Cartoon of the day: A real threat 
RANDALL ENOS © 2013 Cagle Cartoons

(Source: theweek.com)

The fiscal-cliff fix: Winners and losers

WINNERS 

• Joe Biden — Biden certainly “emerges with enhanced stature from the budget mess,” says The Daily Beast’s Kurtz. He was “called off the bench” on Sunday, then “showed a deft hand — and the experience of growing up in [the Senate] — in quickly hammering out a deal with Minority Leader Mitch McConnell.” If the 70-year-old vice president “decides to run for Obama’s job in 2016, such performances could more than offset his reputation for shooting from the lip.” Of course if Democrats end up hating the deal, this could actually “bite Biden down the line,” says Chris Cillizza at The Washington Post. But he clearly ranks among the winners for negotiating the deal and persuading Democrats to support it. The vice president is often underestimated by the political press, but “the ‘Biden as major White House asset’ storyline writes itself” now.
   
• The rich and elderly — Obama’s decision to raise the threshold for higher taxes from $250,000 to $450,000 makes for “a big tax cut for all kinds of rich people, not just those with adjusted gross incomes between the two figures,” says Matthew Yglesias at Slate. Because our tax rates are marginal, meaning that only income above $450,000 is taxed at the higher rate, “if you make $600,000 or even $1 million a year you still have a very large share of your income that’s taxed at a lower rate thanks to this deal.” The deal also didn’t have any of the expected cuts to Social Security and other federal retirement security programs, so at least for now, “old people are the winners,” too.

LOSERS

• John Boehner — “The fiscal cliff talks were cast as a moment for [John] Boehner to cement his legacy as speaker,” negotiating a grand bargain that would “set the country on the right financial course through the Republican-controlled House,” says Cillizza at The Washington Post. “The exact opposite happened.” The Ohio Republican dropped negotiations with Obama to pass his own “Plan B” — raising taxes on only people earning $1 million a year — but that plan failed to even get a vote, raising questions about “how much — if any — control he had over his fellow House Republicans.” That idea was reinforced when Boehner couldn’t get more than half of his caucus, or even his top lieutenants, to back the final compromise, says Daniel Newhauser at Roll Call. Boehner “now slumps into the 113th Congress with gavel firmly in hand but with scant ability to wield its power.”
   
• Hurricane Sandy victims — After the messy fight over the fiscal cliff bill, House GOP leaders canceled a scheduled vote on a supplemental spending bill for areas ravaged by Hurricane Sandy, mostly in New York and New Jersey. The House Appropriations Committee had even teed up a $60 billion package, matching the Sandy relief bill that passed the Senate last week. “Absent a change of heart, the upshot now is that the Senate bill will die with this Congress on Thursday at noon,” says David Rogers at Politico. “I assume there is as tactical consideration here, that the Republican leadership didn’t want to be anywhere near a big spending bill after the fiasco of their handling the tax debate,”says Rep. Rob Andrews (D.N.J.). “I understand the tactics but there is a real human need here that is being ignored.”

More winners and losers

(Source: theweek.com)

President Obama convincingly won a tough re-election fight, and almost immediately he has to deal with “Taxmageddon,” the so-called fiscal cliff that looms before the U.S. economy on Jan. 1, 2013.

But what, exactly, is the fiscal cliff?

Answer: The fiscal cliff is a combination of $536 billion in tax increases — a return of rates to 2001 levels (before the Bush tax cuts) plus an end to Obama’s 2 percent payroll tax holiday and various business and investment tax breaks — plus $110 billion in spending cuts almost immediately affecting everything from the military to Medicare.

