When the news came out yesterday that senators Harry Reid and Mitch McConnell were being tasked with coming up with an agreement on averting the so-called fiscal cliff many of us held out little hope. With Mitch McConnell as part of the negotiations there were only two options: either no deal at all, or a horrible deal that sought to balance the budget on the backs of the working poor, seniors and children while giving folks like Mitch McConnell a free pass.
Well, now the best thing possible has happened: those talks have broken down.
The New York Times reported:
Negotiations to reach a last-ditch agreement to head off large tax increases and sweeping spending cuts in the new year broke down, at least temporarily, on Sunday after Republicans requested that a deal include a new way of calculating inflation that would lower payments to beneficiaries programs like Social Security and slow their growth.
The president and party leaders in the House and Senate have been seeking a compromise measure that would protect middle-income families from the worst of the tax increases, but there has been no agreement on where to draw the line. With the Bush-era tax cuts expiring, Obama and Democrats have said they want tax rates to rise on incomes over $250,000 a year; Republicans want a higher threshold, at perhaps $400,000.
Another issue dividing Democrats and Republicans is the tax on inherited estates, which currently hits inheritances over $5 million at 35 percent. On Jan. 1, it is scheduled to rise to 55 percent, beginning with inheritances exceeding $1 million.
Democrats seem determined to fight to keep Social Security off the table. After all, it has never contributed a penny to the national debt:
Mr. Reid made clear that Democrats did not intend to include Social Security in any stopgap package. Doing so would make it hard for him to round up votes from his own party, and he has resisted touching Social Security.
"We're not going to have any Social Security cuts," Mr. Reid said on the floor.
So once again I believe that the best thing for America is to go cliff-diving. If we cannot have a deal without giving up our Social Security then we do not need a deal at all. The only thing worse than no deal is a bad deal that punishes the wrong people, yet again, and gives the folks like McConnell who caused all the problems to begin with a free pass.