GOP threatens global economy with gamesmanship over tax cuts for the rich
After meeting with private sector business leaders at the White House on Wednesday, President Obama told reporters that “everyone is looking to America” for a long-term agenda for prosperity. However, the president also made it clear that what’s “holding us back” is the rigid position of House Republicans and their defense of expensive tax cuts for the wealthy.
While House Republicans have not even agreed to a compromise that would avoid pushing the country off the fiscal cliff, there is already the suggestion that Republicans would deliberately crash global financial markets by taking the debt ceiling vote hostage in two months, as they did in 2011.
House Speaker John Boehner told reporters on Wednesday morning that the current proposals to head-off a fiscal cliff disaster, “couldn’t pass either house.” But that may not be entirely true. In recent days, some Republicans have suggested that they would break party ranks and vote to extend the Bush tax cuts for the middle-class. They also recognize the inevitability of raising top tax rates if the deficit is to be brought under control.
Center for American Progress fiscal reform director Seth Hanlon said in the New York Times:
“As we confront these fiscal challenges, the highest income Americans, who have seen their incomes grow much faster than the middle class, are paying much lower taxes than they were only a decade ago. The top 1 percent, which brought home 17 percent of all income over the last five years, has seen its overall federal tax rates cut by about one-fifth since the mid-1990s. We can achieve significant deficit reduction simply by asking as much of people at the top as we did during the 1990s.”
Boehner has so far refused to allow members of the House to vote on an extension of the Bush tax cuts for the middle class because it does not also extend them for the top 2 percent. Therefore, the primary stumbling block in fiscal cliff negotiations remains Republican insistence on extending lower tax rates for Americans earning more than $250,000 a year.
However, it’s not an increase in taxes that economists fear would cause another recession. The super-committee sequester deal that set up the fiscal cliff scenario last year also includes deep spending cuts that would cause about 277,000 government worker layoffs in 2013 and more in 2014 as the ripple-effect spread throughout the economy.
It is crystal-clear that the Republican Party, which suffered significant losses in the 2012 elections running on tax cuts for the rich and austerity for everyone else, has an agenda that has nothing whatsoever to do with serving the American public responsibly.
The American economy is directly tied to global financial markets. If Republicans continue to demonstrate reckless behavior by substituting hostage negotiations for responsible governing, businesses will look for more politically stable countries to invest in. That is bad for the economy and bad for America’s global stature.
The world is watching, but Republicans do not seem to care how they disgrace and discredit America in the eyes of the world. Their political gamesmanship in refusing to compromise on a fiscal cliff deal is an embarrassment to every American.
A recent Pew Research poll showed that only 27 percent of Americans would blame Obama for causing America to fall over the fiscal cliff on Jan. 1, 2013, while 53% say it will be the Republicans’ fault.