How would that affect me?
According to an Oct. 1 analysis by the Tax Policy Center, the fiscal cliff would increase taxes for 90 percent of Americans, by an average of about $3,500 per household. There’s a pretty big spread contained within that average — the lowest 20 percent of earners would have to pay $412 more a year (a 3.7 percent cut in after-tax income), the top 1 percent would pay an extra $120,000 a year (a 10.5 percent hit), and those earning $40,000 to $65,000 a year would pay an average of $2,000 more a year (a 4.4 percent cut in income)

Who thought this would be a good idea?
Nobody, really. A sizable majority of Washington, including Obama, wants some of the tax rates to stay put, at least for now; the question is whether to keep all of the lower rates, as the GOP demands, or raise taxes for just the wealthy, as Democrats insist. We’re at this point largely because the two sides couldn’t resolve that conflict at the end of 2010, the last time the Bush-era tax cuts were scheduled to expire. The package of steep spending cuts, or sequester, was Congress’ idea, a cudgel to force its own “supercommittee” to agree on a binding plan to reduce the deficit; they didn’t. 

Would driving off the fiscal cliff really be so awful?
Some economists argue that while the short-term pain would be bad, it might be worth the reward: Taming the national debt without having to do anything else. But most analysts say the one-two punch of big cuts and sharply higher taxes would be too strong a shock to the recovering economy. “Going over the fiscal cliff would mean allowing a massive and immediate cut to nearly every major government agency and activity, including those vital to our national security or economic growth,” argues Erskin Bowles in The Washington Post. “It would mean a double-dip recession at a time when the economy is still very weak and many Americans are struggling to find work.”

What are lawmakers going to do about it?
That’s the $800 billion question. Obama campaigned pretty heavily on raising taxes for the wealthiest Americans, and has pledged to veto any fiscal-cliff solution that doesn’t do that. House Speaker John Boehner (R-Ohio) — now “the undisputed leader of the Republican Party,” says The Washington Post’s Dana Milbank — made conciliatory noises after the election about the House GOP agreeing to ”accept some additional revenues” as part of a broad deal that reforms entitlements and the tax code, but it’s not clear if he’s offering anything new. And he also said that since they kept control of the House, Republicans “have as much of a mandate as [Obama]… to not raise taxes,” notes an unconvinced David Weigel at Slate. The great Beltway hope is that Obama and Boehner will seal a comprehensive “Grand Bargain,” and that their parties will go along with it. They have 49 days. Stay tuned.

Everything you need to know about the fiscal cliff 

(Source: theweek.com)

About 78 percent of U.S. corn and 11 percent of soybean crops are being affected by the nation’s largest drought since 1956. The price of corn has risen 38 percent since June 1, while beans have risen 24 percent.

As a result dairy, grain, produce, and meat prices are all about to go way up, affecting the price of everything from chicken to ice cream to pizza. The ramifications will likely be felt globally as well. “The dramatic rise in grain prices in the past few weeks is shaping up to be a serious financial blow for wheat-importing countries,” a German trader tells the AFP.

Has drought put the U.S. food supply at risk? 

With the 2012 Summer Olympic Games now just days away, many Londoners are feeling anxiety and regret. A recent poll found that half the city’s residents are not interested in the Olympics at all, and 42 percent think the city should never have bid for them.

“It’s a major disaster,” said documentary filmmaker Iain Sinclair. “You don’t need this vast, top-down structure spending billions of pounds to obliterate a landscape.”

London’s Olympic regrets

America still has a jobs crisis, and one Pulitzer Prize-winning writer has a solution: Bring the draft back.

Here’s his proposal: Have all men and women serve for 18 months, either in the military or in a civilian service program. We’d strengthen the military, and create a cheap pool of government labor to teach, clean up parks, help the elderly, and perform other essential but low-paying duties.

Draftees would receive low pay but excellent post-service benefits. Anyone who would rather not serve at all could opt out, provided he or she pledge not to ask for government services such as Medicare or subsidized college loans down the road.

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“What remains”
Glenn McCoy © 2012 Universal Press Syndicate

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“The wealthy’s mess”

Christopher Weyant, © 2012 Cagle Cartoons
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In the past four years, young adults have come of voting age “with views shaped largely by the recession,” reports Susan Saulny in The New York Times. 

