|“Fiscal Cliff?” Don’t Liberals Constantly Claim Fealty to Clinton-Era Rates?|
By Timothy H. Lee
Thursday, November 29 2012
An urgent alert atop the official White House website announces the following:
“If Congress fails to act before the end of the year, every American family’s taxes will automatically go up. A typical middle-class family of four would see its taxes rise by $2,200 starting in 2013.”
So what’s the problem? Aren’t liberals always demanding a return to Clinton-era rates?
Moreover, why would only Congress be culpable for a failure to act? Barack Obama’s party controls the Senate half of Congress, and his administration would by logic be equally guilty of failing to agree. Recall that Obama has flatly threatened to veto any bill that doesn’t satisfy his demands.
Additionally, Obama extended current tax rates once in 2010, and nothing prevents him from doing so again – even if temporarily – while the parties negotiate a longer-term agreement. On that occasion in 2010, Obama claimed that economic conditions were simply too precarious to endure tax increases. Today’s economic growth, however, is even more sluggish. Yet he considers the time ripe to change course and demand tax hikes? That’s the pinnacle of illogic.
But set all of that aside for a moment. There’s an even deeper cognitive dissonance of which Obama and liberals are guilty.
Namely, the approaching “fiscal cliff” is essentially what they advocated during this year’s presidential campaign.
Recall the orgy of nostalgia for the Clinton presidency, the way in which Clinton himself dominated the Democratic convention and the campaign commercials he cut in order to save Obama from his own failures. In one commercial, Clinton specifically tells viewers, “This is a clear choice,” and proceeds to claim that, “President Obama has a plan to rebuild America from the ground up … that’s what happened when I was President.”
But if a return to Clinton policy is the panacea, then what explains Obama’s sudden “fiscal cliff” aversion? Allowing current tax rates to expire would return them to where they stood at the end of his Administration.
Although liberals mischaracterize the 2001 and 2003 tax cuts as benefitting only “the rich,” the simple fact is that they cut every tax bracket. The five tax brackets of 15%, 28%, 31%, 36% and 39.6% were replaced by six brackets of 10%, 15%, 25%, 28%, 33% and 35%, respectively. By 2007, incoming federal revenues had reached an all-time high, and the federal deficit was merely $161 billion.
So are liberals now admitting that the Bush tax cuts weren’t so bad after all? Or are they admitting that things weren’t so perfect under Clinton after all? It won’t suffice to respond that only the top bracket for “the rich” is awry, because the lower bracket cuts constitute the overwhelming majority of dollars saved. According to the Economic Policy Institute, upper-income tax cuts would account for only $52 billion of the $202 billion total tax impact for fiscal 2013.
Or will liberals instead rationalize that it’s not the return of the higher Clinton tax rates that will plunge us into recession, but the allegedly draconian spending cuts?
Well, that doesn’t withstand scrutiny either.
If no agreement is reached by January 1, $200 billion in spending cuts will take effect. Catastrophic? Hardly.
Consider that last year’s federal spending reached $3.54 trillion, with a deficit of $1.1 trillion. Compare that to 2000, the last complete fiscal year over which Clinton presided, when total federal spending reached $1.77 trillion. Few people were complaining back then that the federal government was too small, and that lower level of spending certainly didn’t trigger a “fiscal cliff” or recession.
So perhaps liberals would alternatively rationalize that the problem is the immediacy of the change, rather than its magnitude. But does anyone doubt that if Mitt Romney had won this month’s election and announced $700 billion in immediate tax cuts, the market response would be effusive?
All of this serves to expose the more likely rationale for false concern over the “fiscal cliff” from Obama and liberals. To wit, dark economic clouds forming on the horizon suggest a coming storm regardless of what happens before January 1. Given Obama’s congenital unwillingness to take adult responsibility for the consequences of his own actions, he will need yet another all-purpose alibi as his capacity to blame his predecessor expires.
Accordingly, by stirring synthetic alarm over a “fiscal cliff” of his own making, Obama can scapegoat House Republicans for continuing economic malaise under his watch.
The question is how much longer voters and the mainstream media will tolerate it.
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