The Republicans are being criticized because the fiscal cliff legislation didn’t include spending cuts. As a lawyer for many years, I learned that to negotiate, you had to have a stick to shake at the other side. Without a stick you have nothing to fight with.
The Republicans didn’t have a stick. All of the Bush tax cuts were going to expire on Dec. 31. All they could do was maintain as much of those cuts as possible. President Barack Obama ran on maintaining the cuts for couples earning $250,000 or less. To their credit, the Republicans got that up to $450,000 for couples and that will be permanent.
Should the Republicans have said we won’t take any tax relief unless there are spending cuts? Not much of a fighting stick there. Obama would have said, “Fine. More tax money for me to spend. No cuts and you Republicans can explain why you threw the taxpayers under the bus.”
For those concerned about the lack of spending cuts, I say that notwithstanding all the posturing about cuts, Congress simply isn’t interested in that. The Budget Control Act of 2011 raised the debt limit by $900 billion and cut a measly $21 billion. The supercommittee created to cut $1.2 trillion couldn’t. The debt ceiling was raised and the $1.2 trillion of cuts was deferred until Jan. 1, 2013, so that wouldn’t be a distraction during the election.
The bottom line is that while the debt ceiling was raised twice since August, 2011, there have been no cuts except for the $21 billion. And the cuts scheduled to go in effect on Jan. 1 were — guess what — deferred for two months.
When the Budget Control Act was passed, I wrote to The Advocate and said it was a joke; that the cuts wouldn’t take place. Any cut passed by Congress can be restored by Congress.
Treasury Secretary Tim “Chicken Little” Geithner warned we would run out of money on New Year’s Eve. Expect more posturing about more spending cuts if the ceiling is to be raised. But don’t count on real cuts. Listen for the sound of a can being kicked farther down the road.
Move over Greece, we’re moving in!