the news story, daily.  And that Bush’s approval rating plummeted once he announced his Social Security privatization plan.  And that the juxtaposition of the drop in Bush’s approval rating and that announce was not coincidence; the polling on that issue was awful for him.

We all are, by now, used to the news media’s acquiescence in the Republicans’ false-equivalency game. This Times article, by a reporter whose reporting is normally of high quality, makes me wonder whether there’s just is no limit to even the reporter-as-mindless-stenographer-for-fear-of-appearing-to-be-anti-Republican mindset at even the very highest level of the mainstream media.*

*This sentence had a large cut-and-paste error in it, and has now been corrected.


UPDATE:  Well … in the comments to this post, reader CasualObserver wrote:

Watch at the 5 min mark you will find that the faulty memory is all yours.

To which AB regular contributor Bruce Webb responded:

Well I don’t relish being the skeleton at the feast here, but Bush made his intentions on SS crystal clear when he set up his CSSS (Commission to Strengthen Social Security) in 2001 with six specific guidelines. one of whic categorically ruled out Payroll tax solutions of the sort Dale and us put forth as the ‘NW Plan’ and another nandated that private accounts had to be part of the package.

CSSS rolled out its recommendations right on time, unfortunately for Bush that time was right after 9/11. Absent that, which the Bush Administration was not expecting at all, we could have expected some analogue of the 2005 Social Security Tour being rolled out in 2002. The Bush Administration apparently took the intention for the deed and after fighting out the mid-terms and the 2004 presidential elections almost solely on national security somehow got the idea that yhe time was ripe to push the ‘Bi-Partisan’ Model 2 CSSS Plan, though at first with the flimsy vover of the near identical Posen Plan. because Posen, like a full half of the CSSS was a Democrat.

Anyway by Nov 26th 2004 Bush could plausibly claim that his plans for Social Security were fully spelled out after a ‘bi-partisan’ process for the last three years and so were at least implicitly on the table during the 2004 campaign. perhaps counting on the fact that no one was paying attention. and he almost won that bet, the fond belief by Dem leaders that they shot down Model 2 is not supported by the chronology instead the SS Tour was stopped in its tracks by the blogger led ‘There is No Crisis’ movement (in which I had an informal role but which was led by Dave Johnson and some others).

So no there was little to no talk of Social Security privatization on the hustings, and unless you were predisposed to be a SS geek that “I have got capital” move would indeed come out of thin air. Me I set up a new Social Security blog within 48 hours ( and started lobbing SS Report tables at figures with abandon. Because for my sins I was already seven years into this SS thing. And as such knew what Bush was about.

For which I am deeply grateful, Bruce, since after I read CasualObserver’s comment and did watch the video clip–which shows presidential-debate moderator Bob Schieffer asking Bush about his proposal to allow people to use part of their Social Security taxes to invest in the stock market rather than have the money go to the U.S. Treasury–I was dismayed.  How could I, who was downright obsessed with the 2004 presidential campaign and its outcome, not recall that Bush had campaigned in 2004 on his plan, announced years earlier, to partially privatize Social Security?

The answer, it turns out, is that Bush didn’t campaign on that plan during the 2004 campaign.  Schieffer was asking him about what had transpired before 9/11, and his commission’s recommendations, released in 2002.  To his credit, Bush, unlike a certain Republican presidential candidate in 2012, didn’t deny that he had done and said what Schieffer said he had.  Nor did he flip-flop.  He answered, straightforwardly, that this was his intention, and made a brief argument for the policy.

But Bush himself did not raise the issue during the campaign, and certainly did not campaign on the issue; that answer to Schieffer’s question probably is the only time he mentioned it during that campaign, unless maybe some other reporter asked him about it at some other point.  And Republicans had held control of both houses of Congress throughout Bush’s term, yet neither Bush nor the congressional Republicans had attempted to enact this into law.  That, of course, is because it was a very unpopular proposal.  

