I long for the fiscal cliff. I really do. It made for great political discourse and was a superb sound bite. And there was the perceptible fear that one might all actually fall off it. If it had really been there, that is.
The latest buzz in Washington is not nearly as precipitous. It’s hard to visualize sequestration. It can’t consume you. It’s not about planets bumping into each other. It’s not even about locking Congress up in a room for three weeks (although the thought is compelling). All we know is that Republicans have warned that it will happen March 1 if Democrats continue to push their budget reduction goal of closing loopholes on wealthy taxpayers.
I don’t know whether to go into survivalist mode or yawn.
According to a report from the Congressional Research Service, which can be found at http://www.fas.org/sgp/crs/misc/R42050.pdf, sequestration is a process of automatic, largely across the board spending reductions under which budgetary resources are permanently canceled to enforce budget policy goals. It is of current interest because it was included as an enforcement tool in the Budget Control Act of 2011.
Medicare and Social Security would not be affected. At this time, it is unclear how sequestration would impact farm subsidy programs.
The White House thinks sequestration would be disastrous. “There is no question that we need to cut the deficit,” said a fact sheet from the White House, “but the President believes it should be done in a balanced way that protects investments that the middle class relies on. Already, the President has worked with Congress to reduce the deficit by more than $2.5 trillion, but there’s more to do. The President believes we can not only avoid the harmful effects of a sequester but also reduce the deficit by $4 trillion total by cutting even more wasteful spending and eliminating tax loopholes for the wealthy.
“Our economy is poised to take off, but we cannot afford a self-inflicted wound from Washington. We cannot simply cut our way to prosperity, and if Republicans continue to insist on an unreasonable cuts-only approach, the middle class risks paying the price.”
The Republicans have drawn a similar line in the sand. They don’t want any part of a plan with another round of taxes on the wealthy.
Ironically, increasing taxes on the wealthy, which has already been done, or even closing tax loopholes on them, is not going to make or break the budget. In fact, those who’ve done the numbers say raising taxes on the wealthy will generate only about $56 billion to $70 billion in additional revenue for fiscal 2013 alone. That’s about 1 percent of what the government spent in 2011.Closing loopholes on them may not raise much more.
It’s become a common refrain in Washington these days. Who is going to blink first?