NORMAN — Editor, The Transcript:
I’d like to make a few observations as the media and everyone remotely associated with politics obsesses about the “fiscal cliff.” First of all, it is not a cliff.
True, a number of changes to the tax code and the federal budget are set to kick in Jan. 1. However, disaster does not strike Jan. 1 as everyone seems to assume. People will see a reduction in their take-home pay in their first paychecks after the first of the year, but the effects are cumulative over the course of a year.
If a middle-class family of four sees their taxes go up $2,000 over the next year, only one 12th of that cost is incurred in January. Sequestration cuts to all areas of the federal budget begin Jan. 1, but implementation across the federal system will occur throughout the year. Therefore, the cliff is more of a gentle slope.
Second, the changes are not, in and of themselves, bad. Remember back in 2000 before two rounds of the Bush tax cuts were implemented? We had a budget surplus. Everyone wrings their hands over the size of the federal deficit. Letting the Bush tax cuts expire is one of the best ways to pay down the federal debt everyone claims to be so concerned about.
Third, neither party has a plan that even remotely addresses the deficit they claim their plan will fix. Republicans would have you believe that raising the Medicare eligibility to 67 will eliminate the looming problems with Medicare funding. It won’t and, instead, according to calculations by OK Policy, seniors 65-66 will spend twice as much for their medical care as the government will save by denying them Medicare benefits.
Means testing for Social Security? Not even Republicans believe this idea has a snowball’s chance in hell. Democrats would have you believe that raising the tax rate on the top 2 percent of income earners by a few percents will generate enough tax revenue to make huge inroads on the deficit. It won’t.