OTHER VOICES
Around Congress, they’re calling it “The Cliff.” Or “The Trainwreck.” Between Election Day, Nov. 6, and New Year’s Eve, a lame-duck Congress and a president who could be a lame duck himself will face the following:
• The expiration of the 2001-03 Bush tax cuts.
• The expiration of tax breaks granted in the 2009 economic stimulus package.
• The expiration of “patches” to the Alternative Minimum Tax intended to keep upper-middle-income taxpayers from paying a tax aimed at higher-income taxpayers.
• The end of the payroll tax holiday extended earlier this year. Payroll taxes will go back to 6.2 percent from 4.2 percent.
• The end of extended unemployment benefits.
• The end of the “Doc Fix,” meaning 30 percent lower reimbursements to doctors who treat Medicare patients.
• The beginning of “The Sequester,” an automatic cut of $1.2 trillion in spending over 10 years, split evenly between defense and domestic programs, triggered by last year’s failure of the “Super Committee” to reach a deficit-cutting deal.
• And, finally, the debt ceiling will need to be raised again by year’s end, lest the nation default on its debt. Once this was automatic. Not any more.
This monumental list of problems would challenge the most capable and cooperative of Congresses. That the dysfunctional 112th Congress can address it in two months is a fantasy.
There are serious people at work on the deficit issue, just not enough of them. A bipartisan group of senators is working to find a mixture of spending cuts and revenue increases that both sides can live with. Senate Budget Chairman Kent Conrad, D-S.D., has proposed a 10-year program modeled on the work of the Simpson-Bowles deficit reduction commission in 2010.
But neither the left nor right wing was happy with Simpson-Bowles. So everyone’s waiting for the election.
A deal must be reached, regardless of who wins. Without a deal, nearly everyone in America will see a tax increase. The poor will lose access to services and pay 2 percent higher taxes. Families in the middle — those earning at the median household income of about $50,000 — would pay an additional $1,700 a year. Twenty-six million more upper-middle-class taxpayers would be socked with the alternative minimum tax. Wealthy taxpayers would not only see their tax rates go up, but they’d also pay more on capital gains and more in inheritance taxes. They will scream the loudest.
The bipartisan Committee for a Responsible Federal Budget estimates that without a deal — if everything falls off the cliff — it would cost the economy $1 trillion in 2013-14. Growth would stop. The economy could plunge back into recession.
The Christmas season will be chaotic. Unless Congress can summon itself in a great national cause, far worse lies ahead.
