BY THE SOUND OF THE MEDIA, AMERICA IS ON THE EDGE – STANDING ON WHAT IS BEING CALLED THE FISCAL CLIFF:
NAT SOUND (FOX): “This whole fiscal cliff issue”
NAT SOUND (NBC): “The Fiscal Cliff”
NAT SOUND (CNN): “Going Over the Fiscal Cliff”
THE FISCAL CLIFF IS THE END-OF-THE-YEAR DEADLINE FOR AUTOMATIC BUDGET CUTS ACROSS ALL GOVERNMENT AGENCIES, AS WELL AS INCREASED TAX RATES FOR ALL AMERICANS. THAT WOULD MEAN PUTTING AN END TO THE BUSH-ERA TAX RATES ON THE WEALTHIEST AMERICANS AND ENDING THE PAYROLL TAX CUTS – TOTALING ABOUT $700Â BILLION.
WITH THE CLOCK TICKING, PROGRESSIVE DEMOCRATS OF AMERICA, OR PDA, ARE WAGING A CAMPAIGN TO MAKE SURE THAT LAWMAKERS DON’T MAKE CUTS TO ENTITLEMENT PROGRAMS LIKE SOCIAL SECURITY AND MEDICAID.
THEY SENT IN MORE THAN 70 LETTERS TO MEMBERS OF CONGRESS, EXPRESSING THEIR CONCERNS OVER AUSTERITY MEASURES.
SOT (Tim Carpenter, PDA National Director ): It’s time to protect Social Security. It’s time to roll back the Bush tax cuts. It’s time that we get on with the work to not only help the middle class, but deal with those folks that have been impacted by the severe budget cuts that we’ve already faced. It’s time for a job stimulus. It’s time to put money into the economy, not cut it.
STANDUP (Jessica Desvarieux, Reporter, Real News Network): In Congress, many members are hoping for a grand bargain. That would mean spending cuts, as well as raising revenues. For progressives on the Hill, government cuts aren’t completely off the table, especially when it comes to the defense budget.
SOT (Rep. Jim McGovern, D-MA): Reducing our nuclear arsenal saves billions and billions and billions of dollars. So, you know, we’re in a habit here in Washington where you can’t talk about cutting one penny from the defense because you get accused on being soft on defense. Yet the Pentagon is one of the most inefficiently run agencies in our government. You know, I want a tough defense, but I want a lean defense. You know. And bloat in our defense budget doesn’t provide any security for us. It’s just waste.
MASSACHUSETTS CONGRESSMAN JIM MCGOVERN SAYS THAT HIS FELLOW DEMOCRATS HAVE AN OPPORTUNITY TO MAKE A CASE FOR THE USES OF GOVERNMENT AND WHY AUSTERITY IS THE WRONG PATH, ESPECIALLY DURING A RECESSION.
SOT (Rep. Jim McGovern, D-MA): You do not have to lower people’s standard of living or quality of life to be able to deal with our fiscal challenges. You know, it’s not about austerity. We saw what austerity did in Europe. It’s not the way to go. But it’s about thoughtful, imaginative investments in government and figuring out a way, you know, as we balance the budget, to lift people up. And that’s my hope. That’s what I would like to see happen.
WHAT WILL HAPPEN HAS YET TO BE DETERMINED. BUT MANY OUTSIDE GROUPS ARE TRYING TO PERSUADE THE DIRECTION OF THE CONVERSATION.
THERE IS A STRONG CAMPAIGN BY THE NON-PROFIT FIX THE DEBT, HEADED BY MEMBERS OF THE BIPARTISAN SIMPSON-BOWLES COMMISSION.
ON THEIR WEBSITE, THEY STATE THAT THEY QUOTE “DON’T SUPPORT ANY ONE PLAN IN PARTICULAR,” BUT WHATEVER PLAN THAT MOVES FORWARD SHOULD INCLUDE REFORM TO MEDICARE AND MEDICAID, CHANGES TO SOCIAL SECURITY, AS WELL AS COMPREHENSIVE TAX REFORM. THAT MEANS BROADENING THE TAX BASE, LOWERING TAX RATES, AND RAISING REVENUE.
THIS GROUP HAS A COMBINATION OF LAWMAKERS AND CORPORATE INTERESTS ON ITS BOARD, LIKE CHAIRMAN AND CEO OF HONEYWELL DAVID COTE AND VICE PRESIDENT AND COCHAIRMAN OF JP MORGAN JAMES B. LEE JR.
WALL STREET HAS MADE A PUSH TO IMPACT THE POTENTIAL BUDGET DEAL WITH THIS PLEDGE AND MEDIA APPEARANCES.
AND ON NOVEMBERÂ 19, GOLDMAN SACHS CEO LLOYD BLANKFEIN SAID IN AN INTERVIEW WITH CBS THAT TAXES MUST INCREASE ON THE WEALTHY AMERICANS, BUT CITIZENS MUST ALSO ADJUST THEIR EXPECTATIONS OF SOCIAL PROGRAMS.
