The Fiscal Cliff Approacheth

[Direckshun]

In an effort to make this thread sticky-worthy, I am going to update this OP to keep casual glancers informed.

This post is the official one-stop shopping of the key points/developments of the fiscal cliff negotiations.

Far as I understand, the fiscal cliff:

1. Gets rid of the Bush tax cuts for the wealthy.
2. Gets rid of the Bush tax cuts for everybody else.
3. Slashes defense spending by something like $500 billion.
4. Slashes domestic programs like the NIH, Head Start, and medicine/drug care for the poor by $500 billion.

The new idea is for Democrats to allow the cliff to hit, then immediately introduce a bill that would bring 2, 4, and some of 3 back. But not 1.

Here is a chart detailing exactly what the fiscal cliff is going to do, financially:

Spoiler!

Originally Posted by Direckshun

New CBO projection: if the fiscal cliff hits, we are in another recession, and lose two million jobs.

http://www.reuters.com/article/2012/...87L0JV20120822

The poor would be hurt by the fiscal cliff:

Originally Posted by Direckshun

Overall, if the tax breaks from the 2009 stimulus are allowed to expire—the EITC and Child Tax Credit expansions, along with American Opportunity Credit for college tuition—the poorest 20 percent of Americans would see their taxes go up by $209 on average, reducing their after-tax income by 1.9 percent, according to the Tax Policy Center.

As would the middle class:

Originally Posted by Direckshun

According to estimates by the Tax Policy Center, more than half of all married couples will owe an additional tax of around $4,000 unless Congress acts. And more than a third of families with children will fall subject to the AMT, with parents of three or more children facing an extra tax of $4,700.

Among married couples with at least two children and adjusted gross income between $75,000 and $100,000, the center estimates that 84 percent will face a significantly higher tax bill this year because of the AMT.

There seems to be some consensus between the parties that substantial revenues want to be raised. Boehner and the GOP hopes that's through limiting tax deductions rather than tax raises.

Obama's opening offer, essentially:

• Allow the Bush tax cuts on high earners to expire. $849 billion
• Limit itemized deductions to 28 percent, close some loopholes and deductions on high earners, eliminate tax breaks for oil and gas companies, eliminate the carried interest loophole, plus a few other items. $584 billion
• Create a special "Buffett Rule" tax rate for millionaires. $47 billion
• Restore the estate tax to 2009 levels. $143 billion
• Limit corporate income shifting to low-tax countries. $148 billion
• Other miscellaneous tax increases and reductions. About -$200 billion
• Total: $1.6 trillion

[patteeu]

Originally Posted by Direckshun

The recovery measures are nowhere near a majority of the deficit Obama inherited.

The deficit he inherited was mostly the Bush tax cuts, two wars on the credit card, and a complete bottoming-out of the economy before he ever stepped into office.

Recovery measures were part of it, but not a very big part.

Don't give me that. He had all the power he needed to repeal the Bush tax cuts, end the wars and do anything else he wanted to do, during his first year in office. Every dollar of the FY2010 deficit and beyond was his responsibility. The FY2009 deficit should be apportioned as I described in that post.

[patteeu]

Originally Posted by Direckshun

Because you posted about debt as if it was the deficit.

No I didn't. You understand that there's a relationship between debt and deficit, right? You should also understand that deficits can occur over any time period, not just a single year as we typically use the term. The deficit over the entire Obama term is roughly $6 trillion. That's also the amount added to the pre-existing debt.

[Direckshun]

Originally Posted by patteeu

Every dollar of the FY2010 deficit and beyond was his responsibility. The FY2009 deficit should be apportioned as I described in that post.

And it was, we spent more to get ourselves out of a recession.

Then we started slashing spending cuts once we rose out of it at unheardof rates in our lifetime.

[Direckshun]

Originally Posted by patteeu

The deficit over the entire Obama term is roughly $6 trillion.

Accumulated deficits have created additional debt of $6 trillion, is how you'd say it without sounding stupid.

[HonestChieffan]

Deficits are irrelevant. Lets rock this bitch down the road. Over the cliff and see how we bounce.

[petegz28]

Originally Posted by Direckshun

And it was, we spent more to get ourselves out of a recession.

Then we started slashing spending cuts once we rose out of it at unheardof rates in our lifetime.

We slashed spending cuts alright. Slashed them into non-existence.

If Obama were really slashing speding we wouldn't need to keep raising our debt levels and he wouldn't be asking for more money to spend.

[J Diddy]

Originally Posted by petegz28

We slashed spending cuts alright. Slashed them into non-existence.

If Obama were really slashing speding we wouldn't need to keep raising our debt levels and he wouldn't be asking for more money to spend.

Get ready. A big spending cut is coming and it's one you guys don't seem to want. Hmmm.

[patteeu]

Originally Posted by Direckshun

Accumulated deficits have created additional debt of $6 trillion, is how you'd say it without sounding stupid.

I said it without sounding stupid. I didn't want to make a big deal about it, but frankly, you questioning me about whether I understood the difference made it sound like you can't read.

[patteeu]

Originally Posted by Direckshun

And it was, we spent more to get ourselves out of a recession.

Then we started slashing spending cuts once we rose out of it at unheardof rates in our lifetime.

Obama doesn't really deserve much credit for TARP repayments or the scheduled end of temporary spending programs (including porkulus and war expenses, for example). It takes a special kind of shill to hold Obama up as a deficit hawk.

[J Diddy]

Originally Posted by patteeu

Obama doesn't really deserve much credit for TARP repayments or the scheduled end of temporary spending programs (including porkulus and war expenses, for example). It takes a special kind of shill to hold Obama up as a deficit hawk.

Would he get the blame if they weren't repaid?
Also I would disagree that he deserves no credit for ending temp. spending programs like war expenses.

Obviously he's not a deficit hawk but in the position that we were in I don't blame him for spending a lot of what he did.

[patteeu]

Originally Posted by J Diddy

Would he get the blame if they weren't repaid?
Also I would disagree that he deserves no credit for ending temp. spending programs like war expenses.

As I pointed out earlier in the thread, Bush is routinely blamed for every penny of TARP even though he should only be blamed for the net cost of the program. So in answer to your first question, no. Whether Bush is blamed for the net cost (as he should be) or the upfront cost (as Obama spinmeisters tell us he should), there's no blame left to give Obama.

Obama gets all of the President's share of credit/blame for the level of deficits run on his watch, including the impact of allowing temporary spending to end as scheduled. He doesn't deserve any special deficit-hawk credit for ending them, as if he changed the course of history with his financially-responsible budget ax though.

Originally Posted by J Diddy

Obviously he's not a deficit hawk but in the position that we were in I don't blame him for spending a lot of what he did.

Yes, obviously. Thank you.

[HonestChieffan]

Originally Posted by J Diddy

Get ready. A big spending cut is coming and it's one you guys don't seem to want. Hmmm.

Im all for it. What is the risk of letting it go? Fiscal cliff, here we come.

[J Diddy]

Originally Posted by HonestChieffan

Im all for it. What is the risk of letting it go? Fiscal cliff, here we come.

That's kind of where I'm at as well. Some sacrifices have to be made and I get that, but I think in this situation there shouldn't be any sacred cows. That includes defense or Obamacare.

[Direckshun]

Originally Posted by petegz28

We slashed spending cuts alright. Slashed them into non-existence.

You're really, really stupid.

Question: how were we able to raise the debt limit in the summer of 2011?

[Direckshun]

Originally Posted by patteeu

I said it without sounding stupid.

That's up for debate.