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Democrats have been so fixated on their "tax the rich" refrain that they have failed to crunch the numbers. That can be the only answer as to why they haven't put out a serious budget proposal that tames out-of-control entitlement spending. From Huffington Post:
"First, despite the claims that the president supports a balanced approach, Democrats have yet to get serious about real spending cuts," Boehner said. "And secondly, no substantive progress has been made in the talks between the White House and the House over the last two weeks."
"It's very clear what kind of spending cuts need to occur," he added. "But we have no idea what the White House is willing to do."
Harry Reid says that they've made a proposal and they're waiting for a response. The problem, of course, is that the proposal is simply "raise taxes on the rich." Which, as I've detailed at length, leaves us with a sizable funding gap for the extreme spending that is left unchecked.
The overrun of the fiscal cliff could be more severe for lower-middle class families than previously expected just because of simple ignorance of the nature of the problem. From CNBC:
One of the key questions lurking in the "fiscal cliff" talks — though well below the public's radar — is what happens to the alternative minimum tax, or AMT.
Implemented in 1969 to make sure upper-income Americans pay their share of taxes, theAMT has increasingly snared more middle-income Americans over the years because it was never indexed for inflation.
During the 2011 tax year for example, the AMT hit single taxpayers with incomes as low as $48,450 and joint filers making only $74,450.
But millions more Americans could be subject to the AMT in their 2012 returns if Congress fails to reach a deal on the fiscal cliff before year-end. That's because the AMT is currently scheduled to hit individuals making as little as $33,750 a year and joint filers making $45,000. (Read More: Complete Coverage of 'Fiscal Cliff')
"I call it AMT shock," Dick Hoey, chief economist at BNY Mellon, told CNBC recently.
That is a lot more people taking an unexpected kick in the junk--a crippling change--than we originally though.
This is going to have a December 24th resolution, or stall where the deadline is pushed off for a few months. But serious entitlement, budget and taxation reform must be undertaken. Sadly I don't think many in Congress have the stones to do the work that needs to be done.