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Economic Prosperity and the Fiscal 'Speed Bump'

An incredible opportunity is coming for America, starting in just a few weeks. The Bush tax cuts will expire. Pentagon spending will be slashed – although still hugely larger than it was just a decade ago. And, to make conservatives smile, funding for programs that keep poor and unemployed people alive and healthy will be cut.(Photo: AP)

This is an opportunity for several reasons.

First, when the Bush tax cuts expire, everybody’s taxes will go up, particularly taxes on the rich and the very rich. Which means that if Democrats propose cutting taxes on working class people while ignoring the new rates for the rich, Republicans can sign on and vote for the legislation without violating their blood oath to multimillionaire K-Street lobbyist Grover Norquist. While it goes nowhere as far as it should – which would be to roll back the Reagan tax cuts – it’s a start on moving America in a more egalitarian direction.

Second, most of the cuts to the Pentagon budget are good things. The Pentagon has lost over $2 trillion that they can’t account for – it’s a good guess that you’ll find a lot of it in the 20-bedroom mansions owned by defense contractors and lobbyists that ring Washington DC – and this nation needs a healthy and robust debate on our role as empire. As President Obama said during the campaign, it’s time to do some nation-building right here at home.

And, third, by breaking out the social spending cuts and requiring Republicans – particularly in the House of Representatives – to go on record on their position to them, the American people will get to see Paul Ryan’s and Mitt Romney’s “47 percent are moochers” philosophy played out writ large. Americans will see, in a way that’s absolutely irrefutable, that the Republican Party is only out for the interests of the top one percent and doesn’t give a rat’s ass about working people or the poor. That could also set the stage for a Democratic victory in the House of Representatives in two years.

To make the most of this opportunity, Democrats need to have legislation in place now, this week or next, that addresses these three issues. It should be three separate bills, in fact, that will break out each of these issues. The first cuts taxes on middle and lower income people, while leaving rich people’s taxes the same as they were during the Clinton years. The second ratifies cuts to the Pentagon budget, but in a way that’s rational and reflects the reality that our biggest current and future threats are not nuclear war but cyberwar, not so much nation states as non-state actors angry that our drones killed their families. The legislation should, incidentally, put some serious limits on presidential power to be judge, jury, and executioner via drone strikes – particularly when the target is an American citizen.

If the Democrats put this legislation on the table now – with the promise of a vote on it the week after the New Year – it’ll sooth the fears of those who believe in the uncertainty fairy. And, if it’s decent legislation, it’ll give progressives a rallying point to pressure their members of Congress.

While I’d much rather see a rollback of the incredibly destructive Reagan tax cuts, this, at least, would be a start. It would calm the hysteria, provide a basis for moving forward, and put the lie to the stupid Republican theory that it’s good for our economy when the rich get richer and the poor get poorer. Combine it with some reasonable trade policies like those advanced by Senators Sherrod Brown and Bernie Sanders, and we might even see a return to the Eisenhower and Clinton prosperities.

It’s time to drive off the so-called “fiscal cliff.” Once done, Americans will realize it was just a speed-bump, and nothing like the Thelma and Louise fears being hyped by so-called deficit hawks.

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