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Fiscal cliff is no threat

December 13, 2012 12:10 am

Fiscal cliff is no threat

Concerns over the "fiscal cliff" appear to be exaggerated. The prospect arose initially because the Republicans and Democrats could not agree on how to address the deficit--higher taxes or less spending--so they made a binding agreement to force both.

When Obama signed the extension of the Bush tax cuts in 2010, they became Obama tax cuts: If he wanted a fight, it should have been when he had majorities in both the Senate and House.

The people voted for no new taxes (hence the Republican House majority) and no spending cuts (note Senate gains by Democrats and Obama's re-election).

Now it is time for reality: You no longer can vote for higher spending and no increase in taxes, not just for the rich but for everyone. It is time for the ill-advised tax cuts to expire, the Bush/Obama income tax cuts and Obama's Social Security tax cut. This will raise revenue by almost $200 billion a year.

Spending cuts under "sequestration" are also needed and misunderstood; these are cuts to "projected budgets," not real cuts in what is spent today, and therefore much smaller than portrayed.

As a 30-year federal employee in budget and finance, I can tell you that there is no agency or program that cannot cut 6 percent to 8 percent and still fulfill its mission.

As for extended unemployment benefits, extend until when? Until national unemployment reaches 6 percent? That could take years. Until the long-term unemployed find a job? That could take many years.

We have an employment imbalance due to over-spending on houses, cars, electronics, etc. It's time to recalibrate our employment expectations.

In the short term, to address the long-term unemployed, we should pay them to clean up after Hurricane Sandy. There are manual or low-skill jobs they can fulfill and "earn" $300 a week in unemployment. This tackles the East. In the South, employ them to clean up from Hurricane Katrina, still a mess in New Orleans' 9th Ward. For the West, enforce immigration labor laws: Replace illegal workers with the long-term unemployed, No work, no check.

Recessions caused by financial collapse require new thinking and adjusting to new reality: It's time to wake up.

Terry L. Hurst


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