Don't Be a Grinch, Mr. President
Bad news is pouring out of Washington D.C. this Yuletide season, but across the rest of the country, you can hear glad tidings.
Santa needs to bring memory enhancers to members of Congress panicked over the fiscal cliff. They forget that they deliberately created this cliff. The idea was to enact automatic spending cuts no one wants that would take effect in 2013 if Congress failed to devise a better plan to curb excessive spending and borrowing.
The saga began 18 months ago, when President Obama demanded that Congress hike the federal borrowing limit by a whopping $2.1 trillion, the largest hike in history. Congressional Republicans capitulated, but the deal they struck provided $1.2 trillion in automatic spending cuts beginning in fiscal 2013, unless Congress came up with comparable savings. Congress did nothing. The borrowed money is used up, the automatic cuts are looming, and Washington politicians are wobbling.
As the fiscal cliff negotiations began, President Obama offered only $400 billion in net spending reductions (not $1.2 billion) and demanded a new debt ceiling increase, this time unlimited. Speaker of the House John Boehner signals he will raise the debt ceiling again, hike tax rates on top earners and meet in the middle on spending. In short, both sides intend to continue spending on borrowed money, stuffing the IOUs in your child's Christmas stocking.
That's the bad news. The good news is that you don't have to worry about your taxes going up on Jan. 1 if there is no deal.
Obama is scaremongering when he says the two sides have to rush to compromise before the Bush tax rates expire at year-end. Nonsense.
Most people have taxes withheld gradually during the year. The Congressional Budget Office confirms that the president has the authority to instruct the U.S .Treasury to freeze withholding rates while the sides negotiate. Don't be a Grinch, Mr. President.
There's more good news this Yuletide, but you have to leave Washington D.C. to see it. The battle to protect personal freedom and economic growth goes on, despite President Obama's re-election.
Michigan passed a "right to work" law on Dec. 11, liberating employees to work for a unionized employer without being forced to join the union or have dues automatically deducted from their pay. Between 1980 and 2011, employment grew 71 percent in "right-to-work" states, twice the job growth in states without such laws.
Deck the halls for the nine states without income taxes. They had triple the job growth of states with an income tax over the last decade.
Bravo that as of Dec. 15, half the states are refusing to set up health insurance exchanges, a major setback against the unpopular Obama health law. States are reacting to the administration's "our way or the highway approach," which allowed no flexibility. Now the federal government has to erect the exchanges, and there is little time. Exchanges are supposed to be operating by October 2013, to begin enrolling those who are currently uninsured and the millions more who are expected to lose their on the job coverage when employers balk at the high cost of Obamacare.
Back in Washington, there's a silver lining to the forced withdrawal of Ambassador Susan Rice from consideration for Secretary of State. Even an African-American woman can be called incompetent — a sure sign that we are progressing toward a color blind, gender blind society.
Merci beaucoup to France's socialist president, Francois Hollande, for showing that class warfare results in fewer wealth producers and less tax revenue. Since Hollande raised tax rates on millionaires on Sept. 28, as many as half of France's wealthiest families have reportedly left, including France's film icon Gerard Depardieu, who moved 800 yards across the border to Belgium. President Obama, who bashes the rich with the same joie de vivre as Hollande, needs to learn from the economic disaster befalling France.
Belated thanks to former Labor prime minister Gordon Brown of England for proving the folly of soaking the rich. In 2010, Brown raised the top income tax rate. In less than a year, nearly 2/3 of the nation's million pound earners had gone to other countries or simply stopped reporting high incomes.
Merry Christmas to Chancellor Angela Merkel of Germany. She is tackling Europe's borrowing crisis one step at a time, showing countries drowning under debt how to spend less and prosper. Germany still has the AAA credit rating that the U.S. and France used to have.
The best holiday gift Washington could give us is serious plan to curtail spending, not another gimmick to borrow now and defer spending reform. Failing again is like putting coal in every American kid's stocking.
Betsy McCaughey is a former Lt. Governor of New York and author of "DeCoding the Obama Health Law". Email her at email@example.com. To find out more about Betsy McCaughey and read features by other Creators Syndicate writers and cartoonists, visit the Creators Syndicate website at www.creators.com.
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