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Tue Dec 11, 2012, 09:46 AM

The Real Victims of the "Fiscal Cliff": The Unemployed

Forgotten for the most part in this Fiscal Cliff battle is that Unemployment ends for anyone on an extension on Dec. 29th unless the Federal Government passes another extension. No way in hell are Republicans going to let that pass the House unless they get what they want out of the Fiscal Cliff negotiations. For millions of people, they are going to be cut off before the New Year with no income.

This is why the whole "We Won! Screw Them!" scenario doesn't work. Yes, if taxes alone were the issue, we could go over the cliff. I'm sure many of you and many in the middle class understand absorbing a relatively modest tax hike will mean larger tax increases to those who have not paid their fair share and what effect that has on the economy. So yes, going over the cliff is not a bad move in that sense.

However it means that Unemployment ends for a TON of people dependent on it and there aren't jobs just sitting there waiting to snatch people off the UE rolls just for the hell of it. This is going to hurt a LOT of people and the GOP knows it. It's the not talked about part of these negotiations and why they do still have us (or the compassionate amongst us) over a barrel.

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Reply The Real Victims of the "Fiscal Cliff": The Unemployed (Original post)
MessiahRp Dec 2012 OP
gollygee Dec 2012 #1
MessiahRp Dec 2012 #2
gollygee Dec 2012 #3
Egalitarian Thug Dec 2012 #4
ProSense Dec 2012 #5

Response to MessiahRp (Original post)

Tue Dec 11, 2012, 09:53 AM

1. I don't think anyone thinks the so-called "fiscal cliff" is a good thing

Just that it's better than anything the Republicans would ever suggest.

I would not personally be willing to continue the tax cuts for the rich and dismantle the social safety net and put tons of people in the street hungry in order to extend unemployment benefits, even if the Republicans had suggested that as a compromise - which they wouldn't as they are only concerned about taxes on the rich and hurting the poor. They don't like continued unemployment either. I think our best position is to wait until January and compromise then, and things can be set up retroactively, including unemployment.

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Response to gollygee (Reply #1)

Tue Dec 11, 2012, 09:59 AM

2. How retroactive? When people are out of their homes because they can't pay rent?

When utilities like heat are shut off because they can't pay that bill? When people go hungry because they can't afford food. UE isn't extra bonus money, it's a fraction of your previous salary replacing said salary so that you can SURVIVE.

And yes I have seen a TON of posts here talking gleefully about going over the fiscal cliff while ignoring how that would affect UE negotiations.

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Response to MessiahRp (Reply #2)

Tue Dec 11, 2012, 10:03 AM

3. It isn't glee - it's people being obstinate

Like sticking their tongues out at the Republicans and saying, "You aren't the boss of me!"

The Republicans don't want to bargain -they want everything they want with no real compromise at all. You won't see UE benefits from them anyway. It's a case of having the Republicans cut off the extended UE benefits altogether, or the Democrats waiting until they're in a stronger position and protecting things like the social safety net, which UE is part of.

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Response to MessiahRp (Original post)

Tue Dec 11, 2012, 10:07 AM

4. You're right and that's exactly why it is important for the politicians to own it.


As many people as there are on the federal UI extension, there are already many times that number with nothing. This nation is in a crisis and, as much as we like to pretend otherwise, it has been for years.

Forcing politicians to do their jobs is the only way to stop it. Another bad deal where we make the problem worse to gain a few more months of relief for a relatively few people is not a solution, it is cover for those that have failed to do their jobs.

We need the higher taxes, we really need the inheritance tax, and we need to address the runaway military budget. None of that will happen without the urgency this will cause.

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Response to MessiahRp (Original post)

Tue Dec 11, 2012, 10:17 AM

5. Republicans have a problem

No, Dems don't need to compromise up front

By Greg Sargent

Yesterday, Republicans reacted with outrage when the White House offered an opening bid loaded with Democratic priorities -- $1.6 trillion in new tax revenues, an extension of unemployment insurance, and more stimulus spending. Though Dems offered $400 billion in Medicare cuts, what angered Republicans was that Dems didn't suggest greater spending cuts -- they didn't volunteer big concessions up front -- leading Republicans to dismiss the offer as "unserious."

The basic problem for Republicans here is that Democrats don't have to offer big concessions up front. This is true because of basic common sense -- if Republicans say no deal is possible without "serious" spending cuts, they need to tell us what spending cuts they consider "serious," or the talks can't go anywhere. (It's striking that some pundits are ignoring this basic reality and playing along with GOP claims.) But it's also true because of the uniqueness of this set of negotiations -- specifically, if we do nothing, Democrats will get their way. All the tax cuts will expire, and Dems can come back and push a new tax cut just for the middle class -- a circumstance that will only increase the Dems' leverage further.

This has created a fundamentally unbalanced situation. If we do nothing, the fate of the tax rates for the middle class will automatically become "decoupled" from the fate of tax rates for the rich. Dems want that to happen. Republicans, by contrast, want the fate of the two sets of tax rates to remain bound together as one. This has created an awkward situation that some conservatives will cop to and others won't. Some, like GOP Rep. Tom Cole and a growing number of Republicans, willingly admit that the current situation is lost and that Dems have much of the leverage here. Others are in denial about this -- as Matt Lewis writes, conservatives who think Republicans have the leverage are guilty of "the same kind of happy thinking that led some to boldly predict a Romney victory."

Worse for Republicans, Obama has a simple way to exacerbate the fundamental imbalance of the situation. He can continue to call on Republicans to extend just the middle class tax cuts, since everyone agrees on extending those -- and claim we can resolve the point of disagreement over the tax rates on the rich later. This forces Republicans to say No to this (because they need the two to remain tied together), further unmasking just how a high priority they place on keeping taxes low on the rich -- they are willing to create uncertainty for millions of middle class families to achieve it.

- more -


Republicans have no leverage, and Democrats' hand will be strengthened on January 1.

Besides polls showing that Americans would blame Republicans, the President made a very high-profile and sensible proposal (http://www.democraticunderground.com/10021914963). He also supports the already passed Senate bill.

Boehner has three choices:

1) Accept the President's proposal with "dividends to be taxed as ordinary income" and the "estate tax to be levied at 45 percent on inheritances over $3.5 million."

2) Pass the Senate bill, "which currently taxes inheritances over $5 million at 35 percent," but excludes Obama's dividend proposal.

3) Go over the cliff when "the estate tax is scheduled to rise to 55 percent beginning with inheritances exceeding $1 million."

In each case, the tax cuts for the rich end.

Unemployment benefits can be negotiated separately. This is not the same situation as the end of 2010 when extended benefits were a big issue. Republicans are boxed in on the tax cuts.

Are talks between Obama and Boehner already breaking down?

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