Political Animal


December 29, 2012 1:55 PM About Sums it Up

By Jesse Singal

Jon Cohn has a characteristically smart rundown of the policy and political implications of the New Year’s deadline:

Is January 1 truly the make-or-break date that so many politicians and pundits seem to think? That’s a lot less clear.
The administration has already instructed federal agencies to keep spending money as if the old, 2012 authorizations were still in effect. (For this reason, the Huffington Post’s Ryan Grim has likened the fiscal cliff to the Y2K scare.) The Internal Revenue Service, for its part, has not yet issued instructions on how to change withholding calculations for personal income taxes. The IRS has said it’d offer guidance by year’s end, which presumably means Monday. But even if the IRS produces new withholding guidelines, employers and payroll companies would need time to adjust their systems—in many cases it would take a payroll cycle or two, maybe even more. The Labor Department could pay those extended unemployment benefits retroactively, as it has done in the past.
That’s not to say January 1 is meaningless. While getting jobless benefits retroactively is better than not getting them at all, it’s not much help if your rent is due at the beginning of the month. Even temporary reductions in Medicare pay could convince doctors to see fewer patients, making it harder for seniors to get medical attention, at least for some period of time. The spectacle of congressional action could also scare consumers, investors, and employers—weakening a recovery that isn’t all that strong in the first place. That’s obviously not an outcome anybody wants.
But, if you’re a Democrat, holding out past January 1 has its upsides. Once the Bush tax cuts come off the books, the baseline for budget calculations changes: Bills preserving Bush-era rates on lower and middle-incomes, while restoring Clinton-era rates on upper incomes, would become tax cuts rather than tax increases. It’s a purely semantic distinction, for sure, but it could win over reluctant Republicans.

That last part really is key. In the minds of people who claimed to be radically opposed to any sort of tax hike, it’s hard to imagine the baseline not mattering. It may define common sense given all the vitriol spewed at Obama over his plans to “radically redistribute” wealth and so forth, but the fact of the matter is that in 2013 Republicans can vote for Obama’s preferred tax structure (or something like it) and have it be a “cut.” At the moment, that’s not the case, so a few days could potentially make a world of difference.

Jesse Singal is a former opinion writer for The Boston Globe and former web editor of the Washington Monthly. He is currently a master's student at Princeton's Woodrow Wilson School of Public and International Policy. Follow him on Twitter at @jessesingal.


  • T-Rex on December 29, 2012 2:42 PM:

    "The spectacle of congressional action could also scare consumers, investors, and employers—weakening a recovery that isn’t all that strong in the first place. That’s obviously not an outcome anybody wants." Oh come on, can anyone seriously believe at this point that the Republicans don't want PRECISELY that? They want Obama's Presidency to be a failure, even if it means taking down the entire economy, and they've made that abundantly clear many times.

  • c u n d gulag on December 29, 2012 2:49 PM:

    I don't think Republicans will vote for anything that puts President Obama or the Democrats in a good light.

    They want to degrade him, then destroy him - and the Democrats.
    THAT, is what they live for.

    Life has no meaning for them, if they can't push Democrats around, and win.
    Winning is the only thing that matters.
    Even if the country collapses as they try to eke out some small win for their trophy cases.

    And if they're the last ones standing on the smoking rubble, victory will taste just as sweet as if they won the elections this year.
    They'd 'rather rule in Hell, than serve in Heaven!'

    Party over country!

    Frankly, I'll be shocked if there's any deal before the next Congress is sworn in.

    Here's hoping I'm wrong - and, that it's a good deal for the Democrats, the poor, the sick, women, children, seniors, minorities, and the disabled.
    You know - all of the people the Republicans hate, and would like to see in desperate circumstances - if not dead.

    These are some truly evil "people."

  • Sick of Insanity on December 29, 2012 3:05 PM:

    Ah, the GEP...how many examples over the past few years typifying Gulag's honesty have we seen? How many examples are we seeing right now, between Washington and Michigan and Arizona's crackpot proposal to have bands of "armed volunteers" guarding schools.

    Wisconsin, Florida, and Texas have been quiet lately but the next bunch of ugly elections are coming up, where we have to keep an eagle eye on the right because they can't be trusted to vote honestly...

    And the future, with their amazing ability to concoct the wildest conspiracies out of thin air, we don't have a clue what the Republicans have in store.

    THIS is why our nation is continually stressed and angry and volatile to the point of committing irrational acts. The wackos are running the place now.

    We aren't going to have sanity and peace, remember peace, back in American until we take it back.

  • scott (the other one) on December 29, 2012 3:30 PM:

    If/when the tax cuts DO pass, the Democrats better be smart enough (I know, I know) to make sure they're forever known as The Obama Middle Class Tax Cuts.

  • Mxyzptlk on December 29, 2012 5:02 PM:

    Another passed-along reference to Y2K. Drives me crazy. The reason Y2K didn't seem like a big thing was due to action, not inaction. Thousands of companies paid tens of thousands of programmers around the world to fix computer code before the end of the year. That is why there wasn't a catastrophe.

  • zandru on December 29, 2012 7:34 PM:

    Amen, Mr. Mxyzptlk!

    I was there. I was one of them. I was updating software, modifying code, phasing out equipment that couldn't handle the new date formats. And I was at the Internet service provider late at night, waiting for midnight, looking for problems, so they could be fixed before the customers could be affected.

    Y2K was "no big deal" because the geeks, nerds & wonks were smart enough to DO SOMETHING ABOUT IT in the year before it actually occurred.

    Anyone who refuses to recognize this is just clueless.

  • Francis Bacon on December 30, 2012 1:07 AM:

    Won't it make a difference that (1) Boehner will be reelected Speaker and therefore won't be under immediate threat, and (2) the number of Democrats will edge up slightly in both the House and Senate?