Fiscal Cliff offers, impacts
December 19, 2012 Leave a comment
in graph form from Ezra Klein
Here is impact on debt-to-GDP ratio of most of these deals as compared to current policy, and current law (meaning no change and Jan 1 changes allowed) from CRFB:
So, letting all the changes take place on Jan. 1 will fix the deficit problem, but too fast; it will hurt economic growth. POTUS says we need more short term spending and then move more slowly toward deficit reduction. Republicans say we want more spending cuts, but when it comes to the biggest long term spending problem (health care) they have nothing to offer. Because they have never committed to a plan, or even plans and gone ahead and marked it up and passed it through the house they are left with nothing to bargain with but the things that CBO has scored like increasing Part B premiums on high income persons, etc.
What really blocks a really big deal is the lack of a coherent Republican alternative/approach to health care reform from which they could negotiate and with which the President could bargain. At some point, the elected Republicans (there are various white papers and ideas from Conservatives) are going to have to be for something in health policy. If not, they have nothing to offer on the biggest spending side issue facing our country long term. Keep in mind that it has been 33 months since the ACA was signed into law, and that the Republican party has controlled the House of Representatives for nearly 24 months.