Today’s 18- to 24-year-olds support Obama over Republican rival Mitt Romney by just 12 percentage points — half his lead among voters aged 25 to 29 — and among white college-age voters Obama and Romney are essentially tied. Probably not coincidentally, the unemployment rate for 18- and 19-year-olds is 23.5 percent, and 12.9 percent for those 20 to 24.

Will a lousy economy cost Obama the youth vote? 

Hooter’s top three competitors — Twin Peaks, Tilted Kilt, and Mugs N Jugs — each grew by at least 30 percent last year. Why are “breastaurants” succeeding while mid-price options such as Applebee’s and Bennigan’s have experienced declines?

“Why bother dining out if you’re not going to have a unique experience?” says Maressa Brown at The Stir. Most restaurants have some sort of “schtick to get people in the door,” and for breastaurants, “waitresses showing a little skin and serving regular ol’ pub food in a fun, kitschy way just happens to be theirs.” That’s why, as “a longtime self-described feminist,” I’m all for these “almost unavoidable, non-threatening” signs of the time.

Keep reading

Would the GOP raise taxes on the middle class? House Republicans say their budget will give big tax breaks to virtually every taxpayer. But the numbers don’t add up.

Greek voters went to the polls on Sunday to decide the make-up of their next government and, in many ways, the fate of Europe’s single currency, the euro. The result of the closely fought election: A ”knife-edge” victory for the center-right New Democracy party, which supports enacting EU-backed austerity measures that Greece must observe to remain a member of the eurozone, narrowly beating the leftist Syriza party, which ran on a strong anti-austerity platform. The 30 percent to 27 percent edge gives New Democracy (ND) 129 of the 300 seats in parliament, and ND leader Antonis Samaras is expected to form a government with the once-dominant centrist Socialists (Pasok). Syriza head Alexis Tsipras vowed to keep his party in opposition, pushing for stimulus spending and against austerity. Where does this leave Greece, Europe, and the global economy? Here, four takeaways:

1. Greece will stay in the eurozone for now…
“This is the outcome that markets have most wanted to see,” says Joe Weisenthal at Business Insider. If New Democracy and Pasok form a workable coalition — which seems likely — the Greeks will accept austerity and at least temporarily avert a disaster for the euro, Europe, and the rest of the world. But Syriza won more than one-fourth of the vote, proving that “a large segment of the population despises the EU-imposed austerity measures,” says André Gerolymatos in Canada’s Globe and Mail. But a loss is a loss, and in the end, “the Greeks came to edge of the precipice but at the last minute stepped back.”

2. …But may still exit later
The fact that “the Status Quo party” beat the “the Stop the Austerity Party” should “give a financial markets a brief breather,” with the emphasis on “brief,” says James Pethokoukis at the American Enterprise Institute. Even if ND and Pasok can form a pro-euro coalition, Greece’s “economy is just too sickly to met the bailout requirements,” even if Germany loosens them a bit. The bottom line: Uncertainty about Greece’s financial stability, even with these austerity measures, will “drive the EU into a deeper recesssion,” meaning “Greece is still likely headed for the exits this year.”

3. This is a Pyrrhic victory for the pro-euro side
New Democracy essentially won the right “to continue pursuing an unworkable policy,” says Paul Krugman at The New York Times. “Yay!” And the scuttlebutt in Greece is that “Syriza didn’t really want to win,” since one more (inevitable) failure on the ND’s part will completely discredit “the entire Greek center,” leaving Tsipras to pick up the pieces.

4. Germany will decide Greece’s fate
If you want to know Greece’s future, look to Berlin, says The Wall Street Journal in an editorial. New Democracy’s Samaras will almost certainly ask Germany’s Angela Merkel to relax the terms of the bailout, and “would the German chancellor dare to say no, thus becoming the proximate cause of a first euro exit?” She “might have preferred a Syriza victory,” since it would have given her “an excuse to cut Greece out of the eurozone.” Perhaps, but while Greece is “not without sin,” its problems are largely due to “other people’s hubris,” says Krugman in The New York Times. “The only way the euro might — might — be saved is if the Germans and the European Central Bank realize that they’re the ones who need to change their behavior.”