Two rejected plans later, the people weigh in on fiscal cliff solutions

While it is clear that bitter partisanship has not aided the resolution of the fiscal cliff legislation, politicians are not the only ones weighing in on how to best solve the fiscal cliff issue. With both Congress and President Barack Obama having presented uncompromising plans, the people are similarly divided in pursuit of economic health.

The Facts:

The fiscal cliff refers to the purported recession that the U.S. economy will enter in 2013 given the deep cuts and tax increases currently in place to reduce the deficit. The White House last week offered a plan which would cut $1.6 trillion through new revenues, savings in entitlement programs and spending on unemployment insurance and investment projects.

The Republicans quickly dismissed Obama’s plan out of hand. On Monday, Dec. 3, the Republicans introduced their own plan which would cut $2.2 trillion by saving through tax reforms, health savings, and discretionary spending cuts. It is purported that senior White House officials have dismissed the proposal.

The issue that divides the parties here is most certainly not a unique one: Republicans oppose raising taxes as an instrument of deficit reduction while Democrats oppose deep cuts to entitlement programs and a tax code which favors the wealthy.

While the politicians may have the power, they are not the only ones with a voice. Compiled below are opinions from a variety of people, leaders, journalists, and officials on the crisis at hand. If Washington can’t find a solution, listening the to the people may be the only option left on the table.

The People Speak:

No Sacred Cows

“Americans can’t afford the Pentagon—which has turned “defense” into a costly mix of foreign aid and social engineering, subsidizing rich allies and engaging in nation-building.  Americans can’t afford entitlements—which are middle class welfare rather than social insurance, funded by the young.  All of these programs need to be cut.  There can be no sacred cows.”

-Doug Bandow, Forbes contributer

Media Matters

“Obama’s greatest point of leverage over Republicans is public fear and anger that, if successfully directed against his opponents, will force them to accept a deal he likes. The media love stoking public fear and anger. Especially local television news. And if the Washington (D.C.) market is any indication, Republicans are in for a rough ride.”

-Joshua Green, Bloomberg Businessweek, Washington correspondent

Uncertain economy + uncertain politics = no new jobs

“Uncertainty has been a big theme these last five years. Business leaders have at various times said they were uncertain about the recession, the fiscal stimulus programs, the recovery, the elections, the debt ceiling, the health care overhaul and the fiscal crisis in Europe.

…The fiscal cliff is the biggest reason that companies have been hesitant to hire…but a massive political squabble over spending and taxes is also a very effective reason for not hiring more workers even as more than 12 million Americans are out of work.”

-Allison Linn, NBC News

Tax Troubles

“Why is it "balanced" to cut programs for the most vulnerable Americans in exchange for closing some loopholes in the tax code? (Republicans still object to raising tax rates on the rich. They might agree to more revenue, but only by going after tax deductions). We have the most extreme inequality since the Gilded Age. The richest 1 percent have as much wealth as 90 percent of Americans. Top tax rates have been coming down since Reagan.”

-Jesse Jackson, Newsday

Taxing Wall Street

In the debate over the fiscal cliff, President Obama and congressional Republicans remain at odds over key elements of revenue and spending. Yet both sides are unwilling to consider a minuscule tax on financial transactions that could be a major source of income.

A financial transaction tax would apply to purchases and sales of derivatives, options and stocks. The tax would be small, half a penny or less on each dollar of the transaction value, depending on the product. This idea is often called a "speculation tax," because it would hit hardest at frothy high-volume trading as opposed to sober long-term investment.

-Ralph Nader, Washington Post

Keep on keepin’ on

"Every offer put forward brings us closer to a deal, but to reach an agreement, it will be necessary for both sides to move beyond their opening positions and reach agreement on a comprehensive plan which avoids the fiscal cliff and puts the debt on a clear downward path relative to the economy.”

-Erskine Bowles, co-chair of 2010 bipartisan deficit reduction panel

If all else fails, then we'll just have to Thelma and Louise it...