|Number 520||December 17, 2012|
This Week: The Danger of the Phony "Fiscal Cliff"
I promised in the last issue of the Notes that I would soon talk about something called the "Fiscal Cliff," and the budget and taxation negotiations that are going on this month in Washington DC. Let's be clear right from the start: The phrase "Fiscal Cliff" is nothing but Propaganda. But that doesn't mean that we can ignore it. Far from it. The results of these hysterical negotiations could have far-reaching effects on your life and mine. And mostly bad ones. That's why the hysteria has been created: To scare us into accepting the erosion—or loss—of some public programs that were created as a response to massive public struggle and organized work by many brave people who came before us.
We're talking about programs like Social Security, Medicare, and Medicaid, cutbacks to which could be a part of what is being called a "Grand Bargain" between Democrats and Republicans. What might be a "bargain" for them would be a disaster for us, and I fear that many people underestimate the danger. So this issue of the Notes, and the next one, and maybe the one after that, will be devoted to helping people understand the risks of these talks, and hopefully to motivate you to get involved in the discussion.
About these next couple of Notes: After I had been researching this Fiscal Cliff for a while, I gave up on the idea of any sort of linear explanation of what is going on. It's too complicated, and it's not important to master all the details. In fact, one of the historical obstacles to the participation of "regular people" in policy discussions about budgets and economics is that we are always told it's "too complicated" for you and me. It's not. I hope, when you've finished reading this collection of comments and facts you will agree with me, and be moved to do something.
There is no "Quote" of the Week this week. Or, rather, there are at least four of them, but this week they're stashed in the piece called "Fiscal Cliff Notes."
Since this entire issue of Nygaard Notes is about something that we are being encouraged to call the "Fiscal Cliff," I thought it would be good to begin with some sort of definition of what that crazy term is supposed to mean. Or, perhaps, what it could theoretically mean if the term were intended to actually describe something, rather than simply fulfilling a Propaganda function.
The best concise summary of the phenomenon that I've seen so far is seen in a November 20th statement by the Democratic Socialists of America entitled "Fiscal Cliff or Fiscal Fake-Out?" There we read: "If no changes to the Budget Control Act (BCA) of 2011 are made before January 1, 2013, the Bush tax cuts will expire (including those for the rich), as will the payroll tax cuts. Extended unemployment benefits will be ended, and an additional $110 billion in spending cuts will go into effect. Half of the cuts will be in defense and half in discretionary domestic programs, which fund anti-poverty programs and the federal regulatory agencies."
This deadline—January 1st—that is in the Budget Control Act is an artificial deadline, and is there largely as a result of the anti-deficit hysteria that has been imposed on us by the One Percent and the elected officials who are allied with them. As always, Big Media plays its role in service to powerful interests, it's role being to turn our attention away from the real issues (jobs and inequality) and toward the preferred issues (debt and deficits). We all have to sacrifice, y'know. You, me, the Rockefellers, Bill Gates—everybody!
(For a very illuminating (and lengthy) blow-by-blow account of the negotiations leading up to the BCA, check out "What's Happening With the Debt Ceiling Explained" by the Mother Jones reporting staff, found HERE. )
We don't know much about the terrifying negotiations now underway on the federal budget. We only know what we are told, which is that there is a prospect of a "Grand Bargain" between Democrats and Republicans that will involve "suffering" for everyone. But forget the details, all we really need to know is that there is no "Fiscal Cliff," and if there is no budget agreement in place by December 31st, we'll all probably be better off than we would be with whatever kind of a deal might be struck behind closed doors. In the meantime, remember: Anything called a "Grand Bargain" would be a bad deal for anyone not in the One Percent. Also remember that, anytime you hear the phrase "Simpson-Bowles" (or "Bowles-Simpson") it's time to protest.
The good news is, there is still a chance that popular opposition to this nonsense may prevent the worst of it. If you want to be a part of the resistance, read on to find out what to do and how to learn more.
To Do. Now.
Here are a few things that you can do RIGHT NOW:
A good place to start as far as knowing what to say about this phony "Fiscal Cliff" would be the Congressional Progressive Caucus (CPC). The CPC has new life, after a few years of being pretty low-profile. Comprised of 75 federal representatives (and one Senator) from 30 states, the CPC is a caucus within the U.S. House of Representatives that works to promote a progressive agenda within the halls of power. Lately they've been doing good work on budget- and deficit-related issues. (Not that anyone would ever know about it, since the media routinely ignores it, but still...) Two things to check out right now:
1. In July the CPC introduced a resolution (H. Res. 733) called the "Deal for All," which the Congressional Research Service summarizes thusly:
"House Resolution 733] Expresses the sense of the House of Representatives that any deal on taxes and spending to replace the Budget Control Act of 2011 should: (1) not cut Medicare, Medicaid, or Social Security benefits; (2) contain serious revenue increases, including closing corporate tax loopholes and increasing individual income tax rates for the highest earners; (3) significantly reduce defense spending to focus the U.S. Armed Forces on combating 21st century risks; and (4) promote economic growth and expanded economic opportunity by including strong levels of job-creating federal investments in areas such as infrastructure and education, and by promoting private investment."
Read more about the Deal For All HERE.
It's simple. It's straightforward. Tell your legislator to become a co-sponsor.