So CasualObserver is right, and I was wrong, that Bush made clear at some point during the campaign that he wanted to propose a plan to partially privatize Social Security.  But CasualObserver is wrong in suggesting that Bush campaigned on this.  He did not; he said, once or perhaps twice, in answer to a question, that he planned to do this.  But there was little expectation that such a proposal, if actually presented as a bill in Congress, would go very far.  And it did not go very far, not, as the current Republican congressional delegation claims, because the Senate Dems threatened a filibuster, or whatever, but because the polls were consistently showing–to Republican members of Congress as well as to Dem ones–that there was strong, broad-based opposition to it among the public.  So strong, in fact, that Bush’s 2005 attempt to have this policy enacted played a role in the unexpected change of both houses of Congress to Dem control in the 2006 election.  This, even though there weren’t enough Republican members in either house in 2005 to push this through.

The 2004 election was almost entirely about national security–at a time when, polls showed, about half the public still believed that Saddam Hussein was behind 9/11, and many still thought he had had weapons of mass destruction.  Virtually no one, Republican or Democrat, viewed the central issue in the campaign as anything else.

Suffice it to say that it is delusional–or maybe just a desperate political gimmick–for the current Repub crowd to claim an equivalence, in any substantive respect at all, between the 2005 Social Security privatization issue and the fiscal-policy controversies at issue in the current situation.

Including, not incidentally, that the Social Security privatization issue didn’t threaten to bring down the economy in 2005.

Bruce Bartlett and Yves Smith on Overhyping the Fiscal Cliff

This video featuring Bruce Bartlett and Yves Smith on Overhyping the Fiscal Cliff is worth watching.

Independent political and economic analysts Bruce Bartlett and Yves Smith join Bill in a discussion that’s become as rare as it is necessary — why are Washington insiders talking about the deficit crisis and not the jobs crisis? Bartlett, former advisor to Presidents Ronald Reagan and George H. W. Bush, got into hot water with fellow conservatives when he aired concerns about the direction of their ideology and wrote critically of the second George Bush. His most recent book is The Benefit and The Burden: Tax Reform — Why We Need It, and What It Will Take. Yves Smith, who spent more than 25 years in the financial services industry, is the founder and editor of the popular blog Naked Capitalism, and runs a successful management consulting firm. Published on Dec 14, 2012

David Warsh on Warren Buffet’s NYT op ed

David Warsh, a journalistist covering economics issues, takes a look at Warren Buffet’s op ed at Economic Principals.

The fiscal cliff negotiation is no better than a skirmish in what promises to be an epic ten-year struggle to achieve a new fiscal compact. For evidence of that, consider Warren Buffett’s entry into the debate last week, with a suggestion that negotiators seek to bring in revenues at 18.5 percent and cap spending at about 21 percent of GDP.

Those were levels that had been sustained over long periods of time in the past, Buffett wrote in an op-ed column in The New York Times; they could be reached again relatively quickly.
(Revenues were 15.5 percent of GDP in the fiscal year just ended, while spending was 22.4 percent.) His targets wouldn’t reduce the deficit, he wrote, but they would maintain a stable ratio of debt to output.

It was the right argument, but Buffett had the wrong numbers. He apparently borrowed them from the National Commission on Fiscal Responsibility and Reform, led by Erskine Bowes and Alan Simpson, now more than two years old…

Republican "fiscal cliff" proposal

by Linda Beale

Republican “fiscal cliff” proposal

House republican leaders have sent a letter to President Obama with their “fiscal cliff” proposal, which the Republicans cast as a “fair middle ground” and a “balanced framework for averting the fiscal cliff.”  Id.  Republicans object that the administrative proposal has is unbalanced, because it has “four times as much tax revenue as spending cuts” (under a Republican claim that the Administration shouldn’t count already enacted spending cuts that were part of the Administration’s original proposal as part of the bargain).  And of course the Republicans don’t like the idea of any stimulus measures being included in the deal or the proposal to finally do away with our arcane and unnecessary debt ceiling mess, which invites games of chicken that have no point.  They claim that they are merely supporting the Bowles-Simpson plan, which of course they are not since they are refusing all tax rate increases.

