Dec 04 2012
Treasury Secretary Timothy Geithner over the weekend contended that Republicans will ultimately accept a proposed tax hike on the nation’s wealthiest 2% as part of the so-called “fiscal cliff” negotiations. House Majority leader John Boehner, who has fiercely rejected any compromise on taxing the rich countered yesterday with a plan to increase the minimum Medicare eligibility age and reduce the cost-of-living increases to social security payouts.
Most observers agree that any deal that is reached, is likely to come in the last possible hours before the deadline. Meanwhile, the New York Times’ Paul Krugman describes the “fiscal cliff” as more of an “austerity bomb.” Former Labor Secretary under Clinton, Robert Reich suggests that the President ought to let the deadline pass and then address individual problematic tax hikes at a later date. Dave Johnson at the Campaign for America’s Future has surmised that the hysteria surrounding the negotiations is beginning to follow Naomi Klein’s Shock Doctrine script – a scare tactic used to push forward controversial policy.
The unfolding political theater has led to what many are calling a “game of chicken” between Republicans and Democrats, with both sides allowing for only minor policy changes.
The President’s plan, according to the Wall Street Journal, includes $1.6 trillion in tax revenues, $50 billion in stimulus, a one year hold on defense and domestic program cuts and $400 billion in savings from Medicare and other social safety net programs.
GUEST: Mattea Kramer, senior research analyst at the National Priorities Project and lead author of the new book “A People’s Guide to the Federal Budget.”