18 December 2012

Substance and symbolism in the fiscal-cliff debate

The President is keeping pressure on House Republicans, rejecting the Speaker's latest compromise offer to avert the dreaded "fiscal cliff." Rep. Boehner made a significant concession and a clever rhetorical move by proposing a "millionaires' tax." How could Obama turn down something like that? Easily, it seems. As I understand it, Boehner is now willing to see tax rates go up for millionaires, but Obama insists that the line must be drawn lower, wanting the rate raised for $400,000 and up. That, too, is a compromise, since Democrats had previously called for higher rates to begin at $250,000. Boehner's offer, which Obama has already dismissed, sets a kind of trap because it leaves Democrats pushing for higher taxes for "less wealthy" people, while the average observer can more easily accept "millionaire" as the definition of a rich person who can stand more taxes. The lines are drawn now in a way that may incline people to view those in the $250,000 - $999,999 group as a "middle class. While ideological Republicans are probably furious with Boehner for proposing a millionaires' tax, the real base of the party, the biggest donors notwithstanding, probably falls within the income bracket Boehner would protect and Obama would tax more.

How should the rest of us feel about it? I suppose many Americans may be happy to see anyone wealthier than they taxed more, but it remains reasonable to ask whether the country can tax its way out of deficits and debt, and whether there's a significant difference from the standpoint of debt and deficit between the Obama and Boehner proposals. The Republicans have been saying all along that the real fight is over cuts, particularly cuts to "entitlements," an area where they accuse Obama and the Democrats of refusing to budge. The President has proposed cuts, but just as he has dismissed Boehner's tax proposals as inadequate, Boehner says the same of Obama's cuts. It seems as if Obama would rather fight over taxes than over cuts. To an extent this is an ideological fight. If we concede that we can't tax our way out of debt, than we can assume that the President wants to make a point about wealth's obligation to the common good. The idea isn't that these higher taxes will fix the deficit, but that the wealthy, now defined as those with $400,000 or up, have a responsibility to the nation and its people to maintain a civilized standard of living. The core question is what exactly we owe to each other. Those who want more cuts tend to minimize the obligation, preferring "personal responsibility" and decrying "dependence." A philosophical argument can be made against the "small-d" democratic pretense of dictating the standard of living a society wants, but at the same time we can ask why else any nation exists but to keep its people alive. The Republicans will (or can be expected to) insist that the stakes for individuals and families are not as grave as Democrats imply, but I'd be more impressed with their arguments if they were addressed to and responsive to the people most likely to be affected by cuts. When Republicans show the courage to take their case to "blue" America and swallow their pride enough to make (to them superfluous) assurances that they won't let anyone starve under austerity, I'll be more impressed by their supposed willingness to compromise. Meanwhile, many more cuts could probably be made to the military than either major party contemplates. It may be true that more is spent on "entitlements" than on defense, but it's also true that a lot of deficit could be done away with by renouncing global hegemony and challenging the rest of the world to coexist responsibly.

Of course, if negotiations fail, taxes will go up and cuts will be made automatically, including to the military. But this is to be avoided, we are told, because it will spook the private sector and either stall the recovery or reverse it. That's why the deadline is called a "cliff." I assume this was all designed for a reason, however, and we see the reason before us. If we go over the "cliff," rich and poor and military alike are supposed to feel "pain." The current negotiations are designed to minimize "pain" for some groups, but no one, as far as I can tell, is proposing to minimize it for everyone. People are still fighting over principles, it seems, when pragmatism is called for. One can only hope that, if the country goes over this "cliff," the two-party system might finally go over with it.

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