Over the Fiscal Cliff…

30 Nov Cartoons for the Classroom: Fiscal Cliff

You are about to travel over an enormous precipice not of sight or sound but of your check book; a journey into a terrifying land where Republicans and Democrats alike play on the wildest fears of your imagination… Next stop, the bottom of the Fiscal Cliff!

We are standing at the edge of this so called cliff… Just a little push and over we go falling straight down into the abyss below. Or is it more of a tumble down a mountain? Or is it possibly just a slow roll down a hill? Whatever it is: the fiscal cliff, mountain, or hill most Americans are very scared of this enigmatic occurrence that very few truly understand. Of course we are scared though what other choice do we have. Washington and the media have done their very best to scare the hell out of us with it. Not that this is a joke or by any means a good thing. I only wonder: Is it as bad as they have made it out to be? Rather than sound too flippant about this crisis we are facing I must admit that I do not know exactly what “falling” off this “cliff” would mean for us and to be perfectly honest I do not think anyone else really does either. That is why this is so terrifying for most people. Much like the mysterious December 21st 2012, a date that has remained in that frightening part of many people’s peripheral vision for several years now, no one really knows what is going to happen. The fear of the unknown, even in the most rational of people, can be very powerful. No one can see the future. No one really knows. In order to prepare yourself for your journey to the bottom of this so called cliff you need to understand exactly what the fiscal cliff really is.

The fiscal cliff is a direct result of the inability of our leaders to come to any type of bi-partisan agreement on the budget. In 2011 when Congress could not agree on raising the debt ceiling (and eventually led to us losing our AAA credit rating) Congress passed the Budget Control Act as a compromise between the parties. The Budget Control Act did the following things:

  • Raised the debt ceiling.
  • Provided mandatory spending cuts equal to the amount that the debt ceiling was to be raised ($917 billion in cuts). It also contained provisions for further debt ceiling increases upon Presidential request.
  • Set up a committee of 12 members (6 Republican and 6 Democrats) to produce legislation that would reduce the deficit by $1.5 trillion over ten years. Their deadline was December 23, 2011 (needless to say they did not find a solution).
  • As an incentivize to Congress to reach an agreement it also provided a provision that stated if an agreement was not reached by December 31, 2012 to reduce the deficit by at least $1.2 trillion (over the course of ten years) then an across the board “sequestration” of spending would occur.

The design of the sequestration was to be so horrendous that it would force both sides to come to a compromise over the budget. Why is the sequestration such a bad thing? This provision provides mandatory cuts across the board split evenly between defense spending and non-defense discretionary spending. The cuts will equal $109 billion a year or roughly $55 billion for each category. Programs that would be exempt from this cut would include Social Security, veterans and retirement benefits, CHIP, SNAP and TANF, along with a large part of other mandatory spending. You can get a more detailed list on the Cornell University Law School website (link provided at the bottom of my blog). Medicare could be cut but the cuts would be capped at 2% per year. Why is this so bad? Legislators have no control over where the money is cut. The cut is roughly equal across the board to all programs in the category. You cannot steer the cuts to programs with less impact. Many may say we should not have raised the debt ceiling in order to avoid this, but that was not the answer either. Why was raising the debt ceiling so important? The main reason being that without raising the debt ceiling the US would default on its debts. If we cannot pay our bills we make a lot of nations around the world very angry. Whether you agree with the spending choices of our government or not this is a very bad thing.

In addition to the Budget Control Act’s sequestration there are several other things set to occur that will affect Americans on January 1st.

