During "silly season", typically in reference to the second half of an election year, we are often treated to an array of buzzwords used to mask policy reform agendas. Most often these words are carefully chosen in blatant attempt to confuse and mislead the public. 2012 is no different, especially with the fragile economic recovery following the "Great Recession", the greatest economic crisis since the 1930s Great Depression.
Fiscal Cliff is a term used in reference to the conundrum the United States economy faces if a deal is not reached by Democrats and Republicans to the expiring temporary payroll tax cuts, the end of the Bush era margin tax cuts and the impending spending cuts planned as part of the debt ceiling deal agreed upon by both parties in 2011. The IMF and other economic agencies have warned economic growth is threatened if a deal cannot be reached by politicians. Although both Presidential prospects haven't offered a clear plan in regards to the impending crisis it seems President Obama will reduce the deficit by allowing planned spending cuts agreed to in 2011 by both sides and increasing taxes on those who make more than $250,000 per year. Presidential contendor Mitt Romney, who often features the popular nation debt clock on the campaign trial, wants to achieve economic growth through 5 trillion dollars in tax cuts and an additional 2 trillion in military spending. As the forth straight year of $1 trillion dollar deficits looms, the political climate appears to be sour for any measures to reduce spending. House Speaker John Boehner is not optimistic on a compromise
“I think that’s difficult to do,” he told Politico. “And frankly, I’m not sure it’s the right thing to do — have a lot of retiring members and defeated members voting on really big bills. That’s probably not the appropriate way to handle the lame duck.”The Grand Bargain is term use to describe the agreement between Democrats and Republicans to reduce the federal deficit and shore up entitlement programs over the next decade. The New York Times reports on the details
The White House agreed to cut at least $250 billion from Medicare in the next 10 years and another $800 billion in the decade after that, in part by raising the eligibility age. The administration had endorsed another $110 billion or so in cuts to Medicaid and other health care programs, with $250 billion more in the second decade. And in a move certain to provoke rebellion in the Democratic ranks, Obama was willing to apply a new, less generous formula for calculating Social Security benefits, which would start in 2015.With the lame duck looming fears in the Democratic ranks have warned of possible cuts in Social Security as part of a post-election deal between both parties. Socialist Senator Bernie Sanders of Vermont warned Obama may be signaling to Republicans that he may attack Social Security and the benefit structure by delaying full benefits for retirees by re-calibrating the mechanism used to calculate the Consumer Price Index (CPI). Top Obama campaign advisor also hinted at the possibility of a bargain on Social Security reform, but would not devuldge many details.
"[T]he approach has to be a balanced one," Axelrod told MSNBC's "Morning Joe." "We've had discussions in the past. And the question is, can you raise the cap some? Right now Social Security cuts off at a lower point. Can you raise the cap so people in the upper incomes are paying a little more into the program? And do you adjust the growth of the program? That's a discussion worth having. But again, we have to approach it in a balanced way. We're not going to cut our way to prosperity. We're not going to cut our way to more secure entitlement programs -- Social Security and Medicare. We have to have a balance."