Bigger Fish to Fry After Fiscal Cliff

by John M. Curtis
(310) 204-8700

Copyright Jan. 2, 2012
All Rights Reserved.                                         

           With the help of 70-year-old Vice President Joe Biden, President Barack Obama dodged a bullet, getting a short-lived deal on the so-called “fiscal cliff.”  Biden made an emergency house call to Senate Majority Leader Mitch McConnell (R-Kt.) who somehow cobbled together a deal on Monday, New Year’s Eve.  Next complication was getting the House to go along with the deal that reinstated Bush-era tax cuts for middle class taxpayers while raising rates on individuals above $400,000 or households $450,000.  When GOP Party Boss Grover Norquist announced his support of the Senate deal, it gave permission of diehard anti-Tax zealots to go along.  When the dust settled late-night New Years’s Day, House Speaker John Boehner (R-Ohio) finally called for the vote, approving the Senate deal [257-167].  Medicare providers and the jobless collecting unemployment insurance breathed a sigh of relief.

             House leadership, especially House Majority Leader Eric Cantor (R-Va.) and House Budget Committee Chairman Paul Ryan (R-Wis.) resented the Senate’s strong-arm tactics where Boehner was pushed into an 11th hour vote.  Biden’s urgent move in the Senate to bypass the obstinate House came weeks after Boehner couldn’t get his leadership to compromise on the “fiscal cliff.”  Cantor and Ryan wanted to reform Medicare, Medicaid and Social Security, before reinstating Bush-era tax cuts to 98% of wage-earners and 97% of small businesses.  “Our opportunity here is on the debt ceiling,” said Sen. Pat Toomey (R-Penn.) on MSNBC.  Toomey thinks the GOP has more leverage on the debt-ceiling than in the “fiscal cliff” debate where Dec. 31 loomed as an inflexible deadline.  Republicans think they’ll be able to pressure Obama into entitlement reform to increase the debt ceiling.

             Like a cash limit on a credit card, the government is slated to run out of credit in the next few months, requiring Congress—like a credit card company—to increase the limit.  “We Republicans need to be willing to tolerate a temporary, partial government shutdown, which is what that could mean,” said Toomey, threatening to shutdown the federal government.  Toomey’s threat is especially distasteful since he doesn’t offer to sacrifice his own salary and expense account.  Before the GOP tries to strong-arm the country on the debt ceiling like they did in 2011, Obama should make it clear that  government employees—including elected officials—will not receive their paychecks.  Blaming federal budget deficits on entitlement spending, the GOP ignores the growing share defense spending plays in the overall budget.  Blaming only entitlement spending doesn’t give the whole picture.

             As the country transitions out the Iraq and Afghan wars, defense spending should shrink accordingly.  While expected cuts in government spending impacts the Pentagon in the next two months, it doesn’t, as the GOP insists, weaken U.S. national security.  “This is going to be much uglier to me than the tax issue . . . this is going to be about entitlement reform,” said Sen. Bob Corker (R-Tenn.), not acknowledging that appropriate Pentagon cuts should reduce the share of the deficit to the nation’s overall Gross Domestic Product.  Why Republicans pick only on entitlement reform is precisely why they’re viewed as unfit to govern.  When former President George W. Bush decided to spend over $1 trillion on Iraq, he drove the nation into massive red ink.  Nobel Prize winning Columbia University economist Joseph Stiglitz warned Bush about how fighting—and financing—two wars could bankrupt the country.  When banks ran out of cash in 2007, his predictions came true.

             GOP politicians like to blame the nation’s red ink on government entitlement. While there’s nothing cheap about running heath programs like Medicare and Medicaid, prosecuting foreign wars also cost big bucks.  While know one knows what’s around the corner, as the economy transitions from war to peace, it should provide more revenue to fund important domestic programs.  “This is the debate that’s going to be far more serious.  Hopefully, now that we have this other piece behind us—hopefully—we’ll deal in a real way with the kinds of things our nation needs to face,” said Corker, completely ignoring the peace dividend that should help finance more domestic programs without slashing government entitlements.  Whether seniors, disabled or poor people live the South or North, East or West, they have the same needs for adequate pensions and health care services.

             GOP politicians need to take seriously the relationship between the federal government and the wide swath of recipients of government largess.  If Corker thinks he can slash Medicare and Medicaid funding without dealing with the defense budget or government subsidies to the oil industry, he’s not playing with a full deck.  Shifting priorities away from foreign wars and nation building should put cash back in the U.S. Treasury to help fund important national priorities, including an obsolete space program currently in shambles after retiring the Space Shuttle Fleet last year.  “We are ensuring that taxes aren’t increased on 99% of our fellow Americans,” said House Rules Committee Chairman David Dreier (R-Calif.) throwing his support behind the Senate’s “fiscal cliff” bill.  When debt ceiling talks resume, the GOP should think twice about shutting down the federal government.

 John M. Curtis writes politically neutral commentary analyzing spin in national and global news.  He's editor of OnlineColumnist.com.and author of Dodging the Bullet and Operation Charisma.