A Christmas Carol

For Your Consideration

Alan CheahDecember 20, 2012 

'Tis the season to be jolly, fa la la la la la la la la . Will there be a budget for the benefit of the many without catering to the few? Will there be cause for joy? It is highly unlikely we will see a budget that resolves the fake fiscal cliff. The only thing we may see under the Christmas tree is the extension of the Bush tax cuts for 98% of Americans. That would be Obama's Christmas gift.

If you consider justice to be a gift, then Romney was right. Obama got elected because he promised to give us gifts. But it was not just to those who voted for him but also to those who didn't because he is the president of all Americans. If that makes Obama Santa what does it make Mitch McConnell and John Boehner who, as of this writing, is preventing Santa from descending the chimney -- Scrooge?

The two Scrooges are acting out Ebenezer's Christmas past in the present. Just as Ebenezer finally relented and gave his clerk, Bob Cratchit, Christmas day off with pay, perhaps the two Scrooges will allow Santa to deliver the gift or should I say justice for the middle class.

In the Ghost of Christmas Past, we learn that Ebenezer's behavior was heavily influenced by his father. In much the same way it seems House Speaker John Boehner's actions are more that of the Tea Party, the Koch brothers, Shel Adelson and the like than himself. As for Mitch McConnell, I don't see much redeeming value. Apparently, in his own state of Kentucky, McConnell could only muster a 37% approval rating.

After Christmas, the 'fiscal cliff' remains to be resolved. Obama wants $1.4 trillion tax increase conceding $600 billion in spending cuts. Boehner and Republicans are conceding $800 billion in raising tax revenue but demand $1.4 trillion in spending cuts claiming government has a spending problem.

Consider this. Your wage increases by 5%, if at all, annually, but your rent, health insurance, food, auto insurance, gas, utilities, and prescription drugs cost considerably more. You put the added costs on your credit card. Do you have a spending problem? No. You have a cost problem. A spending problem is when you spend beyond your means for that which is unnecessary. Is Medicare unnecessary? Is Medicaid unnecessary? Is Social Security unnecessary? Similarly, on these issues, government does not have a spending problem as Republicans like to characterize. Government has a cost problem.

Republicans want to increase the Medicare and Social Security age to 67 or above; voucherize and means test Medicare; privatize Social Security and cut COLA. Cutting spending on necessities for two years don't make the necessities go away. Seniors still require those services. The Republican solution only makes seniors pay it out of pocket and if they can't, makes their children pay. If Republicans are genuinely concerned about passing on debt, isn't that exactly what they are doing with this proposal?

An ideal bargain would be to give Obama his $1.4 trillion in tax increases and Boehner his $1.4 trillion in spending reduction and doing it painlessly. Can this be done? Yes.

Majority of Americans already agree that the minimal raise in taxes on the top 2% is fair and won't hurt them. Now how do we reduce spending painlessly? Obama already demonstrated that in Obamacare when he cut $716 billion dollars of waste and fraud from Medicare without cutting benefits. According to the Wall Street Journal, Aug 12. 2009, "...spending during the last year of life accounted for 27.4% of total Medicare spending, the report found." In 2011, the Medicare budget was $835 billion. 27.4% of that would be a savings of $230 billion a year or $2.3 trillion over ten years. Allowing Medicare to negotiate for lower drug prices would save $156 billion.

Smart Defense spending would cut Defense costs by $1.4 trillion over ten years (search "Budget Bullets: Defense"). The grand total in spending reduction is $3.856 trillion, well above the $1.4 trillion demanded by Republicans.

There are numerous more cost cutting and efficiency measures. These combined with modest tax increases on the 2% will wipe out the debt in no time. So why don't the two Scrooges entertain these cost cutting measures instead - because cutting costs means cutting into the bottom line of companies and the rich that profit from high costs. We can only hope McConnell and Boehner will have their epiphany as Ebenezer did.

Who's looking out for whom?

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