Sequestration and the Fiscal Cliff

General General Discussion
1

It’s time to turn our attention to some pressing matters now that the election is over and nothing has really changed (despite spending billions on the campaigns). That means addressing the sequestration provisions of the 2011 Budget Control Act and the expiring Bush Era tax rates.

For those not familiar with sequestration, it is a set of automatic spending cuts that go into effect unless Congress can meet certain budgetary spending goals. Well, they can’t. So, it’s a foregone conclusion that we will see $1.2T in spending cuts over the next 10 years (starting with $110B in 2013) unless Congress repeals the bill.

While $1.2T in cuts over 10 years seems like small potatoes when viewed through the lens of our $1.3T/year deficit and $16T debt, most of the cuts will be a bitter pill for the GOP. For example, defense spending is disproportionately affected with 50% of the cuts while comprising only 20% of our budget. The $500B in domestic cuts will also hammer seniors with additional cuts in Medicare over those already enacted by Obamacare - all while a leftist media plants the blame squarely on House Republicans.

Personally, I hope that the GOP blocks any attempt to remove the sequestration provisions. Yes, it will be painful. However, things will only get worse if they kick this spending ball down the road for another few months.

As for the taxes, it is clear that some form of a hike looms on the horizon for 2013. How big is anyone’s guess. The options include full Bush Era repeal which would likely put us in a deep recession, verses raising rates on families making more than $250K - $1M. Well, let the class warfare begin…

2

. . . because it is.

Starve the beast.

Maybe if they’re faced with cutting entitlements, defense, or alphabet agencies/departments, they’ll pick agencies and departments. One can have a dream.

Sent from my phone while I was on the toilet pooping

3

I would suggest you look to Europe to see what happens when the left has to choose between a strong military and a social program.

That said, they are probably shitting themselves thinking about our cuts impacting NATO and forcing them to defend their own countries.

What will be interesting will be the reaction from Washington to the debt bombs in the state budgets when they finally go off, which should be during Obama’s last term. If skillful, the stupid party, er, I mean the Republicans, will build in a firewall that will make the blame to go the Democrats.

bc

4

Actually you can go to the Tax Policy Center and see how big they are. And it’s not an option, the Bush Tax cuts are expiring on 12/31 there is no doubt about that. If Congress and the administration do nothing they simply expire for everyone (not just the wealthy).

Also the Social Security and Medicare tax cuts expire on 12/31 too. These are separate from the Bush tax cuts. Expect to pay about 3% more tax on SS and Medicare starting in Janauary. Neither side will extend those.

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Agreed, they will expire as there is not enough time or willpower to extend them before Jan 1. However, there is the possibility of another retroactive law that restores some or all of the Bush Rates. This happened 2 years ago when the Bush Tax Rate expired and Obama signed a law to temporarily extend them for 2 years. This time, the economy is a little better so there is little chance that we will get them fully restored. The House GOP leadership has said today that they are willing to entertain some “revenue options” (i.e. tax hikes) if real spending cuts are on the table.

BTW, there is a reason why I call them Bush Tax Rates instead of Bush Tax Cuts. Language matters and we need to start practicing that…

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Which is what they will do, and they knew they would do it when they passed the bill in the first place.

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Those cuts should take place anyways. At the rate they are spending now (DNC & GOP) we will accumulate more debt in the last 4 years and the next 4 years than every president prior to Obama (including Bush2) combined.

How this debt will impact us in the future is a lot more painful than what amounts to a ~5% cut in spending a small tax increase now. These idiots have managed to get our fiscal situation in such a mess we have no had a budget in years, and somehow in just 3 years our new baseline on spending seems to require at least a trillion or more in new debt spending a year.

In 2010 the GOP had the biggest gain the House in decades and nothing has changed from when Democrats had super majority and the WH. Why did we suddenly go from 300-600 billion a year in new debt to well over 1 trillion, and now suddenly a ~5% spending cut is a ‘fiscal cliff’.

If this level of spending is somehow necessary then taxes should be raised to pay for it. No more of this putting a trillion + on the backs of our youth so grandma doesn’t get her bennies cut. We need a constitutional balanced budget Amendment where new debt has to be approved by 3/4ths of the state legislatures. Congress is not responsible enough with the spending, and need new checks and balances put in place. We either take in the money through taxation or don’t spend it in the first place.

