Fiscal Cliff: The Cliff of Shame
Published in L'Express
(France) on 31 December 2012
by Philippe Coste (link to original)
(France) on 31 December 2012
by Philippe Coste (link to original)
Translated from
by Laurence Bouvard.
Edited by Gillian Palmer.
In the eyes of most Americans, what is happening in Washington this weekend is shameful and scandalous, but perhaps not yet catastrophic.
Certainly, without an agreement between the Republicans and the Democrats in Congress for a program to reduce the deficit before midnight on December 31, an automatic plan will go into effect that was accepted 18 months earlier as a legislative scarecrow. It entails a “fiscal cliff” of $500 billion worth of general tax increases and ferocious spending cuts which, apart from causing social and fiscal injustice, will also be the surest way to interrupt the American economy’s recovery and plunge it back into recession.
The current dispute concerns a fairly moderate increase in taxes for incomes above $250,000, something which Barack Obama promised throughout his campaign and which has always been bitterly opposed by the Republican majority in the House of Representatives. On Sunday the two parties seemed to be coming closer to an understanding toward a threshold of $500,000, despite the president’s commitment to veto any text raising the level above $250,000. Will he keep his word?
In any case, it is highly unlikely that an agreement will be reached before the 12th stroke of midnight; in which case, on January 2, the Democrats will propose a law reducing the toughest tax impacts on middle class Americans. If this should fail, another law will be proposed on January 4, the first day of the new Congress, which has a Republican majority reduced by last November’s elections. This would be an extreme restoration which will retain the bare minimum and avoid a recession, but not a new American political bankruptcy.
Obama wanted to remind the Republicans once and for all about the results of the recent presidential election. Armed by its weakened majority in Congress, the party doesn’t look like it has decided to end its four years of entrenched warfare, being unable to reason with the extremist electoral base of those elected to Congress. The next deadline in February is none other than the debate over raising the ceiling on American debt, which will provide an opportunity for a new offensive from the tea party.
Will the Republicans be able to pay the high price for their intransigence in the 2014 elections? Electoral rejection will be eased by implausible district divisions which transform the districts into impregnable ideological bastions. If the world stock exchanges begin to fall on Monday morning, it will be as much to punish American budgetary procrastination as the inability of the United States to decide its fate within the heart of its democratic institutions. That would be worrying indeed.
Certainly, without an agreement between the Republicans and the Democrats in Congress for a program to reduce the deficit before midnight on December 31, an automatic plan will go into effect that was accepted 18 months earlier as a legislative scarecrow. It entails a “fiscal cliff” of $500 billion worth of general tax increases and ferocious spending cuts which, apart from causing social and fiscal injustice, will also be the surest way to interrupt the American economy’s recovery and plunge it back into recession.
The current dispute concerns a fairly moderate increase in taxes for incomes above $250,000, something which Barack Obama promised throughout his campaign and which has always been bitterly opposed by the Republican majority in the House of Representatives. On Sunday the two parties seemed to be coming closer to an understanding toward a threshold of $500,000, despite the president’s commitment to veto any text raising the level above $250,000. Will he keep his word?
In any case, it is highly unlikely that an agreement will be reached before the 12th stroke of midnight; in which case, on January 2, the Democrats will propose a law reducing the toughest tax impacts on middle class Americans. If this should fail, another law will be proposed on January 4, the first day of the new Congress, which has a Republican majority reduced by last November’s elections. This would be an extreme restoration which will retain the bare minimum and avoid a recession, but not a new American political bankruptcy.
Obama wanted to remind the Republicans once and for all about the results of the recent presidential election. Armed by its weakened majority in Congress, the party doesn’t look like it has decided to end its four years of entrenched warfare, being unable to reason with the extremist electoral base of those elected to Congress. The next deadline in February is none other than the debate over raising the ceiling on American debt, which will provide an opportunity for a new offensive from the tea party.
Will the Republicans be able to pay the high price for their intransigence in the 2014 elections? Electoral rejection will be eased by implausible district divisions which transform the districts into impregnable ideological bastions. If the world stock exchanges begin to fall on Monday morning, it will be as much to punish American budgetary procrastination as the inability of the United States to decide its fate within the heart of its democratic institutions. That would be worrying indeed.