Cliff Notes: The Awakening

| December 11 2012

Cliff Notes: The Awakening

While President Obama and Speaker Boehner met on Sunday to discuss the fiscal cliff, the negotiations remain at a standstill. Everyone in Washington is hung up on tax rates, but they’re overlooking the root of the problem—government spending. Reality check:  No tax hike can dig us out of the $16 trillion hole we’ve gotten ourselves into, and some in Washington are starting to speak up on the matter.

Here’s what they’re saying…

New York Times

Tax Arithmetic Shows Top Rate Is Just a Starter
“Even if Republicans were to agree to Mr. Obama’s core demand — that the top marginal income rates return to the Clinton-era levels of 36 percent and 39.6 percent after Dec. 31, rather than stay at the Bush-era rates of 33 percent and 35 percent — the additional revenue would be only about a quarter of the $1.6 trillion that Mr. Obama wants to collect over 10 years. … That calculation alone suggests the scope of the other major tax issues to be negotiated beyond tax rates.” (Jackie Calmes, 12/8/12)

Bloomberg

IMF’s Lagarde Says U.S. Fiscal Agreement Should Be Comprehensive
“[A]n agreement that would only extend tax cuts for the middle class without addressing spending or entitlements would be insufficient to reassure the rest of the world, she [International Monetary Fund Managing Director Christine Lagarde] said.” (Sandrine Rastello, 12/9/12)

CBS Face the Nation

Bowles: Forget Taxes, Cut Spending
“Even if you raise the top rates back to the Clinton rates, that only creates about $400 billion over 10 years. That’s $40 billion a year. We have a trillion dollar a year deficit. That alone won’t solve the problem. We have to cut spending.” (Democrat Erskine Bowles, 12/9/12)

National Review Online

Former Obama Economic Advisers: We Need Entitlement Reform
“Former chairman of the president’s Council on Economic Advisers Austan Goolsbee tells National Review Online that any solution to America’s economic ills ‘cuts on discretionary and entitlement spending.’” (Eliana Johnson, 12/7/12)

Bloomberg

Orszag: We Must Address Entitlements
“In any case, Democrats should affirmatively want entitlement reform that is progressive and puts the crucial programs on a sounder footing. … The administration claims that it is committed to reforming Social Security — just not right now. But why would reform be easier in, say, 2014, when nothing is forcing action, than it is today?” (Peter Orszag, Editorial: “A Good Deal Will Raise Tax Rates, Fix Entitlements,” 12/4/12)

Politico

Poll: Spending and Deficit Top Concern
A recent Politico Battleground poll shows “government spending and the budget deficit” as a top concern (23%), followed by the economy (22%) among “likely” voters. (12/10/12)

Wall Street Journal

Tax Hikes of $80B Year = 7 Percent of FY2012 Deficit
“[President Obama] has argued his entire presidency that America’s debt hole could be filled by soaking the rich. He’ll now get his way, in a bill that likely provides $800 billion in revenue over 10 years, or $80 billion a year. To repeat: $80 billion a year. That is 7% of the $1.1 trillion deficit Mr. Obama ran in fiscal year 2012 alone. His tax hikes in hand, he can now explain why the hole keeps getting bigger.” (Kimberley A. Strassel, Editorial: “Obama’s Famous Tax ‘Victory,’” 12/7/12)

ABC

Coburn: Obama’s Plan Affects 7 Percent of Deficit
“Even if you do what he [President Obama] wants to do on tax rates, you only affect 7 percent of the deficit. We have spent ourselves into a hole, and we’re not going to raise taxes, borrow money and get out of it.” (“‘This Week’ Fiscal Cliff Panel,” ABC’s’ This Week with George Stephanopolous, 12/9/12)

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