Often lost in the daily hubbub of the 2012 horse race is the proverbial sword of Damocles hovering over the nation's economy. The CBO sounds the alarm. Again:
The nonpartisan Congressional Budget Office on Wednesday warned the economy will enter a recession next year if the country goes over the so-called fiscal cliff. In its most dire warning yet about the fiscal cliff, the CBO said the economy would contract by 0.5 percent in calendar year 2013 if the George W. Bush-era tax rates expire and automatic spending cuts are implemented. Unemployment also would rise from 8.2 percent in 2012 to 9.1 percent next year, the office estimates ... Under current law, there will be 2 million fewer jobs if the fiscal cliff is allowed to take place, and said most of the contraction is due to the tax increases. The contraction would be very severe in the first half of 2013. CBO sees the economy contracting by 2.9 percent in the first half — deeper than the 1.3 percent negative growth it had seen previously from the fiscal cliff ... CBO says the fiscal cliff will be worse than it had previously projected and that the “underlying strength” of the economy is weaker.
The "fiscal cliff" would instantly raise taxes on all American families, as well as millions of small businesses. It would also implement severe and over-broad defense cuts, which Obama's own Secretary of Defense has likened to the United States military shooting itself "in the head." And it would drag the economy back into recession, shedding millions of jobs along the way. House Republicans have acted to modify the cuts in a more targeted and sensible fashion, and to extend the current tax rates for all taxpayers. Democrats are holding the economy hostage (to use their favorite expression), adamantly refusing to avoid the fiscal cliff unless the plan includes raising taxes on nearly one million small businesses. They brashly claim that they're willing to steer the U.S.S. Tax Hike over our impending economic Niagra Falls, so long as they're able to score some class-warfarealicious political points against Republicans along the way. Such priorities and leadership, no? The White House is spinning the CBO report to demonstrate the "urgent need" for Congress to act. The Republican-held House of Representatives already has acted. The Democrat-controlled Senate, shockingly, has done nothing. Why? Because several Senate Democrats are squeamish about signing on to Obama's tax hikes scheme Perhaps they were actually paying attention when Obama himself made the argument against raising taxes on anyone during a "fragile" economic recovery back in 2010:
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