The letter is written rather confusedly and is therefore somewhat ambiguous on exactly what it is offering as a concrete proposal.  One has to conclude that it isn’t a concrete proposal but actually merely puffery that restates the position that the GOP wants lots of entitlement cuts, no military cuts, and no tax rate increases (but might go along, maybe, with some unspecified “loophole eilmination” for the nonce).  It appears to propose the following:

  • $900 billion in cuts to mandatory spending including Medicare and Medicaid spending over the next decade 
    • The Republican letter, of course, tries to assume the mantle of “preserving and protecting” social welfare programs even while they reach out to reduce, eliminate or privatize them, when it suggests that perhaps the Republicans will return to the Budget Resolution that offered a voucher plan for limiting Medicare benefits (and hoped to buy off current seniors and those nearing retirement by promising them benefits under the current program). The Republican proposal referred to claims to “reform” Medicaid by offering “flexibility” that cuts $800 billion from the program over 10 years!  Although admitting that the election makes pursuing those kinds of harsh reforms “counterproductive”, the Republican leaders promise to “continue to support and advance them.”
  • $300 billion in cuts to other discretionary spending over the next decade
  • $200 billion in cuts to Social Security benefits (by revising the method of calculating cost of living increases, which would also apply to keep the tax brackets from rising as fast and for adjustments to government pensions)
  • $800 billion in new revenue–achieved through “pro-growth tax reform that closes special-interest loopholes and deductions while lowering rates” (but of course without mentioning just what loopholes and deductions would be removed).  The letter goes on to declare that the Republican leaders will not agree to higher tax rates, asserting that their position is to “protect small businesses and our economy”.

Let’s assess this so-called “proposal.”

Lowering rates is absurdity at this point:  no reasonable person should vote for a proposal to lower US tax rates even more than they already are.  Lowering rates while eliminating deductions or loopholes doesn’t work any better:  immediately after such a bill is passed, the lobbyists will be back on the floor.  First they’ll demand a temporary extension while markets “adjust” (mostly bulls..t).  Then they’ll demand that the temporary provision be made permanent to provide “certainty” to markets and businesses.  Then they’ll demand enhancement of the loophole to broaden it, since they say such provisions will incentivize job creation. Etc.  This is an old story that never plays out the way the lobbyists promise.  Congress shouldn’t fall for it again.  Because the next ploy will be–oh, let’s broaden the base by removing these new old loopholes and then we can lower rates even more.  The only thing that is likely to happen in this ploy is that the top rates go down for the wealthiest taxpayers, who pay less and less.

Cutting the various safety net programs is equally absurd.  Especially in a time of continuing difficulty, especially for vulnerable populations like the elderly, poor, laborers with inadequate pension and health care possibilities after retirement and other large groups in our population.  There is no reason to cave to the GOP’s forty-year campaign to reduce, privatize or eliminate social welfare programs:  let the gradual onset of taxes and sequesters take place in January, and then ask them to pass a tax cut to benefit those in the middle and lower-income groups.

The letter ends with an oxymoronic statement that essentially states that if the Obama administration will cave to these GOP demands, they are “ready and eager to begin discussions about how to stucture these reforms.”  They go on to suggest that President Obama has taken actions to “undermine good-fith effrorts to reach a reasonable and equitable agreement.”

That’s bunk, boys.  If the GOP is going to play this game this way, the administration should not attempt any kind of short-term resolution.  After the Bush tax cuts are repealed once and for all by operation of existing law as of January 1, it will be much easier to discuss what reasonable tax cuts should be enacted to protect the middle class rather than the wealth of corporate managers and owners.  And once there is a first start on the reduction of the military budget, we can move on to reduce it even more.  Action can be taken to stave off problems that would be caused by any of the provisions in early 2013.

cross posted with ataxingmatter

There are no "per se" tax or spending caps: lame duck negotiations no place for Medicare/Medicaid cuts

 by Linda Beale

There are no “per se” tax or spending caps: lame duck negotiations no place for Medicare/Medicaid cuts

When George W. Bush got reelected with a minority of the popular vote and contested state counts, the GOP claimed a mandate to keep going with the fiscally irresponsible program of high military spending combined with tax cuts particularly advantageous for their wealthy and corporate-owning supporters.
When Barack Obama got reelected with a clear majority of the popular vote and a resounding majority in the electoral college, the GOP says Obama has no mandate because the GOP managed to retain the House though Democrats in the House got more votes than Republicans in the House.
Anybody notice the partisan inconsistency there?

