Archived Story

We can scale the ‘fiscal cliff’

Published 8:51am Friday, December 7, 2012

This is the month of holidays and budgeting? Talk about odd couples and mismatched interests, what could be more at odds than Ho, Ho, Ho, and cutting grandma’s health care and retirement?

The fiscal cliff will be climbed and mastered before the fateful January tax hikes of multiple kinds, or, politics will effectively destroy or damage the economic recovery. You read it here first.

How might all the complex issues be resolved?

Maybe like this:

First, Obama and Boehner go for the really “big deal,” more likely than some might think because a small solution will not provide any economic security to stimulate growth in an economy that is 70 percent based upon consumer confidence.

So the big deal is the better path and grants a stronger economic picture for growth.

The deal will, and must, increase tax rates on the top 2 percent of earners incomes over $250,000. No one in Washington seriously believes otherwise, protestations non-withstanding. Most likely this top earnings income portion will return to the Clinton era 39.6% rate.

But Republicans, who feel their ox is being gored by any tax concession, will want something in exchange for this great (not so much, really) sacrifice that even the rich no longer object to in principle or fact.

The favorite Republican targets are Social Security, Medicaid and Medicare, and little could satisfy their desire for “balance” than some gutting of these two popular programs.

Truth is if the richest folks are to pay one cent more in taxes than grandma has to, in Republican thought, work longer, stay healthier and accept income cuts.

The targets are reducing Social Security increases in payments to retirees by tying them to a more conservative metric; raising the age of Medicare eligibility to 67; and reducing the funding for Medicaid.

Democrats might accept changing the inflation index to Social Security though they should not hurt seniors this way. Democrats will not concede raising the age for Medicare, for the exposure of seniors to high cost private insurance would be very damaging to those without financial security.

Reduced funding for Medicaid will probably happen, demanding the poorest of Americans pay for the money spent on, for, and by others far better off than themselves.

The temporary reduction in Social Security withholding will end, as it should.

The Alternative Minimum Tax will be booted forward with a temporary fix raising the applicable income minimum.

The sequestered cuts will be reduced as Republicans and Democrats join together to overfund our bloated military. The military budget, about 44% of total worldwide military spending, a federal budget category which has doubled in the last decade, will continue to grow.

Spending cuts will happen, but some will be done the Washington way, like counting the end of war costs as “cuts” in budgeting, and considering smaller budget increases as “savings”. Here Republicans can and should hold the feet of Democrats to the fire to insure real spending cuts are accomplished.

However, cutting programs that provide food or shelter to those that need them should never be on the table nor suggested.

What will not happen that should?

The Social Security contribution ceiling should be raised to $250,000, more than double the current level. This would fully fund the program for an additional 75 years.

Health care costs should finally be addressed aggressively, because they are breaking every budget solution proposed and show no sign of slowing their destructive increases.

The military budget should, over a decade, be cut by at least 25 percent. Won’t happen.

Infrastructure restoration should be funded as a national priority. Highly unlikely.

But under the tree this year, wrapped in something not-so-cheerful will be cuts in basic social contract programs. A gift from our Republican friends.


Jim Crawford is a retired educator and political enthusiast living here in the Tri-State.


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