Most people haven't come to grips with this yet. We're being led to our own slaughter and we're arguing about who should be the ones to serve us our last meal.
2016: NONE OF THE ABOVE
First, the President and Congressional leaders were naive to expect that, after they had so much difficulty finding a means to raise the debt ceiling during the summer, they could then wash their hands of the issue for much of the rest of the year with a solution magically developing weeks before the deadline. Once the debt ceiling was raised, the parties should have immediately engaged in negotiations to have a package in place well before December 31. No other issue commanded such priority. Political expedience and naivete produced exactly the kind of outcome that is currently in place.
Second, the negotiations should have been private with no comments by any side to the Press nor information provided to anyone not involved in the talks. Sensitive negotiations need to remain closed to all non-participants because there are too many opportunities to blow up the talks. Only once an agreement were reached in principle (and ideally initialed by the President, House Speaker, House Minority Leader, Senate Majority Leader, and Senate Minority Leader) should the terms of that deal have been presented to the full House and Senate. At that time, the Congressional leaders should have made a unified effort to produce a successful vote.
Instead, the relatively open process led to posturing (as no individual wants to appear weak) and gimmickry before the House and Senate where each side tried to evade responsibility for the absence of a deal. All of those actions poisoned the atmosphere for productive negotiations.
Far more than any one individual's being responsible, this outcome--and a "punt" on the big issues would be little different--is a collective failure of American leadership. It is yet another illustration of the kind of dysfunction that S&P cited in downgrading the nation's credit rating to AA+. A "punt" to avoid the worst of the fiscal cliff impact could provide another illustration that the nation's leaders are incapable of addressing the nation's biggest challenges. After all, if they couldn't resolve the fiscal cliff with a six-month window of opportunity, why should one have much confidence that another six- or even twelve-month window would produce a much better outcome?
It's amusing to see people simultaneously say "we can't go over this cliff" and "we have to get the deficit under control!"
It's spending cuts and revenue increases. Do you want to do this or not?
One of you will end up here next!
Going over the cliff will not bring ruin to the world. The best option is a real deal that does something effective. Absent that, the cliff is the next best option.
AUSTAN GOOLSBEE: I think the world vests too much power, certainly in the president, probably in Washington in general for its influence on the economy, because most all of the economy has nothing to do with the government.
I read an article earlier that said as of January 1st, individuals making over 200k (250k for couples) are going to see a 3.8% tax increase on investment income, in addition to a 0.9% increase in payroll taxes. The former goes into the government's general fund, the latter into the Medicare fund....all a part of the ACA.
In addition to that, Obama's proposal asks for (I think) a 4% increase on the top income tax bracket. Boehner has already conceded, in part, on taxes for the "rich". Where are the spending concessions? Last I heard, the house-passed bill and the senate-passed bill are several hundred billion apart on spending. I didn't realize compromise was a one-way street these days. Nor was I aware that the senate's most pressing issue is apparent disaster relief funding (this, after no budget in how many years? No contribution via proposals for the fiscal cliff? Nothing but finger pointing and ridiculous demands???).
I'm sick of it. People rail about a lack of bipartisanship, but who's putting Reid to task on the left? Everybody, the media included, is approaching this as if Boehner and Obama are the only two people with any responsibility to address this issue. That's bull****. The senate is more than capable of coming to the table with proposals and working with the house and the president to compare/contrast. Instead, they sit around like petulant children. Honestly? I'm not even pissed at Obama. At least he's doing SOMETHING, even if I disagree with his proposal. Nor am I pissed at Boehner. The house republicans and the entire senate, on the other hand? Give me a goddamned break.
"Hmmm...Can't decide if I want to watch "Four Houses" or give myself an Icy Hot pee hole enema..." - Blake Shelton
It is an amazing time. The party that is self-described as the Leadership Party is in complete disarray from internal revolution. The Leadership in the GOP is more worried about their re-election than the fiscal cliff. the Tea Party which couldn't deliver a strong conservative candidate for President, lost seats in both the Senate and House still holds a knife to the cojones of Boehner and McConnell.
Mitch saw his hand picked candidate for the Junior Senate seat in Kentucky lose to Paul Ryan, he has good reason to not go on the record compromising with the democrats over taxes. Boehner got trimmed pretty good when he met President Obama on the threshold for the Tax cut. His GOP house members couldn't give him the votes he needed to pass the 1 million dollar income threshold. That is not even close to the original 250,000 or the compromise 400,000 offered by the President.
It is going to take something very dramatic for the holdouts in the GOP to budge. Seems more like fanatic last ditch fatalism than prudent governance. The GOP hold-outs seem determined to go over the cliff than admit elections do have consequences and a majority think their stance is too far to the right.
I don't think most citizens will have a problem identifying the tea party as a problem, not a solution...