  • “Bush era” tax cuts expire.
    • What this means: everyone’s income tax rates go up, as well as estate and capital gains tax rates.
  • Alternative Minimum Tax (AMT) patch expires.
    • What this means: Designed in 1982 to ensure the wealthy pay their fair share, this was not implemented taking into consideration inflation and each year has had to be “patched” in an effort to not hit middle income earners. Once this expires this will hit single earners making right at $34,000 and joint earners at $45,000.
  • Payroll Tax cut expires.
    • What this means: Social security payroll tax holiday ends increasing social security tax from 4.2 to 6.2%.
  • Affordable Care Act taxes go into effect.
    • What this means: Increased taxes for top earners mainly those making $200,000 or more.
  • Extended unemployment benefits expire.
    • What this means: less time to receive unemployment benefits.
  • Rates paid to Medicare doctors decrease roughly 30%.
    • What this means: There is a possibility that this may cause doctors to pull out of the Medicare program.

In theory this is a good thing for the deficit. It will reduce spending and income will rise because taxes will go up for everyone (both positives for the deficit; less money going out, more money coming in). However, in the big picture this is a bad thing, although it is hard to say just how bad. For sure it will deepen the recession we are already in. When American’s have less money they spend less (obviously) and save more out of fear. When American’s spend less, businesses sell less. When businesses sell less, manufacturers produce less. When manufacturers produce less, they need labor less. All of this leads to a decline in jobs and working Americans which lead to even less money in the economy which leads to a deeper recession and eventually if left unchecked, depression. It is a vicious cycle that must be carefully balanced.

Will it be this serious? The answer to that question is not easy the answer… The only real answer: Who knows? It will definitely hurt everyone’s pocket book that is for sure, but will it be as painful as the Washington fear mongers suppose it to be? If it is allowed to play out completely there is a good chance that it will (and possibly worse). The point of this blog is not to scare you but to give you a reason to remain calm about our “pending doom”. So, the main thing to understand here is that January 1st is not a magic date. The house of cards does not magically fall down around us on January 1st. Much of the consequences of going over the cliff will play out over the course of 2013 and some of it not until time to file 2013 taxes in early 2014. Congress can (and most likely would) pass retroactive bills that make the law effective as of January 1st no matter when they come to an agreement.

There is still plenty of time, and they will find a solution. If I had to bet I would put my money on it not happening by December 31st though. We will most likely witness Uncle Sam slip over the edge of the cliff. This is mostly because of politics and not because of a lack of an agreeable plan. However, I doubt it will take long before Uncle Sam is caught and set back on top of that cliff again, but I highly doubt an agreement will occur before the end of the year.  I do not think this is anything we should stress right away though, as I believe that this will be a tumble down a gently sloping mountain rather than a free fall from a cliff. I am fairly sure that Congress and the White House will eventually find some middle ground to meet on. Now, if by the summer this is still an issue then you can start having panic attacks. Besides, if December 21st plays out this whole issue may be a moot point anyway.

All joking aside, I just hope they come to a long term agreement and not a Band-Aid fix that will need to be reapplied in a year (or less). Washington has got to remember who they represent and what their job is. Representing the people means doing what is best for the nation to ensure it is strong. To do this they must understand that yes, they are representing two different political ideologies but those ideologies must find common ground to ensure that both sides are fairly represented. If they cannot do this then they should not have a job. Also, as upsetting as it may be for those on the right to admit, they need to realize that they only hold one piece of the tri-force and that means they are going to have to give a little more than the left.

That is what legislating in the United States is all about isn’t it? Finding some middle ground between the two parties to represent all of America? You forced yourself into this corner with your Budget Control Act now do what all America expects you to do and act for us not for your parties…

— Cicero

Link to Cornell Law school website:  http://www.law.cornell.edu/uscode/text/2/905

Divided we fall… Secession and its Stain on America

14 Nov

My original plan was to write about the presidential election and its impact on American political parties now that the tide of emotion has receded and the results have started to sink in for most people.  However, another issue has come to light in the last week that I think is a better use of my blog and one that I would like to comment on this week. That is, after all, what the point of my blog is. It is a commentary on events affecting us today even if it is an event that is unlikely to ever occur.

