Post Misinforms Yet Again on Budget Negotiations

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Friday, 14 December 2012 05:02

The Post again misled readers in an article on the budget standoff, which it calls the "fiscal cliff" to exaggerate the urgency of reaching a deal before the end of the year. It reported on a possible deal which it said:

"Senior Senate Republicans, meanwhile, were at work on a fallback plan that would not significantly restrain the national debt but would at least avert widespread economic damage by canceling tax increases scheduled to take effect next year for the vast majority of Americans. That strategy calls for Republicans to capitulate to Obama’s demand to let tax rates rise on wage and salary income for the wealthiest 2 percent of taxpayers.

"But the approach would also seek to thwart the Democrats by trying to block other steps that would increase taxes paid by wealthy taxpayers, including higher rates on investment income and limits on the value of itemized deductions."

While the piece does not spell out "other steps that would increase taxes paid by wealthy taxpayers," the list presumably includes the rise in the capital gains tax rate and the ending of the preferential tax treatment of dividend income. Referring to these as "steps" implies that action must be taken for these tax increases to go into effect. This is not true.

If nothing is done, these tax increases will go into effect on January 1, 2013. This distinction is important because the Post's discussion might lead readers to underestimate the strength of President Obama's position. Since the article does not provide much actual information, as opposed to speculation, it should at least be able to convey what measures involve action by Congress as opposed to doing nothing. In this case it is suggesting that President Obama would agree to sign on to a deal that would require he approve a substantially smaller tax increase on the wealthy than is specified in current law. This fact should have been made clear to readers.

The piece then continues:

"This strategy would produce only about $440 billion in new taxes and give the Democrats even less revenue than Republicans had previously put on the table. In his initial offer earlier this month, Boehner had said he could support $800 billion in new tax revenue.

"With a relatively low price in new taxes, the strategy, if successful, would represent a tactical victory for Republicans and shift the political burden onto Democrats to make greater concessions on federal spending."

It would be useful if the piece informed readers how it determined that smaller tax increases on the rich would: "shift the political burden onto Democrats to make greater concessions on federal spending."

Those of us less familiar with the workings of Washington might think that smaller sacrifices by the rich would be accompanied by smaller sacrifices by the non-rich. Somehow the Post has determined the opposite is the case, if there will be political pressure for everyone else to accept big cuts in programs like Social Security and Medicare. It would be great if the Post could explain to readers how this works. It is unlikely that many voters think that because the rich refuse to pay more taxes that ordinary workers should agree to accept cuts in their Social Security and Medicare.