As the nation careens toward the end of the year "fiscal cliff," politicians and pundits are expressing many assumptions, some of which are incorrect. Here are five common myths about the fiscal cliff.
Myth #1: Democrats Want to Compromise, Republicans Do Not
A plurality of Americans believe that if a compromise is not reached, Republicans will be mostly to blame. This should come as no surprise when much of the reporting on the fiscal cliff implies that House Republicans are the main obstacle to reaching an agreement. more >>
Congressional Democrats are saying that they are not willing to consider changes in Social Security in a deal to avoid the "fiscal cliff," even though the Simpson-Bowles commission charged with coming up with a plan insists that Social Security can't be ignored.
Sen. Dick Durbin (R-Ill.) argued on ABC's "This Week" on Sunday that Social Security needs only a few small tweaks and no major reforms to ensure the long-term solvency of the program.
"Social Security does not add one penny to the deficit," he said. "Not a penny. It's a separate funded operation, and we can do things that I believe we should now, smaller things, played out over the long term that gives it solvency." more >>
As President Barack Obama and members of Congress negotiate a solution to the pending "fiscal cliff," they should protect programs for the poor, argued the Circle of Protection, an association of religious leaders, in an open letter released Tuesday.
"As we do all we can to help families and individuals living in poverty, we need our elected leaders in Washington to do the same. Our country faces many long-term fiscal challenges and must act now to grow the economy, create jobs, and begin reducing our deficits. These are significant challenges that will require sacrifices from many, but we cannot solve them on the backs of the poor," the letter states.
The fiscal cliff is a set of automatic tax increases and spending cuts that will go into effect next year unless Obama and Congress agree to changes. The Congressional Budget Office has warned that the fiscal cliff will likely cause a recession, but preventing the fiscal cliff without replacing it with long-term deficit reduction would cause even greater problems in the future because the nation's debt, now over $16 trillion, will become unsustainable. more >>
President Barack Obama and his fellow Democrats have been arguing that Republicans want to protect tax cuts for "millionaires and billionaires," even though Democrats are really talking about raising taxes on those making more than $250,000. An idea appears to be floating around some Republican congressional circles to offer to raise taxes on actual millionaires while preventing taxes from going up for those making more than $250,000.
One of the concerns Republicans have about raising taxes on those making more than $250,000 is that it will raise taxes on many small business owners who pay personal income taxes rather that corporate taxes. If taxes are raised on small businesses during a slow economy it could slow hiring, they argue.
One of the main sticking points so far in negotiations over what to do about the "fiscal cliff" is that Republicans want to raise revenue by only eliminating tax deductions and credits and some Democrats are insisting on increasing tax rates on upper income Americans. more >>
Democrats may have the upper hand in debates over what to do about the pending "fiscal cliff" because they have less to lose than Republicans if the nation goes over the cliff.
The fiscal cliff is a set of spending cuts and tax increases set to go into effect at the beginning of next year if Congress and President Barack Obama make no changes. The Congressional Budget Office estimates that the fiscal cliff will cause a recession. But getting rid of the fiscal cliff without implementing long term deficit reduction will cause even bigger problems in the future because the rising national debt, now over $16 trillion, is unsustainable.
If Congress and Obama do not agree to a solution, going over the fiscal cliff will move the country in a more liberal direction. Conservative columnist George Will has been among those making this point. more >>
House Minority Leader Nancy Pelosi said Sunday that Democrats would not support a bargain with Republicans that only includes revenue increases from eliminating tax deductions and credits. Tax rate increases must also be part of the package, Pelosi insisted. Conservative pundit Bill Kristol said he expects Republicans to go along with a tax rate increase.
Congressional leaders met with President Barack Obama on Friday to discuss plans to avoid the "fiscal cliff" and chart a path forward on a "grand bargain" deficit reduction package. Pelosi described the meeting as congenial.
"The spirit at the table was one of, everybody wants to make the best effort to get this done," Pelosi said in an interview on ABC's "This Week." more >>