Obama Will Take Us Over the Fiscal Cliff

 

Why do people think Obama wants to avoid going over the fiscal cliff? There is no real evidence that he does. He’s not negotiating, he’s out campaigning.

Geithner offered a deal to Republicans on Obama’s behalf that they can’t possibly accept. It’s summarized at the end of this article. The plan doesn’t cut any spending, it increases spending and includes a new stimulus.

We’ve been here before and Obama has never shown any signs of wanting to cut any spending. He only wants to increase taxes. He has never had a budget but he has run up trillion dollar plus deficits every year he has been in office. His “balanced” approach is unbalanced.

On July 13, 2011 House Speaker John Boehner, R-Ohio complained about President Obama and White House officials for their lack of resolve in negotiations. “Dealing with them the last couple months has been like dealing with Jell-o,” Boehner said. “Some days it’s firmer than others. Sometimes it’s like they’ve left it out over night.”

Boehner attempted to get Obama to talk about entitlement reform. “It was Jell-o; it was damn near liquid,” Boehner said.

“By Saturday, they’d spent the previous day and a half just going backwards” on reforming entitlement programs such as Social Security, Medicare and Medicaid.

“The only thing they’ve been firm on is these damn tax increases,” the Speaker said.

By August there was a deal to cut $1.2 trillion over ten years but where these cuts would be made had to be agreed upon by November 23rd or the cuts would be made automatically across the board.

This deal, known as sequestration, was a bad deal. Panetta and Obama administration officials have repeatedly said the looming ‘sequester’ defense cuts would “hollow out” our armed forces and devastate our national security.

The idea for sequester was President Obama’s. It was in exchange for raising the debt ceiling by $2.1 trillion. That information comes from Bob Woodward via Politico.

According to Politico, “The book ‘The Price of Politics,’ by Washington Post Associate Editor Bob Woodward, makes it clear the idea for the draconian spending cuts” which would jeopardize our national defense “originated in the White House – and not in Congress”:

“According to the book, excerpts of which were obtained by POLITICO ahead of the Sept. 11 release, President Barack Obama’s top deputies believed the prospect of massive defense cuts would compel Republicans to agree to a deficit-cutting grand bargain.

“Then-OMB Director Jack Lew, now the White House chief of staff, and White House Legislative Affairs Director Rob Nabors pitched the idea to Senate Majority Leader Harry Reid (D-Nev.), Woodward writes. Under the deal, which Republicans accepted after several rounds of bargaining, the federal debt ceiling was raised — staving off a potential financial crisis. …

“Administration officials ‘had finally decided to propose using language from the 1985 Gramm-Rudman-Hollings deficit reduction law as the model for the trigger,’ Woodward explains. ‘It would require a sequester with half the cuts from defense, and the other half from domestic programs….’”

During the second presidential debate, President Obama stated that sequestration won’t happen. Yet in an interview with the DesMoines Register, which he tried to keep from the public until after the election, he said this:

Transcript:

THE PRESIDENT: Well, Rick, let me answer you short term and long term. In the short term, the good news is that there’s going to be a forcing mechanism to deal with what is the central ideological argument in Washington right now, and that is: How much government do we have and how do we pay for it?

So when you combine the Bush tax cuts expiring, the sequester in place, the commitment of both myself and my opponent — at least Governor Romney claims that he wants to reduce the deficit — but we’re going to be in a position where I believe in the first six months we are going to solve that big piece of business.

It will probably be messy. It won’t be pleasant. But I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I’ve been offering to the Republicans for a very long time, which is $2.50 worth of cuts for every dollar in spending, and work to reduce the costs of our health care programs.

President Obama spoke about the expiration of the Bush tax cuts and sequester as if it was a given. It sounds like he doesn’t mind going over the cliff, at least temporarily, to get everything he wants.

President Obama could agree to delay the fiscal cliff  but he has shown no appetite for doing that. If the economy crashes, he can simply blame Republicans – that always works for some reason.

A number of Democrats have said they are willing to go over the cliff and they will not cut spending or entitlements.

Timothy Geithner came up with an insulting plan for Republicans to consider:

  • $1.6 trillion in revenues, including $960 billion from raising the top marginal rates on wealthy Americans as well as higher capital gains and dividends and an additional $600 billion from unspecified revenue sources.
  • An extension of the Social Security payroll tax break and unemployment insurance benefits.
  • One-year deferral of “sequestration,” the $1.2 trillion spending cuts over 10 years.
  • A multiyear stimulus package with at least $50 billion for the 2013 fiscal year.
  • A White House proposal to refinance underwater mortgages.
  • A return to 2008 estate taxes
  • A permanent increase in the debt limit that would change current law, which requires congressional approval.

Geithner said that the administration would consider spending cuts next year – it’s all so vague.
This plan is obviously not meant to be a serious plan that Republicans could even possibly consider.

John Boehner went from talking to jello to talking to an empty plate.

 

 

 

 

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