10 Things Republicans Don't Want You to Know About the "Fiscal Cliff"
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"People who aren't wealthy, who may have built up value in land over generations and many family farms find themselves in situations where they've got to sell the farm in order the pay the taxes."
Sadly for conservative myth-makers, that claim, too, is completely false.
In 2990, that tax was paid by less than a quarter of one percent of American estates each year. Despite Republican mythology to the contrary, the Tax Policy Center reported that fewer than 2,700 family farms and businesses owed the tax to Uncle Sam three years ago. But thanks to successful Republican brinksmanship, the December 2010 tax cut compromise lowered the rate from 45 percent to 35 percent while boosting the estate tax exemption to $10 million per couple, dropping the number of families impacted to just 40 a year.
In 2002, Vice President Dick Cheney famously declared, "Reagan proved deficits don't matter." At least, not if a Republican is in the White House. After all, while Ronald Reagan tripled the national debt during his eight years in office, George W. Bush nearly doubled it again. Nevertheless, Speaker Boehner hasn't merely claimed "We have a debt burden that's crushing us," but once again promised to hold the debt ceiling hostage unless the GOP budget blackmail succeeds.
Like its stonewalling of President Obama's judicial nominations and record-setting use of the filibuster, the GOP's debt ceiling brinksmanship was unprecedented. After all, that small government icon Ronald Reagan tripled the national debt and signed 17 debt ceiling increases into law. That might explain why the Gipper repeatedly demanded Congress boost his borrowing authority and called the oceans of red ink he bequeathed to America his greatest regret. As it turns out, Republican majorities voted seven times to raise the debt ceiling under President Bush and the current GOP leadership team voted a combined 19 times to bump the debt limit $4 trillion during his tenure. (That vote tally included a "clean" debt ceiling increase in 2004, backed by 98 current House Republicans and 31 sitting GOP Senators.)
Of course, they had to. After all, the two unfunded wars in Afghanistan and Iraq, the budget-busting Bush tax cuts of 2001 and 2003 (the first war-time tax cut in modern U.S. history) and the Medicare prescription drug program drained the U.S. Treasury and doubled the national debt by 2009. And Mitch McConnell, John Boehner and Eric Cantor voted for all of it. As these helpful charts from the New York Times and the Washington Postshow, they built that debt:
On January 1, 2013, the U.S. economy will theoretically be hit by a triple whammy of the expiring Bush tax cuts, the end of the two-year payroll tax deduction and the first year of $1.2 trillion in spending cuts Congressed blessed in the 2011. Over time, the pain would be very real: the CBO estimates that the combination of spending cuts and tax increases could reduce gross domestic product by 2.9 percent and drive the unemployment rate from 7.9 percent today to 9.1 percent by the end of next year. (That Uncle Sam's annual budget deficits would be dramatically reduced has largely escaped the notice of the press and the public.)
But the "fiscal cliff" analogy itself is doubly-inappropriate. After all, Congress and the Obama administration can take action any time before or after December 31, 2012 to avoid the new recession inaction would likely produce. (That's an important reason why, as the Washington Post reported Wednesday, "'Fiscal cliff' warnings yet to faze Wall Street.") And while former Fed vice chairman Alan Blinder and others warn about the economic disruption the uncertainty of a resolution alone could produce, this year-end budget showdown pales in comparison to the real cliff that was 2011's debt-ceiling crisis. That summer, the unprecedented GOP threatto default on the full faith and credit of the United States stalled job growth and undermined consumer confidence for months.