Repeal the "fiscal cliff"

[cos]

[I also posted this on Blue Mass Group]

We hear a lot about Congress and Obama working to find some elusive deal that could stave off the "fiscal cliff", and occasionally we also hear about why we should to avoid it: According to the Congressional Budget Office, allowing the "cliff" to happen is likely to send the economy back into recession in 2013, and sharply increase unemployment.

What we don't hear much about is that Congress can simply repeal the fiscal cliff, without any complicated deals.

"Sequestration" - the automatic spending cuts that start to take effect in January - is just a law passed by Congress in 2011. Congress can repeal it, and that alone would be enough to prevent a recession in 2013 according to the CBO report - even if all the Bush tax cuts expire.

Extending the payroll tax cut and unemployment benefits would double the impact. Extending the Bush tax cuts on income below $250,000 would do even more (In contrast, extending the Bush tax cuts on higher income would, according to the CBO, have very little impact). But even if we did neither of those sensible things, just repealing sequestration would be much better than doing nothing. Neither Congressional Democrats nor Republicans actually like sequestration or want it to happen. So why do we hear so little in the news about that option?

I started a petition on change.org: Congress: Repeal the "fiscal cliff".
Please sign, re-post it, and send it on to others.

Comments

[auros]

Krugman puts it more concisely than either of us:

This is not a negotiation in the normal sense, in which each side makes proposals and they dicker over the details; instead, Republicans are demanding that Obama read their minds and produce a proposal they’ll like. And Obama won’t do that, for good reason: he knows that they’ll just pronounce themselves unsatisfied with whatever he comes up with, and are indeed very likely to campaign in 2014 attacking him for whatever cuts take place.

Pushing the Republicans to make a deal now is foolhardy -- their base prefers intransigence over compromise as the default choice, and every time they get to reject something from Dems, that helps maintain the base's interest and support -- and yet, weirdly, if they did take an offer, that would actually improve their bargaining position after 1/1/13, so even if they did get pushed into taking a simple deal, that would be bad in the long run. Better to just shut up, go home for the holidays, and then make an offer that they can't refuse, because it's so obviously in line with their claimed values (tax cuts for the middle class!) that even low-information voters will notice it if they try to reject it.

[pseydtonne.livejournal.com]

Thank you for the link and the feedback!

I've concluded as well that, since the Democrats will get a 'no!' no matter what they (we) propose, let's propose crazier things:

"We want the tax rate for the rich back to LBJ-era levels, funding for maglev trains all over the place, a Federal database that alerts dog catchers to neighborhood folks looking for a new dog, and a free sixer of Laguanitas IPA for every head of household that files taxes before March 15th."

"No! Dirty socialists."

"So, you hate puppies? You hate beer? Fascists."

[auros]

I'm going to assume you're being somewhat extreme for effect, but I think I agree with you in principle. I wouldn't want to propose something so extreme that it would actually look strange or wasteful to the median voter, but I absolutely would like to see the Dems making proposals that start them out at a position where they have more chips to bargain away. Like, propose authorizing up to $800B in stimulus through a new Works Progress Administration, to be spent over the next 5 years (which would on its economic merits be a clearly good thing -- we have crumbling infrastructure, and the capital, labor, and materials to fix it are available on the cheap). Acela for the west coast (not necessarily maglev, but something) would be a great item to include.

[pseydtonne.livejournal.com]

Precisely: we take their crappy tactics and get a compromise point that we like.

"We demand maglevs!"

"Uh, no."

"Then compromise -- fast trains from San Diego to San Francisco, with ads all over the place. Cushy chairs. Make it nicer than flying. Oh, and we'll sell the good fruit and jerky on the train."

"Well, yeah... cushy... and are we talkin' that peppered jerky from the guys that advertise with Sasquatch?"

"Yup. Sounds like a plan. Next topic: kitty! We have a video here..."