What we do know is that a majority of Americans–even lots of those Republicans who voted for Romney–want this Congress to preserve Medicaid and Medicare.  There is a huge effort by some–like the Peterson Institute, the Simpson-Bowles comedy tour, and right-wing propaganda tanks–to cast Medicare as impossible to sustain because of the current trend in health care costs.  The argument goes this way:

  • health care costs in the US are rising
  • the population that is eligible for Medicare in the using is rising as baby boomers age
  • Medicare costs will therefore inevitably increase
  • even though Medicare costs are rising less rapidly than non-Medicare health care costs (because of the ability of the government to mandate certain cost controls), those increases will eventually require significantly higher government outlays
  • the US has unprecedented levels of debt and annual budget deficits
  • the US spends too much compared to its tax revenues (the tax take is several percentage points less of the GDP than the spending percentage)
  • therefore the US can’t afford to pay those increasing amounts for Medicare health care costs
  • therefore we should cut back on eligibilty for, and benefits from, Medicare.

But this argument has several fatal flaws that include the following:

  • debt is extraordinarily cheap right now
    • if you can borrow at very low rates, it is better to borrow now than later
    • if you can borrow at very low rates and there are important projects on which to spend the money, the borrowed money acts as a stimulant to the economy
    • if the economy is stimulated by the borrowed money, the GDP growth will likely support continued low interest rates and faster revenue growth that will repay the debt faster
  • deficit spending by the government is vital when there isn’t private spending
    • and if the economy grows, private spending will grow and deficit spending can pull back
  • spending priorities have to be determined: 
    • there is no per se rule that higher spending is necessarily bad (though the right-wing in this country presupposes that there is and based almost all policy prescriptions on that presupposition, because the right-wing ideologically wants to divert public spending to its private pocketbooks)
    • there is no arbitrary and fixed percentage of GDP that is the “right” amount to be spent by the government on government programs
    • we spend too little now on public infrastructure ( public transporation, national roadways, electrical grids, and sewage systems are badly deteriorated), basic research (we have cut back on funding for NIH and NSF, major drivers of advancements in scientific and medical knowledge), and major priorities like combatting global warming/ supporting renewable energy
    • we spend too much now on the military (the military-industrial complex constitutes about 60% of the federal government)
    • we should support continued spending on Medicaid and Medicare, because those programs fill a vital need and serve the population well–we should not reduce benefits but rather increase them, at least for those who rely on Medicare/Medicaid as their primary or only health care plan
  • We’ve already built in various cuts to the spending for Medicare and Medicaid (possibly too much) and the question of what the costs will be ten years down the road depend in part on what else we do along those lines and how those things work out. See Editorial, Health Care Entitlements, New York Times (Nov. 29, 2012); Yves Smith, Naked Capitalism.
  • tax policy should be based on fairness in the way we raise revenues and spending priroities in the amount of revenues we raise
  • An equation that says “X (health care costs) is increasing and Y (Medicare coverage of health care costs) is increasing (because the number of people needing the program that pays for health care costs is increasing) and Z (taxes for coverage of health care costs) is increasing” and then concludes “therefore we must reduce Y” is using false logic: 
    • to maintain a relative constant, there are more options than “reduce Y” since the country could:
      • reduce X (move to single payer, as every other advanced nation has done, and halve the cost of health care)
      • increase Z (increase the tax support for Medicare, because it is a high priority that a majority of the citizens of our democracy support)

What we have to do is get away from the kind of thinking that seems to permeate so much of the discussion in Congress and in the media–that there are pre-set limits to how much we should borrow, how much we should spend, or how much we should raise in tax revenues.