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There is no question in my mind they’ll do some patch work and repeal the bill, or fix it retroactively. Neither side would be willing to take a risk of a political fallout if they didn’t fix it. The only question that I have is whether they’ll throw the upper bracket under - which Dems would gladly do, or repeal it for everybody.

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Business are already laying off people since the O got the Hot-Seat again. They know what is coming, and no one is wanting to risk putting money in a bad economy when the risk of failure is very high. The sad thing is, it is the service industry that is chugging along and nothing in regards to manufacturing increase domestically. As prices are rising, people are having to take the less paying jobs that are available. This does nothing good in generating revenue.

Instead of looking who to tax, the government needs to widen the tax base, which heavily includes getting people back to work with good paying jobs. But the guy to do that lost to a rather narrow margin.

The gimmees are running the economy and it is looking the producers are beginning to have enough.

My college professors is boggled why the American companies are sitting on their asses with well over several trillion dollars. Academics, I swear. That whole invest in America is more like give to America and just get back a lousy thank you.

10

I personally don’t want to pay more in taxes.

But, if someone is matching my tax increase with spending cuts, I am willing to do it.

As long as EVERYONE feels the pain equally. From poorest to richest. No more of this robbing Peter to pay Paul crap.

When you aren’t paying for it out of your own pocket those “government” freebies seem like a great deal.

Even if it is only a 1 time $5 tax, EVERYONE needs to feel what it is like to have the fruits of YOUR personal labor taken and spent on something that you may or may not get any personal benefit for. Granted, I don’t work anywhere near as hard as some do, (I am standing here typing instead of working right now:rolleyes:) but I did put in a lot of effort in college and after college to get into the position that I am now.

I don’t mind giving a helping hand up, but I am getting really tired of doing all the pulling.

I don’t want to see people suffer or people lose jobs (myself included) but I also don’t want Greece to happen here either. We have got to stop spending everyone elses money.

11

If people want the programs then we need to raise taxes to pay for it. America re-elected Obama. Raise taxes to meet the cost of government. Everyone needs to pay it, too. Social Security and Medicare taxes need to go up to around 10-15% on the employee side, income taxes need to be raised by about 15-20% across the board, and no more tax deductions. What percent bracket you are in is what you pay. Then we’ll see if people really want these programs still. Right now the cost is simply passed on as debt most people have no clue what the actual amount is, or what the future projections are.

In Germany they have social programs, and their Federal government’s budget deficit is supposed to be around 35.9 billion this year according to the WSJ article I read yesterday. Our government ads that to our debt in about a week. Yes I know they have a lot less people but compared per capita its a lot lower than ours.

If people want the safety nets, SS, and welfare then they need to pay for it. No more putting it off for future generations while they live better than their kids will.

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If people want the programs then we need to raise taxes to pay for it. America re-elected Obama. Raise taxes to meet the cost of government. Everyone needs to pay it, too. Social Security and Medicare taxes need to go up to around 10-15% on the employee side, income taxes need to be raised by about 15-20% across the board, and no more tax deductions. What percent bracket you are in is what you pay. Then we’ll see if people really want these programs still. Right now the cost is simply passed on as debt most people have no clue what the actual amount is, or what the future projections are.

Yep.

Flat %tax every year, no getting anything back.

EVERYONE has to pay SOMETHING and for every dollar in increased taxes, a dollar needs to be dropped out of someones budget. And to prevent politicing, tax it flat off the top. Everyone loses a % of their budget. They will find a way to do more with less, just like the people who’s taxes are getting raised. It might also stop this stupid crap of making sure you spend your full budget every year so that you don’t get it “reduced” the following year. Even if you have to do things that don’t need to get done, just to spend the money.:rolleyes:

Belt tightening has be be across the board. No special treatments for homeowners, multiple kids, teachers, capital gains, dividends, student loans etc. You get money, you pay taxes on it, just like everyone else.

Social Security tax limit gets removed, you make $1,000,0000 a year, you pay on all of it. Not just part of it.

You get welfare? You have to pay some taxes on it.

Does it suck to pay taxes? Yep.

Is that fair? No.

Neither is life or the fact that some people pay taxes and others don’t. If my mother, who worked all her life has to pay taxes on her social security benefits, people doing nothing can pay on theirs.