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 Understanding the Fiscal Cliff (In 2 Minutes 30 Seconds)

Video Robert B. Reich:

Democrats, here are eight principles to guide you in the coming showdown over the fiscal cliff:

Posted December 05, 2012

  • ONE: HOLD YOUR GROUND. The wealthy have to pay their fair share of taxes. Thatís what the election was all about, and we won. Itís only fair they pay more. Theyíre taking home record share of national income and wealth, and have lowest effective tax rate in living memory.

    TWO: NO DEAL IS BETTER THAN A BAD DEAL. Youíre in a strong bargaining position. If you do nothing, the Bush tax cuts automatically expire in January, and we go back to rates during Clinton administration. Which isnít such a bad thing. As I recall we had a pretty good economy during the Clinton years.

    THREE: MAKE REPUBLICANS VOTE ON EXTENDING THE TAX CUTS JUST FOR THE MIDDLE CLASS. After all the Bush tax cuts expire, have Republicans vote on an extending the Bush tax cut just for the middle-class. If they refuse and try to hold those tax cuts hostage to tax cuts for the wealthy, it will show whose side theyíre on. Theyíll pay the price in 2014.

    FOUR: DEMAND HIGHER TAX RATES ON WEALTHY, NOT JUST LIMITS ON DEDUCTIONS. Donít fall for Republican offers to limit some tax deductions on the wealthy.  Demand we go back to higher tax rates on the wealthy and eliminate their unfair tax loopholes, so they truly start paying their fair share.

    FIVE: DONíT CUT SAFETY NETS. Donít sacrifice Medicare or Social Security, or programs for the poor. Americans depend on these safety nets and canít afford any benefit cuts.

    SIX: DONíT CUT INVESTMENTS IN OUR FUTURE PRODUCTIVITY. Education, basic R&D, and infrastructure arenít spending; theyíre investments in our future prosperity. If the return on these investments is greater than the cost, they ought to be made, period.

    SEVEN: CUT SPENDING ON MILITARY AND CORPORATE WELFARE. You want to cut, cut spending on the military ó which now exceeds the military spending of the next 13 largest military spenders in the world combined. And cut corporate welfare ó support to agribusiness, oil and gas, Big Pharma, big insurance, and Wall Street.

    EIGHT: PUT JOBS BEFORE DEFICIT REDUCTION. Finally, Donít cut the budget deficit as long as unemployment remains high. Otherwise youíll cause the economy to contract, making the deficit even larger in proportion. Thatís the austerity trap Europe has fallen into. We need to create American prosperity, not European austerity.

    Remember: Jobs come first.

    Robert B. Reich, Chancellorís Professor of Public Policy at the University of California at Berkeley, was Secretary of Labor in the Clinton administration. Time Magazine named him one of the ten most effective cabinet secretaries of the last century. He has written thirteen books, including the best sellers ďAftershock" and ďThe Work of Nations." His latest, "Beyond Outrage," is now out in paperback. He is also a founding editor of the American Prospect magazine and chairman of Common Cause.

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