Since Tea Party Republicans led our nation to a fiscal cliff in 2011 by refusing to raise the debt ceiling without lowering the deficit, our economy has been held hostage. Unable to agree on budget negotiations, Congress instituted sequestration cuts intended to be so onerous that neither side would want them to take effect.
More than a year later, negotiations still have not been completed. As a result, come January 1, we will see massive cuts to the defense budget as well as social programs, including the so-called “entitlements” unless the two parties can reach agreement on alternatives.
If the cuts take effect, those who created our deficits will not be the ones to suffer the brunt of the cuts. Rather, almost all of the burden will be borne by the poor and the middle class.
The first ones to experience the pain will be the 2.1 million unemployed who will lose unemployment benefits at the end of this year. In addition, there will be cuts to Social Security and Medicare which will punish the elderly. Numerous other social safety nets will also see cuts affecting millions more of the working poor. And the proposed cuts to defense will be borne by middle class workers who will likely lose their jobs.
Moreover, the fiscal cliff will almost certainly send our economy spiraling downward into a deep recession which will have serious consequences for everyone except the very wealthy.
One need only to look at Greece, Italy, England and others to see the consequences of austerity programs such as that advocated by Tea Party Republicans. The results have included deep recessions, riots and political upheaval.
It would be the height of foolishness for Congress to follow these countries over the cliff. Certainly, our budget deficits and federal debt are of long-term concern. But they do not constitute a crisis. As the economy has improved, the Obama administration has already begun to cut the deficit. That should continue. But it is economic suicide to make massive cuts in a weak economy. Instead, our government should be focused on strengthening the economy and creating jobs. Once the economy is on solid footing, both revenue and cuts should accelerate.
That is the recommendation of most economists. Unfortunately, the GOP seems unwilling to accept the advice.
For example, the GOP proposal recommends that eligibility for Medicare be increased to age 67. According to a Kaiser Foundation study, this will save approximately $5.7 billion per year. Unfortunately, the same study estimates that it will also result in $8.2 billion per year in increased costs. Why? Because seniors without health insurance tend to put off surgeries and other medical care until they are eligible for Medicare. The longer they put off treatment, the more expensive the treatment becomes.
At very best, raising the age for eligibility will simply transfer the costs from the government to those who can least afford it. And the Kaiser Foundation study concludes that increasing the age of eligibility will have no affect on the sustainability of Medicare. The only way to fix Medicare is to contain the costs of our out-of-control healthcare system which ranks as the most expensive in the world. The Affordable Care Act is a good start toward that goal.
As for Social Security, it has not contributed one dollar to the deficit or debt. In fact, Congress has repeatedly borrowed money from the trust fund in order to pay for other things.
The reality of the fiscal cliff is that it is entirely manufactured by the Tea Party, Karl Rove and Fox News Channel, along with their wealthy sponsors such as the Koch Brothers, Sheldon Adelson, Peter G. Peterson and corporate-led front groups who are determined to privatize federal programs such as Social Security in order to further line their pockets.