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Fiscal cliff notes

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Nineteen protestors demanding Senator Richard Durbin oppose cuts to Social Security and other social programs as part of any deficit deal were arrested on Friday in his office and the lobby of the Federal Building, Kari Lydersen reports at In These Times [2].  (See our previous post [3] for more.)

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The so-called “grand bargain” is a “grand swindle” which ignores the “victory for middle-class populism” that last week’s election represents, according to Roger Hickey of the Campaign for America’s Future [4].

“Within hours of the election, the austerity posse was fear-mongering around the so-called ‘fiscal cliff’ and pressuring Washington to accept a ‘grand bargain’ before the end of the year that would slash Social Security, Medicare and Medicaid – and plunge us into a double-dip recession.”

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Durbin and other deficit hawks “are hoping that the hype around the budget standoff (aka ‘fiscal cliff’) can be used for a grand bargain that eviscerates the country’s two most important social programs, Social Security and Medicare,” writes Dean Baker of the Center for Economic and Policy Research [5], noting that “they made a point of keeping this plan out of election year politics.”

But they must act quickly, he points out – because “one of the pillars of their deficit horror story could be collapsing.

“Due to a sharp slowing in the rise of health care costs over the last four years, the assumption that exploding health care costs would lead to unfathomable deficits may no longer be plausible even to people in high-level policy positions.”

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At Tom Dispatch [6], Mattea Kramer and Chris Hellman of the National Priorities Project offer “Washingon’s Cliff Notes,” laying out the specifics of the manufactured crisis and urging us to “ignore the sound and fury” – it’s less a “fiscal cliff” than an “obstacle course.”  They predict that Congress will kick “sequestration” down the road.  They also predict that federal unemployment benefits will be allowed to lapse.

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If you’re serious about deficit reduction, local activist Paul Buchelt has a bunch of numbers for you at Nation of Change [7] – individual and small business tax avoidance, $450 billion a year; corporate tax avoidance, up to $500 billion; tax haven abuse, $337 billion or more – together it’s enough to pay off a trillion dollar deficit.

Want to save Social Security?  Lifting the cap on payroll taxes gets you $150 billion a year.  An estate tax on multi-millionaires is worth $100 billion, a financial transaction tax, like the one they’re instituting in Europe, $500 billion.

Now we’re looking at a nice surplus.