The issue I want to discuss is the idea of secession. Apparently some people in our nation have the romantic idea that secession can cure all that ails the country or at least their state. The very thought is laughable. The term secession should be considered a four letter word in our society. It is truly a stain on the history of our great nation. Secession was the direct result of Americans who were unwilling to work together for the common good of America and mankind. It very nearly cost us our nation. It probably would have, had we not had a great man like Abraham Lincoln in office.

Apparently on November 7, the day after the election, a citizen of the state of Louisiana filed a petition with the White House for Louisiana to be granted peaceful secession from the Union. As of November 14th at least 44 citizens (several states have more than one petition submitted) from other states have filed petitions for secession on their state’s “behalf.” The states with the most signatures at the moment are: Louisiana, Texas, Alabama, North Carolina, Florida, Georgia, and Tennessee. Under the We the People Initiative if these petitions, filed with the White House, reach 25,000 signatures by their deadlines (Dec. 7th for Louisiana, the 9th for Texas, the rest at later dates) the White House must issue a response. As of 10:00 EST on November 14 all seven of these states have exceeded the 25,000 signature threshold (with several more states closing in on that number). So, it would appear, that we will hear a response from the President at some point in the near future. I just have one thing to say… Seriously?

The idea of secession is preposterous. Just to refresh everyone’s memory; in 1860 South Carolina tried this. They eventually banned together with other disgruntled states to form the Confederate States of America. I am not sure if you guys remember this or not (I mean it being such a small event and all) but it did not end so well for the Confederacy. Although I feel the legitimacy and likelihood of anything coming of this is less than zero I thought it would be interesting to discuss the implications of what a split of the Union would mean today.

First, contrary to what people may believe secession is not “illegal” by any statute, law, act, or order. The Civil War did not “outlaw” secession it simply showed us that one union of states can, through military action, put down a rebellion. There is nothing in the Constitution that says that a state may not secede, not even an Amendment passed following the Civil War (I mean who would have thought the idea would ever be entertained again?). Simply stated there is nothing that says you can or cannot secede.

The basis to this argument comes down to one very important question: Did the Confederate states ever actually leave the union? Many claim that Texas v. White (1869) provides an answer to this question: it basically states that no, the states were simply in a state of rebellion but were still members of the United States. However, the decision written by Chief Justice Chase was not based on any precedent or anything in the Constitution only on his view of the situation. Others will claim that because President Grant signed an act allowing Texas to “return” to the Union that this shows that the States were no longer part of the Union but if you read the act to reinstate Texas as a full member of the United States you will notice that this is not true. The wording of the act is both careful and I am sure intentional. It states (just as the reconstruction acts of 1867 did): That the State of Texas is admitted to representation in Congress as one of the States of the Union upon the following fundamental conditions… Nowhere in this act does it say that they will be readmitted, it says that they will be admitted to representation in Congress, something they had been denied as a punishment for their rebellion. When your child rebels and does crazy things do you kick them out of the family? No, you punish them. In all honesty had President Lincoln not chose to act the way he did we may have remained two separate nations, at least for the length of time it took England or France to get on ships and come over and conquer one or both. In the end the decision for how to respond when faced with secession lies with the President of the United States.

Let us explore the notion of secession. What could/would this mean for us on both sides of the border and the world at large? As I explore these notions for the sake of simplicity we will refer to these two countries as the United States and the American Republic. This is assuming, of course, that the seceding states plan to band together and form a separate nation. An assumption I find highly unlikely.

Let us first consider a peaceful secession:

The global impact of a split United States would be catastrophic. It would be similar to the fragmentation of Eastern Europe in the 90’s; the birth of brand new nations with constant in-fighting that would need to earn stature across the globe. Rather than having one nation united and in recession (like the rest of the world) you now have two weak nations that are fighting among themselves and heading towards depression or worse. No nation would extend credit to the untested government of the American Republic or the weakened nation of the United States. With a collapsed infrastructure and little ability to provide for itself neither nation would be taken seriously and the world would scoff at their attempts at diplomacy. Both nations would have to immediately cease to have a global presence as both would have to consolidate and strengthen their nations domestically. Without the United States to support fledgling democracies and friendly governments you will begin to see less than friendly governments supporting and bringing to power more unfriendly governments. This would soon lead to unfriendly governments viewing both American nations as a target. Of course there would be allies and under peaceful secession terms I am sure both would be friendly to each other but without the combined might of the nation how strong, truly, would this divided nation be?

