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"Fiscal Cliff" Notes

Date: 
11/20/2012

As Congress approaches the so-called "fiscal cliff" we wanted to bring some sanity in to the discussion. Below is a terrific 5-point guide to the fiscal showdown from MoveOn that cuts through the political noise, but before beginning a policy discussion, it's important to remember that we just had a general election, and elections have consequences. In the voting booth, Iowans and Americans spoke loud and clear in favor of raising revenue and creating jobs:

  • Nearly two-thirds of the country (64%) supports raising taxes on income over $250,000 per year
  • 6 out of 10 voters nationwide believe taxes should be raised
  • The more important issue to voters is jobs, by an overwhelming margin

The good news is Congress has an opportunity to do the right thing before the end of the year, and the even better news is that it's what voters want them to do!

By ending the Bush Tax Cuts for the top 2%, and letting middle class taxes remain steady, we will strengthen the middle class and maintain their purchasing power, helping businesses stay strong as the economy continues to recover. At the same time, the revenue generated by asking the wealthiest among us to pay just a little bit more will help restore fiscal sanity and create greater confidence in the U.S. economy.

It's an important fight we need to win in Congress. Ending the tax cuts for the wealthiest 2% will restore sanity to our economy and make sure everyone is paying their fair share.

Join us today: take action to end the Bush Tax Cuts for the top 2%!

5-Point Guide To The Fiscal Showdown

1. The “Fiscal Cliff” Is A Myth. As Paul Krugman put it, “The looming prospect of spending cuts and tax increases isn’t a fiscal crisis. It is, instead, a political crisis brought on by the G.O.P.’s attempt to take the economy hostage.” Republicans are manufacturing this crisis to pressure Democrats to extend the Bush tax cuts for the wealthy and accept painful cuts to Social Security, Medicare, and Medicaid.

2. The Bush Tax Cuts Finally End December 31. If Congress does nothing, the ax will fall on all the Bush tax cuts on New Year’s Eve. Then, on January 1, the public pressure on John Boehner and House Republicans to extend the middle-class tax cuts (already passed by the Senate and waiting to be signed by President Obama) will become irresistible. So the middle-class tax cut will eventually get renewed, and we’ll have $823 billion more revenue from the top 2% to do great things with.

3. The Sequester. The sequester is another political creation, forced on Democrats by Republicans in exchange for lifting the debt ceiling last year to avoid crashing our economy. It’s a set of cuts (50% to a bloated military budget and 50% to important domestic programs) designed to make both Republicans and Democrats hate it so much that they’d never let it happen. And the cuts can be reversed weeks or months into 2013 without causing damage.

4. The Big Three. Nothing happens to Social Security, Medicare, and Medicaid benefits on January 1—unless Republicans force painful cuts to beneficiaries in exchange for tax increases on the wealthy, which are going to happen anyway if Congress does NOTHING. So, there’s literally no reason benefits cuts should be part of the discussion right now.

5. We Should Be Talking About Jobs. The real crisis Americans want Congress to fix is getting people back to work. And with just a fraction of that $823 billion from the wealthiest 2%, we could create jobs for more than 20,000 veterans and pay for the 300,000 teachers and 52,000 first responders, which our communities so desperately need. That’s not to mention jobs from investing in clean energy and our national infrastructure.

Background:

New York Times Topic: Bush-Era Tax Cuts

Washington Post: The sequester, explained

Paul Krugman: Hawks and Hypocrites

Slate: Boehner is Bluffing

5-Point Guide originally posted by MoveOn.org