It appears that certain lawmakers don’t want to stop the fiscal cliff. Those reasons seem clear to be politically motivated rather than for the good of the country.
Many lawmakers state that they will not sign on to the fiscal cliff offers that have been presented thus far because those offers would involve raising taxes on those earning more than $250,000 per year and they simply cannot vote for that under any circumstances. Some democrats have insisted that they cannot vote for any spending cuts that would cut Medicare and some other programs.
The part that is incomprehensible to close observers is that while this belief may be respected, if lawmakers do not come to an agreement, taxes will increase far more on everyone rather than modestly on the affluent. Spending cuts will be significant across the board for many programs rather than just for some programs.
If lawmakers do vote any agreement, in future elections, Republican incumbents fear they will be accused of raising taxes as well as agreeing with, and promoting Obama’s agenda by challengers from the right in Republican primaries in their district. Democratic incumbents are concerned they will be attacked for cutting beloved social programs such as Medicare and social services in democratic primaries in their district.
As a result, it appears that many politicians would rather allow large tax increases, large spending cuts, a possible additional U.S. Credit downgrade, major decreases to the stock market, and another recession actually occur, rather than risk accusations by political challengers in future elections. Stay tuned, the ride is just beginning.
Update 01/13/2013 – The fiscal cliff was partially avoided and delayed. The revenue increase aspect was agreed upon, while the spending part of the deal, which is really half the equation, was simply delayed for 2 months, as an agreement could not be reached. Political heads of Government came to this agreement at the last minute, while rank and file politicians in the house, especially Republicans, voted against a deal. It would have been interesting to see if the politicians that voted against it, over the course of the two to three weeks afterwards would have still insisted on their district receiving the same level of Government spending. After all, they certainly give the impression that they want to cut spending, only not in their districts.