The domestic impact would also be disastrous. Geographically it would be impossible to define borders. Neither nation could support itself. Much of the agriculture and oil-producing states would be in one nation while the manufacturing would be in the other. Neither country would have the infrastructure to sustain a nation and would have to rely too heavily on foreign (both of these nations would now be foreign) products to survive. Also, how do you handle the military? How about the debt we all contributed to?

If the secession was less than peaceful the magnitude of the above problems would increase exponentially as friendly relations between the two would be nonexistent. Not only would you have to worry about attacks from your own continent the possibility of transatlantic or pacific invasions on both nations would increase. The economy would slide faster into depression and probably bankruptcy. Foreign powers would be fighting over who would get to take over America as we would no longer be able to pay our debts or protect ourselves.

All of this is taking for granted of course that the seceded states would want to form their own single new country. This is highly doubtful as many of these states have completely different ideologies when it comes to politics and policies. If they do not unite, then how do the states with a large percentage of its residents living at or slightly above the poverty level sustain themselves? How do they defend themselves? How do they pay for the things a government needs to exist?

Our government, though not specifically stated, was designed as a permanent union of states. A permanent union that would work out there problems when they had differences not divorce at the first sign of trouble. The intent is obvious with both documents written by our founding fathers to create our nation’s government:

Articles of Confederation and perpetual Union between the states.

— Articles of Confederation 1781

AND

We the People of the United States in Order to form a more perfect union…

— Constitution of the United States of America (1787)

The Articles of Confederation set up a perpetual union of states, not a temporary or expedient one but perpetual… everlasting. The Constitution wanted to improve upon the government of the articles by creating a more perfect union, not a weak one that can be dissolved on a state’s whim but a more perfect one. A government that can fall apart simply by a state or group of states wanting to dissolve its relationship is in no way “more perfect”. The strength is in the Union. Lincoln recognized this as I am sure President Obama and any other president to hold the office would.

The We The People initiative is President Obama’s own “big block of cheese” (you West Wing fans out there will understand that one). His way to allow anyone to have access to his administration and have their concerns heard and, if it is a big enough concern to the American people, something done about it. Use the tool as it is meant to be used and as the Constitution provides: to petition the Government for a redress of grievances. Address your concerns through petitioning the government for changes in policy and by electing people who support your views on the things that you feel are the most important. Secession is running away from the problems not an attempt to fix the problem.

A house divided cannot stand.

— Abraham Lincoln (1858)

The polarized nature of this country is eroding what makes this nation great. We cannot remain so divided or we will fail. We must come together and fashion compromise for the betterment of this nation. In order to do this the people on both sides of the argument must be willing to compromise. If we cannot, if we will not, then we will fall.

— Cicero

Link to the We the People Initiative page:

https://petitions.whitehouse.gov/homepage

What is this all about?

8 Nov

“A citizen’s voice for the American people?” What do I mean by this?

It has been some time since the American political machine has truly listened to and worked for its people. At times I think we have forgotten Lincoln’s assertion that we are a “government of the people, by the people, for the people” (Abraham Lincoln, Gettysburg Address, 1863) I know that those in charge have. The government has become a largely distorted image of the people they are supposed to represent. The Democrat and Republican Party leaders do not truly represent those who call themselves Democrats and Republicans. This has given rise to the Independent. Pew Research Center’s 2012 Values Survey shows that 38% of Americans identify themselves as Independents while only 32 and 24% identify as Democrats and Republicans respectively. This tells me that neither party in our two party system truly represents America’s citizens. First let me say this I do not believe in an independent voter. What I do believe in is a voter that has no party to turn to. This is a fundamental flaw in our two party system. Too many times I have heard: “I choose the lesser of two evils, the party that represents the issues I feel the most strongly about.” Even I have said this on occasion as I can honestly say there are aspects of my chosen party that I do not agree with. This is unacceptable. We should have choices when it comes to choosing our representatives.