2. On December 1st a group of six legislators calling themselves the "Gang of Six" released their "Framework for Tax Reform." (No, you didn't miss anything; there was no mention of this anywhere in the media.) The "Gang" consists of Reps. Michael Honda (D-CA), Jan Schakowsky (D-IL), Keith Ellison (D-MN), John Conyers (D-MI), Raúl Grijalva (D-AZ), and Barbara Lee (D-CA). The Framework is something you should also tell your legislator about. If your legislator is one of the "Gang," write and thank them. Read about the Framework HERE.
National Activist/Research Groups
Finally, if you don't know where to start, here are a few national groups that are working on beating back the worst of the "solutions" to our overhyped deficit situation:
The National Priorities Project has a great section on their website called "What is the Fiscal Cliff? Resources on the Bush Tax Cuts, Sequestration, and the Lame Duck Congress." Read it.
The Coalition on Human Needs has a campaign called the "Strengthening America's Values and Economy (SAVE) for All" campaign. Check it out here.
The Center for Budget and Policy Priorities has a section on their website called "Understanding the Budget Debate." Worth looking at. (The graphics on their site are screwed up, but the information is all there.)
The Economic Policy Institute really pays attention to this sort of thing, and does great nuts-and-bolts research on economic issues. Read their reports and contact your local newspaper and/or legislators to tell them what you think. EPI analyst Ethan Pollack has a great piece called "The Five Serious Flaws of Bowles-Simpson: http://www.epi.org/blog/flaws-bowles-simpson/
The Center for Economic and Policy Research is similar to EPI, and also gets down to the nitty-gritty of the budget, debunking much of the propaganda that we find in the media about matters economic, and more.
If you know of any good groups that I missed, tell me about them and I'll put something a future Notes.
In the process of researching this issue of Nygaard Notes I ran across all kinds of useful and interesting things. Here are a few of my favorite excerpts from among the many things I looked at.
#1: Support A Do-Nothing Congress!
"If it wanted to, the United States Congress could easily solve the government's long term fiscal gap by doing what it does best: nothing. According to a new report from the non-partisan Congressional Budget Office (CBO), the United States federal government debt is projected to peak in 2015 and then drop substantially over the coming decades, all by itself if Congress can just sit on its hands and stop handing out tax breaks to individuals and corporations."
#2: "That's What 'Cutting' Means."
The excellent magazine EXTRA!, put out by Fairness and Accuracy in Reporting, has an article by Jim Naureckas that just came out on December 1st called "The 'Raising the Retirement Age' Scam: What They're Really Talking about Doing to Social Security." Here's a lengthy excerpt:
"In his first debate with Romney (10/3/12), Obama said of his opponent, 'I suspect that, on Social Security, we've got a somewhat similar position.... It's going to have to be tweaked the way it was by Ronald Reagan and...Democratic Speaker Tip O'Neill.' The point was glossed by the L.A. Times (10/4/12): 'At that time the retirement age was raised modestly and the payroll tax increased significantly.'
"When Reagan and O'Neill 'tweaked' Social Security in 1983, they didn't actually 'raise the retirement age'; you could retire at age 62 before, and when their plan is fully phased in in 2022 (barring further 'tweaks'), you will still be able to retire at age 62.
"The way Social Security benefits work is that the longer you delay getting them, the more you get per month. The Reagan/ O'Neill scheme cuts the benefit that you got at any particular age, so that people who retire at 64 get as much as people who retire at 62 used to get, people who retire at 65 get as much as 63-year-olds used to, and so on. You still reach the maximum retirement benefit by retiring at age 70—but that maximum benefit is smaller than it would have been if you had been born a generation earlier.
"This is what they called 'raising the retirement age.' There's a simpler, more understandable and more accurate way to describe it: 'cutting Social Security benefits.' You take the amount of money everyone's going to get, and you reduce it; that's what 'cutting' means."
Find the article HERE.
#3: "The 'Fiscal Cliff' Is Entirely Fabricated."
Liberation News ran an article in November called "Fiscal Cliff Deal: Both Parties Plan to Throw Workers off the Cliff." Here's my favorite paragraph:
"The 'Fiscal Cliff' itself is entirely fabricated. It was created as last year's debt deal, in which $1 trillion in automatic cuts would be made to social spending and future military expenditures unless the government passed a 'deficit reduction' plan. In other words: Republicans and Democrats agreed to automatically cut government programs if they could not agree on how precisely to cut government programs. This is the most recent example of what 'bipartisanship' really looks like."
Find the article HERE.
#4: "Hoping to Stampede Us into an Agreement"
Here's an excerpt from a short statement by the Democratic Socialists of America, in a November 20th release called "Fiscal Cliff or Fiscal Fake-Out?"
"Basically because Wall Street, large corporations and other members of the 1% are hoping to stampede us into an agreement that would exempt them or their favored programs from any cuts or tax increases. They are also hoping to slide something by during the lame duck session and to once again induce President Obama into a "grand bargain" that would likely avoid defense cuts and hit ordinary Americans with measures like later retirement ages, cuts in the real value of Medicare and Medicaid benefits and the use of a new cost of living measurement for annual Social Security increases. All these "reforms" would cut existing benefit levels. Many anti-poverty advocates fear that the 1% are using the Fiscal Cliff to undermine Social Security by transforming it from a universal social program to a means-tested program with diminishing benefits for seniors."