Share on Google Plus Share on Twitter Share on Facebook 3 Share on LinkedIn Share on PInterest Share on Fark! Share on Reddit Share on StumbleUpon Tell A Friend 1 (4 Shares)  
Printer Friendly Page Save As Favorite View Favorites View Stats   2 comments

OpEdNews Op Eds

What is the "fiscal cliff"?

By (about the author)     Permalink       (Page 2 of 2 pages)
Related Topic(s): ; ; ; ; ; ; ; ; ; , Add Tags Add to My Group(s)

Must Read 1   Supported 1   Valuable 1  
View Ratings | Rate It

opednews.com Headlined to H3 11/14/12

- Advertisement -

These include $50 billion in delayed impact from the initial round of cuts and $78 billion more in the so-called "sequester."

Expiration of payroll tax cut--$115 billion

The payroll tax that underwrites Social Security and Medicare was temporarily cut from 6.2 percent to 3.1 percent in December 2010, and that cut was extended through the end of this year in February 2012. The expiration of this tax cut will be felt as a 3.1 percent reduction in income for low- and middle-income families, more than the typical pay increase. It will mean a significant drop in real income.

Expiration of extended unemployment benefits--$39 billion

These benefits were coupled to the payroll tax cut as "stimulus" measures in both the December 2010 and February 2012 bipartisan agreements, but in the second deal the Democrats accepted a Republican demand to reduce the duration of extended benefits from 99 weeks to the current 73 weeks for the hardest-hit states, and from 93 weeks to only 63 weeks for most states.

Now, even this inadequate level of benefits for the long-term unemployed is set to end, under conditions where more than five million workers have been out of work for six months or longer. One million long-term unemployed workers who have exhausted all state benefits will lose their extended federal benefits January 1, and a further one million will lose benefits in the first quarter of 2013.

Expansion of the Alternative Minimum Tax--$114 billion

The AMT, first enacted in the 1960s as a measure against tax evasion by the super-rich, was never indexed for inflation, so tens of millions of upper-middle-income families could now come under its provisions. Congress has repeatedly adopted temporary "fixes" to delay imposition of the tax, most recently in December 2010, limited to taxes on 2011 income.

If another "fix" is not adopted, or the AMT is not fully indexed for inflation retroactively, the number of families required to pay the AMT will rise from four million to 30 million next year, sharply increasing the tax bills these families will pay for income earned in 2012.

- Advertisement -

Expiration of miscellaneous tax provisions--$120 billion

As many as 80 provisions of the 2009 stimulus legislation introduced by the Obama administration and enacted by a Democratic-controlled Congress, or adopted in subsequent deals in December 2010 and February 2012, have either expired this year or will expire January 1. Most of these are incentives to business -- $109 billion -- while a small fraction, about $11 billion, represents tax credits or expanded deductions for working families.

Mandated cuts in Medicare reimbursement--$14 billion

The 1997 Balanced Budget Act, negotiated by the Clinton administration and then-House Speaker Newt Gingrich, established what was titled the Medicare sustainable growth rate, or SGR, to restrain the growth of payments to health-care providers under Medicare. The SGR provision has never actually been put into practice, as pressure from hospitals and the American Medical Association has induced Congress to enact repeated versions of one-time provisions known in Washington jargon as the "doc fix."

The most recent versions were incorporated into the December 2010 and February 2012 bipartisan agreements under the Obama administration. The latest one expires on January 1, 2013. If the much lower ceiling is imposed, with Medicare reimbursement cut by 27 percent, many doctors and hospitals may stop accepting new Medicare patients and even phase out treating current patients.

- Advertisement -

Next Page  1  |  2

 

Patrick Martin writes for the World Socialist Website (wsws.org), a forum for socialist ideas & analysis & published by the International Committee of the Fourth International (ICFI).

Share on Google Plus Submit to Twitter Add this Page to Facebook! Share on LinkedIn Pin It! Add this Page to Fark! Submit to Reddit Submit to Stumble Upon


Go To Commenting

The views expressed in this article are the sole responsibility of the author and do not necessarily reflect those of this website or its editors.

Writers Guidelines

Contact Author Contact Editor View Authors' Articles
- Advertisement -

Most Popular Articles by this Author:     (View All Most Popular Articles by this Author)

The Low-wage, No-raise Economy

US House of Representatives votes to abolish Medicare

Nearly One Million US Workers Cut Off Unemployment Benefits

Obama hails deal to impose record cuts in social spending

US House of Representatives approves plan to destroy Medicare, Medicaid and food stamps

One in seven Americans now living in poverty

Comments

The time limit for entering new comments on this article has expired.

This limit can be removed. Our paid membership program is designed to give you many benefits, such as removing this time limit. To learn more, please click here.

Comments: Expand   Shrink   Hide  
2 people are discussing this page, with 2 comments
To view all comments:
Expand Comments
(Or you can set your preferences to show all comments, always)

This is the way to present true info.Of course, as... by BFalcon on Thursday, Nov 15, 2012 at 9:51:40 AM
I want a Divorce from the UN and Foreign Banks. I ... by Steven G. Erickson on Thursday, Nov 15, 2012 at 12:26:08 PM