Over the Proverbial Cliff
At the Wheel (guess who)
Here is what is pending if the House passes the Senate portion now at hand: lawmakers will face three more budget deadlines over the next three months. Get ready for the debt ceiling, the sequester part II and the continuing resolution. Read about the three more cliff-like deadlines over the next three months here from CNN Money.
1. Debt Ceiling: Congress has to raise the debt ceiling soon.
2. Sequester: The so-called sequester is a series of automatic cuts in federal spending that will reduce the budgets of most agencies and programs by 8% to 10%. (Those cuts are in place since Congress failed in their sworn duties last year as they passed the buck to the "super" committee - remember that).
3. Continuing Budget Resolution: The federal government works on a fiscal year that starts every Oct. 1. Problem is it has been years since it actually enacted a real budget on time.
The Senate bill, now pending in the House, contains these things listed here also from CNN Money.
The part I love, which Mr. Obama caved on, is the new definition of "rich" - kind of weakly explained here again also from CNN Money.
Reading this may make you sick, even as we start a new year ... pathetic, isn't it? So, what is rich in America from now on?
Couples making more than $450,000 - the new rich: That's a lot higher than the $250,000 threshold that policy makers had long marked as the dividing line between the middle class and the rich. Just under 2% of filers, or 2.85 million, have adjusted gross incomes above $250,000. By contrast, only 0.6% of joint filers, or 965,000 households, have incomes above $500,000, according to the closest estimate the Tax Policy Center has done to the fiscal cliff deal. Raising the bar cuts out about 28% of the income that would have been subject to higher tax rates, bringing in less revenue overall.
This is the part the GOP, drinking a ton of Kool Aid behind the wheel (let's hope it's not spiked with gin), will fight hard for: cutting "free stuff" and those darn entitlement programs that millions of us enjoy and have earned - a point the GOP seems to have forgotten. Stay tuned.
Previous Update Starts Here (December 20, 2012): Speaker Boehner cancels Plan B vote - calls for House to recess for Christmas. Boehner's Christmas dinner back in Ohio? COOKED GOOSE.
The GOP-mobile is in deep trouble, yet they won't admit it as the blame continues while they make this offer - no real offer at all:
Last week, Speaker Boehner (R-OH) in a letter to President Obama laid out the basic parameters of what his GOP caucus would be willing to accept — (1) pushing up the retirement age for Medicare, (2) reducing the growth of Social Security benefits, and (3) closing tax loopholes to raise a modest amount of revenue.
He might as well saved his letter and the paper and used it in the washroom ... that's about all it's worth (asswipe). Why? It sill allows the top to run the country or in so many cases, continue to ruin the country as they sit high on the proverbial hog.
What do we face - my read on this is:
The federal budget will shrink dramatically between 2012 and 2013 if the laws governing revenues and spending remain largely unchanged. With no action, that sharp reduction in the deficit would slow the economy dramatically, likely creating a mild recession in 2013. Even under that scenario the economy will not go over a cliff and immediately plunge into another Great Recession in the first week of January 2013.
What will likely happen?
1. Most households will begin to receive somewhat smaller paychecks due to higher income tax rates and the expiration of the payroll tax cut, but the impact on their cash flow would play out over the year rather than being concentrated in January.
2. A serious need for bipartisan support for extending most of the middle-income tax cuts through 2013.
3. A temporary expiration of the tax cuts on consumer spending is likely to be modest.
4. The likelihood that lawmakers will end up extending them retroactively to January 1, 2013 if they have not acted by New Year’s Day is slim.
The greater danger is that misguided fears about the economy going over a “fiscal cliff” into another Great Recession will lead policymakers to believe they have to take some action. No matter how ill conceived and damaging to long-term deficit reduction that action could be balanced that promotes fiscal stabilization is the solution and that includes tax hikes on the rich.
Along the way, Lest, We Forget 2008, Redux, Maybe???
1. Implosion of investment bank Lehman Brothers followed by massive borrowing from the Fed (and the public) followed by Goldman Sachs getting $600 billion; then Morgan Stanley, Bank of America, and Merrill Lynch: $2.6 trillion. Then it got worse.
2. Loose regulations coupled with little or no oversight of current regulations brought on the battle over how much CEOs would keep in bonuses, even as they got bailout money from the taxpayers. Then things went even further south.
3. Hedge funds(multi-millionaires) along with mutual fund managers, all lined up to get their cut of the handouts.
4. Investors borrowed $71 billion like from the California Public Employees Retirement System (largest in the country), and even the Major League Baseball Players Pension Plan took a hit.
5. On top of all that, the FED ended up giving some $7.7 trillion under the table more or less to the banks.
President Obama was reelected and his fiscal stance was clear. Many, if not most, of the GOP still has not gotten the memo, or if they got it, they can't figure it out. Thus, I offer this addendum: The country is watching and if there is any blame to go around once this mess is settled, I suggest you avoid any mirrors in the room.