Enough talk, feinting, cajoling, campaigning and threats have passed from lawmakers through the media on the fiscal cliff to have convinced me that we're headed over the edge come the end of the year. While I would cheer a grand bargain and some recognition of the recent election outcome and the fiscal mandate that it brought, I'm not living a dream. We know that three years of intransigence and gridlock aren't likely to be broken in the next two weeks.
So I say let's go over -- let's crank this bus up to 100 mph and point the Cadillac towards the edge of the abyss Thelma and Louise style. It might not be as bad as much of the media hype would have you believe. While I don't doubt the Congressional Budget Office projections of negative 2 percent GDP growth and recession, unemployment increases and other safety net cuts, there are plenty of things to really like about the fiscal cliff if you're a Democrat -- or even a fiscal conservative.
First and foremost, we'll get a full repeal of all the Bush tax cuts. We'll get back to the marginal tax rates that we saw under Clinton through 2000, not a bad period of economic growth. The president won't have to make a case for increased taxes on the wealthy, an argument that Republicans in Congress can't possibly vote for under any circumstances, he'll just get that increase automatically. And he can push a new tax cut bill almost immediately after the new Congress is inaugurated, targeting lower-income workers in any way he chooses. There will be a widening in the Alternative Minimum Tax (AMT) an increase in capital gains taxes and an increase in the estate tax, all hitting upper income and wealthier people.
And in the sequester, the forced spending cuts, there is also much to embrace. Here's the most important reduction you're going to like if you're a liberal: more than half a TRILLION dollars in military cuts over the next 10 years. This is a budget cut that even Democrats are afraid to ask for and is clearly the most despicable for the Republicans to imagine. It is forgotten that almost half of our budget is connected in some way to military spending. It's always politically difficult to attach military spending when discussing budget cuts but the sequester avoids the political challenge by attacking them automatically.
Are there downsides for Democrats? Many -- there is a payroll tax increase, there are unemployment benefits that will be lost, there are mortgage relief benefits that will be lost, and there are childcare benefits at risk. But many of these can be proposed back as emergency measures after January 20, when they will be difficult for even a Republican Congress to oppose.
This is the wrong moment for an economic austerity program, which is what the fiscal cliff really is. But a deal, as Speaker Boehner characterizes it, "is nowhere."
Ok, if we're really nowhere, its time to measure whether there's more media hype than real Armageddon in the rhetoric. I say let's embrace the cliff.