Inside Opinion

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Tag: fiscal cliff

Jan.
2nd

A budget deal that solves exactly nothing

This editorial will appear in Thursday’s print edition.

Talk about setting the bar low. Congressional leaders are congratulating themselves for canceling a disaster they scheduled themselves. In fact, they didn’t even cancel it – they just rescheduled it.

Such is the absence of statesmanship revealed by the pathetic deal that averted the so-called fiscal cliff.

Much of the cliff – a set of mindless spending cuts set to take effect on New Year’s Day – had been engineered by Congress itself last year to force bipartisan agreement on a rational fiscal alternative. The sequestration plan was so bad, the thinking went, that it would terrify both Republicans and Democrats into doing something helpful.

No such luck. Sequestration turned into a game of chicken, with people in each party looking for a way to stick the blame on the other if the scheme’s failure spooked the markets. A slew of expiring tax breaks raised the stakes further: Most taxpayers stood to lose thousands of dollars without congressional action, sucking life out of an economy chiefly driven by consumer spending.

The slapdash misery of a deal that ultimately postponed the reckoning is no credit to anyone.

It gives the wealthiest 1 percent of Americans a haircut, ratcheting up their highest tax rate from 35 to 39.6 percent. That will produce some revenue, but – contrary to populist rhetoric – it isn’t remotely enough to patch Congress’ ruinous $1 trillion deficits.

Now that Democrats have scored their victory over people earning more than $400,000 – the political easy pickings – heaven help them if they suggest more Americans ought to pitch in for the sake of national solvency.

The deal also does nothing to curtail unsustainable entitlement spending; it again shows that Congress, collectively, can’t bring itself to require sacrifices from America’s middle class.

No one is pretending that this is a solution; leaders declared it an achievement merely because wasn’t a disaster. Sequestration wasn’t repealed; it was put off a couple months. The Republican House still plans to use the statutory debt limit as a nuclear weapon in budget negotiations, as it did in 2011.

What’s especially discouraging is the timing.
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Dec.
25th

Will the Republican House please join this government?

This editorial will appear in Thursday’s print edition.

In Congress, America needs a rational, functional Republican Party. As the fiscal cliff dispute is demonstrating, it doesn’t have one.

For years now, the bickering over the nation’s dangerous deficits has revolved around whether to keep Bush-era tax cuts in place for everyone – the official Republican position – or let them expire only for the wealthiest Americans, as most Democrats favor.

Marginal tax rates for the rich are only part of the nation’s overall deficit problem, but you’d never know it from the noise emanating from the capital. House Republicans and President Obama can’t agree on that question, so they haven’t been able to move on to other necessary action – including averting the “fiscal cliff” that threatens the economy if a slew of tax breaks all expire at once.

Many economists believe America’s increasingly healthy economy would be thrown into recession without at least a short-term budget deal. One number illustrates the threat: According to the respected Tax Policy Center, middle-class households with incomes running from $50,000 to $75,000 would see their taxes jump $2,399 next year, a severe loss of spending power.

Under sequestration – the mutual-assured-destruction pact Republicans and Democrats signed last year – the economy will also be slammed by a barrage of harsh spending cuts. The theory behind sequestration was that the cuts would be so intolerable to everyone, Congress would be forced to do something.

The Republican House majority has now done something. It has collapsed.

A deal appeared in the offing earlier this month. Obama had offered to let the tax cuts expire for Americans with incomes exceeding $400,000 a year (the earlier Democratic talking point had called for $250,000). Majority Leader Boehner countered with an offer to allow the increase to fall on people with incomes exceeding $1 million.

Both positions were drenched with partisan maneuvering and cynical calculation. But they were offers, and thus might have led to counter-offers.
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Dec.
20th

Apocalypse now? And miss out on the fiscal cliff?

This editorial will appear in Friday’s print edition.

So far, so good.

If you’re reading this on Friday, it means the Mayan Apocalypse has not come to pass – yet. But the day is young. There’s still time for the Earth’s magnetic field to flip, a supervolcano to erupt or the hitherto invisible planet Nibiru to collide with ours.

We’re going out on a limb and assume that if nothing’s happened by now, we’re likely home-free.

Most people undoubtedly will be glad that this isn’t their last day. But we suspect some are starting to get a little antsy about now, like the guy who figured he didn’t have to go Christmas shopping with the world ending and all, or the woman who maxxed out all her credit cards because she’d never have to pay them off, right? Welcome to your low, low credit rating, ma’am.
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Nov.
24th

The post-election opening for a balanced deficit deal

This editorial will appear in Sunday’s print edition.

Because Democrats and Republicans couldn’t make a real deficit deal last year, they made a deal so bad they’d have to come back to the table this year. That was the theory, anyway.

The bad deal now stares us in the face. Unless Congress and the president do something by January, $1 trillion of guillotine blades will automatically fall on domestic programs Democrats love and defense programs Republicans love. (There’s crossover love on both sides, of course.)

Combined with the simultaneous expiration of various tax breaks, especially the Bush tax cuts of

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