BLANKFEIN: You’re going to have to undoubtedly do something to lower people’s expectations–the entitlements and what people think that they’re going to get, because it’s not going to–they’re not going to get it.
PELLEY: Social Security, Medicare, Medicaid?
BLANKFEIN: Some things. And, you know, you could go back and you can look at history of these things, and Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career. So there will be things that, you know, the retirement age has to be changed, maybe some of the benefits have to be affected, maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained.
PELLEY: Because we can’t afford them going forward?
BLANKFEIN: Because we can’t afford them.
BUT CAN WE REALLY AFFORD THEM IN A COUNTRY THAT HAS THE LARGEST GDP IN THE WORLD? THE REAL NEWS SPOKE WITH FORMER FEDERAL BANKING REGULATOR BILL BLACK TO GET HIS TAKE.
SOT ( WILLIAM K. BLACK, ASSOCIATE PROFESSOR, ECONOMICS & LAW – UMKC – Bill Black on 2012-11-26 at 14.13.mov): The last time we had similar levels of debt, we actually had considerably more debt, was in World WarÂ II and after World WarÂ II. And, you know, not only was debt not immoral, it was asolutely the moral and practical thing to do. It’s what got it out of the Great Depression, allowed us to beat the Axis fascist powers, to build up housing stock at an immense rate for the newly formed families, and children, of course, of the baby boom, to build the interstate transportation system of highways, to create the GI Bill, and to establish and greatly expand programs like Social Security.
BUT THE LATEST CNN/ORC INTERNATIONAL SURVEY SHOWS THAT SEVEN OUT OF TEN AMERICANS WANT TO SEE REPUBLICANS AND DEMOCRATS COME TO A COMPROMISE ON FISCAL ISSUES. THOSE IN FAVOR OF BALANCING THE BUDGET ARGUE THAT IF AVERAGE AMERICANS HAVE TO BALANCE THEIR OWN HOUSEHOLD BUDGETS, WHY SHOULDN’T CONGRESS? BILL BLACK SAYS THAT ANALOGY IS FLAWED BECAUSE THE U.S. DOESN’T HAVE A FINITE LIFE EXPECTANCY AND CAN PRINT ITS OWN CURRENCY.
SOT (WILLIAM K. BLACK, ASSOCIATE PROFESSOR, ECONOMICS & LAW – UMKC): Look, the United States has very substantial advantages of being the world’s reserve currency. Right? The dollar is still the basis for most economic transactions. And that’s good for the United States in a bunch of different ways. It’s not essential to our life, we can still be a very wealthy nation without it, but there are advantages. Well, the only way we can be a reserve currency is if we run deficits, ultimately, because we have to kick out the dollars for the rest of the world. The rest of the world understands that, which is, again, why we can borrow money at virtually zero rate of interest.
PRESIDENT OBAMA PLANS TO TAKE HIS MESSAGE ON THE ROAD THIS WEEK. HE HOPES TO PERSUADE AMERICANS TO PRESSURE CONGRESSIONAL LEADERS TO SUPPORT HIS AGENDA OF ENDING BUSH TAX CUTS ON THE WEALTHY AND EXTENDING PAYROLL TAX CUTS FOR HOUSEHOLDS EARNING LESS THAN $250,000 A YEAR.
ALTHOUGH TALKS ABOUT CUTS TO SOCIAL SECURITY HAVE BEEN RULED OUT, ACCORDING TO WHITE HOUSE PRESS SECRETARY JAY CARNEY, MEDICARE AND MEDICAID ARE STILL ON THE TABLE.
JAY CARNEY, WHITE HOUSE PRESS SECRETARY: Social Security is not currently a driver of the deficit. That’s an economic fact. And while the president supports engaging with Congress on a separate track to strengthen Social Securiy for the long term, we need toâ€”when it comes to entitlements, we need to look at Medicare and Medicaid, as we have already.
BUT FOR BLACK, HE SEES THIS PUSH FOR COMPROMISE AND DEALING WITH SOCIAL SECURITY ON A SEPARATE TRACK COULD BE SETTING THE STAGE FOR CORPORATIONS PRIVATIZING SOCIAL PROGRAMS.
SOT ( BILL BLACK, ASSOCIATE PROFESSOR, ECONOMICS & LAW – UMKC): He will have given away the store, and he will have provided the political cover that Wall Street needs to be able to ,in subsequent presidencies, Republican and Democrat, further erode the safety net and eventually privatize Social Security. So just as only a conservative Republican can go to what was then called Red Chinaâ€”that was Nixonâ€”so too can only a Democratic president open up the safety net to being unraveled.
AN OPENING THAT PROGRESSIVES ON THE HILL WANT TO REMIND THE PRESIDENT TO KEEP CLOSED.
FOR THE REAL NEWS NETWORK, JESSICA DESVARIEUX, WASHINGTON.