Fiscal cliff: 8 principles for Democrats
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Robert Reich Guest blogger
Democrats, here are eight principles to guide you in the coming showdown over the fiscal cliff:
ONE: HOLD YOUR GROUND. The wealthy have to pay their fair share of taxes. That鈥檚 what the election was all about, and we won. It鈥檚 only fair they pay more. They鈥檙e taking home record share of national income and wealth, and have lowest effective tax rate in living memory.
TWO: NO DEAL IS BETTER THAN A BAD DEAL. You鈥檙e in a strong bargaining position. If you do nothing, the Bush tax cuts automatically expire in January, and we go back to rates during Clinton administration. Which isn鈥檛 such a bad thing. As I recall we had a pretty good economy during the Clinton years.
THREE: MAKE REPUBLICANS VOTE ON EXTENDING THE TAX CUTS JUST FOR THE MIDDLE CLASS. After all the Bush tax cuts expire, have Republicans vote on an extending the Bush tax cut just for the middle-class. If they refuse and try to hold those tax cuts hostage to tax cuts for the wealthy, it will show whose side they鈥檙e on. They鈥檒l pay the price in 2014.聽
FOUR: DEMAND HIGHER TAX RATES ON WEALTHY, NOT JUST LIMITS ON DEDUCTIONS. Don鈥檛 fall for Republican offers to limit some tax deductions on the wealthy.聽聽Demand we go back to higher tax rates on the wealthy and eliminate their unfair tax loopholes, so they truly start paying their fair share.
FIVE: DON鈥橳 CUT SAFETY NETS. Don鈥檛 sacrifice Medicare or Social Security, or programs for the poor. Americans depend on these safety nets and can鈥檛 afford any benefit cuts.
SIX: DON鈥橳 CUT INVESTMENTS IN OUR FUTURE PRODUCTIVITY. Education, basic R&D, and infrastructure aren鈥檛 spending; they鈥檙e investments in our future prosperity. If the return on these investments is greater than the cost, they ought to be made, period.
SEVEN: CUT SPENDING ON MILITARY AND CORPORATE WELFARE. You want to cut, cut spending on the military 鈥� which now exceeds the military spending of the next 13 largest military spenders in the world combined. And cut corporate welfare 鈥� support to agribusiness, oil and gas, Big Pharma, big insurance, and Wall Street.
EIGHT: PUT JOBS BEFORE DEFICIT REDUCTION. Finally, Don鈥檛 cut the budget deficit as long as unemployment remains high. Otherwise you鈥檒l cause the economy to contract, making the deficit even larger in proportion. That鈥檚 the austerity trap Europe has fallen into. We need to create American prosperity, not European austerity.
Remember: Jobs come first.