The Republicans and the Democrats are too far to the right and left when too many Americans are in the middle. This leads to electing representatives that only partially represent our beliefs and then forces their other beliefs upon us. What does this lead to? As a friend of mine is fond of saying it leads to “the tyranny of the minority.” We get a very small group of people choosing the only truly viable candidates in an election. A great example of this occurred yesterday. Yesterday we made the monumental decision of who would be our President for the next four years. The only two viable choices were President Obama and Governor Romney because they were supported by our two major political parties. Sure, there may have been third party candidates from the Libertarian party or the Green party on the ballot in some states but in how many of those did that person receive even a percentage of the vote? To have our vote “count” we must choose one of the candidates from a major party. How many people out there wanted to vote for Governor Romney but would not because of his stance on abortion or wanted to vote for President Obama but would not because of his stance on defense spending? Where is America’s voice in that?

That is why I started this blog. I want to provide a voice of “Every Man”. I want to be the voice of the centrist that is tired of being ignored and underrepresented. I want to be the person that reminds everyone that we are a nation “of the people” and not of the parties and that it really is up to us to ensure our voice is heard. If we do not make our voices heard then no one will listen for it.

Why did I choose the title of my blog? Cicero’s Voice, is homage to the Roman politician Marcus Tullius Cicero. Cicero is considered one of the greatest orators and statesman ever to have lived. He is without a doubt the father of modern politics and a direct influence on the idea of Representative Democracy and the three branches of government providing checks and balances instituted by our founding fathers. Thomas Jefferson and John Adams both spoke of Cicero and his influence on the American political system. Adams held Cicero in such high regard he felt that his opinions must be considered in the formation of our government:

As all the ages of the world have not produced a greater statesman and philosopher united than Cicero, his authority should have great weight

John Adams, 1787

Cicero was a great supporter of the republican form of government. Living at the end of the Roman Republic and the beginning of Imperial Rome he had first-hand experience of one of the mightiest. Cicero was well known and respected and at first friendly with both Julius Caesar and Pompey. Cicero was even invited by Caesar himself to be the fourth member of what would later be known as the First Triumvirate. Cicero refused knowing that it would undermine the Republic. When Caesar and Pompey had their differences Cicero sided with Pompey as he was a supporter of the Senate and republican tradition. In the end Cicero was assassinated by Marc Antony for speaking out against him and the government of Imperial Rome.

As a proponent of republican government I think Cicero would have been happy to see the nation created with our Constitution and the progressiveness of its form of government. However, I think he would be speaking out today against this “tyranny of the minority” that has the people of the United States firmly in its grasp.

That is why I am taking on the moniker of a modern day Cicero, if you will, to be his voice for the American people. I have taken on the moniker simply as a tool for what I hope remains my non-partisan comments and pleas to the American people and their representatives. Cicero can be a symbol of the American citizen. To quote Bruce Wayne in Batman Begins:

 A man is just flesh and blood and can be ignored or destroyed. But as a symbol… as a symbol, I can be incorruptible, everlasting.

Cicero can be a symbol; a symbol of non-partisanship, cooperation, and America.

— Cicero

We were warned…

7 Nov

However combinations or associations of the above description [political parties] may now and then answer popular ends, they are likely, in the course of time and things, to become potent engines, by which cunning, ambitious, and unprincipled men will be enabled to subvert the power of the people and to usurp for themselves the reins of government, destroying afterwards the very engines which have lifted them to unjust dominion.

George Washington, in his farewell address 1796

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