The deficit hawks want us to think that the countnry will be just another Greece if we don’t rein in spending and debt and keep taxes low.  Traditionally our spending has ranged around 21% of GDP, but there is nothing magical about that number–it could rise to 24% or 26% without harm.  And we are not Greece, because we remain a powerful economy, one that can print our own money and one that commands interest from the global economy, so our debt (mostly caused by the Bush tax cuts combined with the Bush wars, and the Reaganomics deregulatory mania) is not an unbearable yoke around our necks.  We should be discussing the real needs of the country for infrastructure and provision of public goods and then figuring out how to pay for them with a combination of taxes and debt.

cross posted with ataxingmatter

The Media’s Role in Driving the "Fiscal Cliff" Imagery

by Linda Beale

The Media’s Role in Driving the “Fiscal Cliff” Imagery

The mainstream media has been fed a steady diet of releases from interested parties (like right-leaning propaganda tanks) about the need to adopt austerity measures, often cast as needing to save the country from out-of-control spending and unprecedented deficits and debt.

At the same time, the mainstream media has generally given up investigative journalism to engage in sports-like “he said-she said” journalism:  it treats most fiscal issues as a contest between left-leaning and right-leaning groups to be described by each side’s post position–i.e., as a merit-based race between equally valid positions.  Without the investigative wherewithal for in-depth research, there’s much less information about whether and how the facts may support one side and not the other.

We see it on climate change, where a scientific consensus is treated as just another opinion contrasted with the wishful opinions of anti-environmental corporatists.  We see it on evolution, where belief-based creationism is taught in schools alongside fact-supported scientific theory, with the two sides reported in the news as though they represent equally valid educational positions.  

It shouldn’t be surprising, therefore, that this approach surfaces in spades when it comes to the so-called “fiscal cliff”.

One is hard pressed to find articles that give credence to the position of progressives on Social Security (it is not bankrupt), Medicare (we can solve the long-term problem of financing of reasonable universal health care without cutting benefits by learning from the facts and experiences about controlling medical care costs through single-payer systems like those adopted in every other advanced nation), or even taxes.  The possibility of using the end-of-year changes as a fresh-start, “sweep the house clean” foundation for immediate action early in the new term is often ignored and, if mentioned, is generally given short shrift and inadequate explanation.

It’s easy, though, to find forecasts of return to recession outcomes if the sequester and end of the Bush tax cuts are allowed to take place as currently enacted.
Take, for example, the rhetoric of Mark Johnson in a report, A Fiscal Cliff primer (Nov. 18, 2012, updated Nov. 19).
If Congress cannot come up with an agreement on the Simpson-Bowles ratification, and then cannot come up [with] enough compromises to pass a plan of their own, and the President refuses to extend the current January 1st deadline, it’s over the cliff for Uncle Sam.
And, straight into the tax increases, unemployment jump, deep federal cuts and probable recession; A rough landing for the country and a scenario neither side wants.

The article adds to the crisis drumroll by quoting political scientist David Adler.

“And all the progress that Idaho families made in getting out of the recession will have gone by the wayside if in fact America’s politicians in Washington are not able to put our fiscal house in order.” Id.

In a similar vein, Jonathan Weisman in the New York Times reports today that “negotiators” have agreed on the parameters for a deal in which they will agree on fixed amounts of revenue to be raised (without tax rates increasing) and fixed amounts of cuts to social programs (and other federal programs like farm subsidies).  Jonathan Weisman, Seeking Ways to Raise Taxes but Leave Tax Rate as is: Negotiators Float Ideas to Appease Both Parties, New York Times (Nov. 23, 2012), at A12.

The article contains a good bit of information (or speculation, it isn’t completely clear) about what “negotiators” are considering in order to “pacify” the Republicans without permitting tax rate increases.  There’s no specific source attribution other than to “”aides involved in the negotiations” and a “Republican aide involved in the current talks.”  Id.  Predictably, it also includes a description of the slated legislative changes as a “crisis” when the “‘fiscal cliff’ would squeeze hundreds of billions of dollars out of the fragile economy next year and, many economists say, send the country back into recession”.  Id.

There’s not a single hint that it may not really be a “cliff”.  That it merely cuts back INCREASES in military spending.  That the sequester, with its cuts to the military, leaves the government with more options for funding NEEDED stimulus spending.  That Congress has all the power it needs to undo any truly harmful components of the sequester.  That Congress can instead consider targeted cuts to lower-income taxpayers to prevent a renewal downward recession trend.  That Congress can instead target spending cuts (and spending) on stimulation of the economy.  That Congress, in other words, has it in its power to help lower-income taxpayers pay for needed consumption and thus to create tax cuts and controlled spending cuts to benefit the lower and lower-middle income classes whose consumption is most needed to drive economic growth.

