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December 12, 2012
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A Hoax by Politicians and Corporations
Don’t believe
the cliff hype
by
P eter H art
T he b ig g est
story in W ash
ington, D.C., is
about something
that doesn't really
e x ist: the so-
called fiscal cliff.
T his m an u fac
tured panic is all about politicians
and corporate interests getting
things they w ant— things that don't
have much to do with the crisis
anyway. But instead of challenging
this spin, big media outlets are play
ing along.
So what's the not-really-a-cliff
anyway? It's a number of things that
are set to happen all at once starting
in January. On the one hand, there
are budget cuts, more or less equally
divided between military and do
mestic spending. The threat of those
cuts was supposed to force Con
gress to reach a deal last year. It
didn't.
Add in the expiration of the Bush-
era tax cuts and a temporary cut in
the Social Security payroll tax and it
starts to really add up. That's what's
causing these breathless TV reports
telling you that if Congress and the
White House don't act in the next
few weeks, the average family’s
tax bill will go up an astonishing
$3,500.
Astonishing, sure. And if it all
happened, the country would very
likely be thrown into another re
cession. But will it happen?That's
extremely unlikely. And is it really
a cliff? Absolutely not.
A cliff, literally speaking, isn't
something you can fall off only a
little bit. But this tax and spending
problem could go right into January
without much disruption for tax
payers or the economy. And there
are plenty of ways to make sure that
most Americans won't see a mas
sive tax increase. Those scary num
bers you're hearing rest on the as
sumption that no deal is reached for
the entire year.
So why call it a cliff then?To make
it seem like an immediate response is
essential. There are powerful inter
ests looking to use a crisis to push
for policy changes that have noth
ing to do with the current problem.
So you might turn on the TV and
hear the millionaire CEO of a major
corporation say the cliff is really
about the “need” to cut the eamed-
benefit programs Social Security
and Medicare.
Oh, they don't call them cuts —
they prefer to talk about “reforming
our entitlem ent program s.” But
they're talking about cuts that aren't
a required part of what it will take to
get the country's fiscal house in
order.
Social Security and Medicare
spending isn’t, in fact, what's caus
ing the fiscal problems we're told
must be solved.
And the fact that some o f these
CEOs are the same W all Street
wizards who played a key role in
creating the housing crisis and
the Great Recession, which actu
ally did cause fiscal woes by de
pressing tax revenue at the local,
state and federal levels, doesn't
come up. W e're supposed to see
them as responsible stew ards of
the econom y.
Cutting Medicare is the part of
the plan these austerity-loving chief
executives are happy to talk about
on TV. ”The big nut is going to have
to be M e d ic a re /M e d ic a id ,”
Honeywell CEO David Cote said in
a CBS-broadcast interview. “At the
end of the day, you can't avoid the
topic.”
But that's not all they have in
mind. Wouldn't you know it, their
prescription for the country's debt
problem calls for an array of tax
breaks for corporations.
In other words, these CEOs are
aim ing for tax breaks for them
selves, at the expense o f Social
Security and M edicare. They're
putting two o f the country's most
effective and popular social pro
grams arbitrarily at risk, under the
guise o f shrinking the federal bud
get deficit.
If journalism is to do us any good
at all, the major media must expose
this selfish agenda.
While a few skeptical reports
have begun to appear in The Wash
ington Post, New York Magazine,
and on CNN, just about everywhere
you turn you find stories about the
dreaded but dubious fiscal cliff.
Don't believe the hype.
Peter Hart is the activism direc
tor o f Fairness & Accuracy in Re
porting.