A little better is Evan Soltas, A Gentler Slope for the ‘Fiscal Cliff’, (Nov. 19, 2012), in which he admits the siren-call of the term to journalists.

The vivid imagery and false urgency of the [fiscal cliff] term transformed budget arcana into a national Wile E. Coyote moment. The words lent themselves to media overexposure and political opportunism. Despite efforts by Chris Hayes, Ezra Klein and Suzy Khimm to rebrand it the “fiscal curb” or “austerity crisis” — either of which would be more consistent with reality — Bernanke’s original phrasing has held fast.  Id.
Soltas at least explores the benefit of avoiding drastic austerity measures and even considering an “alternate” path of increasing the tax take beyond the “historic” measures of 18-19% of GDP.  Remember, we are currently at all-time lows in the perecentage of GDP taken in federal taxes, due especially to the enormously preferential rates to the super-elite through taxation of capital gains, dividends and private equity compensation (that is, “carried interest”) at less than half the top rate on ordinary compensation.

A reasonable solution might be a combination of spending cuts and revenue increases which stabilizes both at 18 or 19 percent of gross domestic product. That would be in line with their 50-year historical average. Increases or decreases beyond this level demand larger arguments about the proper size and role of government.

Alternatively, one could contend that demographic shifts — namely, the growing elderly fraction of the population — or rising health care costs justify greater public resources without any moral claims about government’s proper size. There is merit to this argument, but it neglects the revenue side of the historical consensus on the taxes paid to the federal government.
The relevance of any “historical consensus” on the percent of GDP that should be paid to the federal government, however, is questionable.  The times are extraordinarily different, with the years of low tax intake from the Reagan tax cuts through the Bush tax cuts, coupled with the unprecedented problem of the Bush preemptive wars being fought without the historical use of wartime increases in tax cuts (especially on the rich) to pay for them.
Maybe one of the better articles is a pre-election discussion at on the “Fiscal Cliffhanger“, Sept. 26, 2012.  Here at least there is a good graphic demonstrating just how significant the Bush-era tax cuts are in our deficit problem ($221 billion) and how little the cut to support for Medicare payments to providers is ($11 billion).  Perhaps this kind of graphic can get the upper-middle class Americans to consider their fair-share obligation. (That means couples, like most professionals such as myself, who make more than $100,000 a year but less than the $250,000 or more a year that Obama has taken as his targeted income level for reintroducting pre-Bush era taxes.)  Further, the article acknowledges that gridlock in the lame duck is quite possible, but goes on to note that there will likely be a resolution–with compromise on both sides–early in 2013.
Many progressives–in which group I include myself– do think that a clean sweep start to the new session could allow Congress to act more reasonably on our long-term fiscal needs without compromising measures needed to continue moving us out of the Bush recession. 
Once the Bush tax cuts are gone and the sequester starting to take effect, Congress could  enact piecemeal legislation.  It could pass new, better targeted tax cuts for the lower-middle and lower income distribution.  Hopefully Obama, now in office and not needing to protect his electoral future, will recognize the reasonableness of allowing some tax increases to take place in four-or five- years for those couples in the $100,000 to $250,000 taxable income set. 
Once the sequester is starting to roll in, Congress could move to reinstate public pension support.  It could consider long-term support for Medicare through gradual adoption of a single-payer, Medicare-for-all system that meets the real needs of the future rather than using an artificially created fiscal crisis to destroy the New Deal programs.  It could accept the sequester’s limited spending increases for the military.  It could even finally act to reduce the tax-and-spending subsidies for Big Banks (get rid of the active financing exception to Subpart F), Big Pharmacy and Big IT (legislate new international tax rules that undo the tax evasion that current  “affiliated sales” of intellectual property permits while reining in the ability of MNEs to locate their profits in offshore tax havens with sophisticated tax planning like the “Dutch sandwich” techniques), and Big Oil and Big Agribusiness (outright subsidies built into well-lobbied tax and spending provisions).