The Screw Deal: Debt-Ceiling Pact Yet Another Hosing Of Americans

By Manifesto Joe

The American people have taken so many hosings over the past 30 years, it's gotten to where most folks don't know they are having it done to them, let alone who's on the spraying end of the hose. House Minority Leader Nancy Pelosi, who held her nose and voted for the deal to raise the federal government's debt ceiling, commented that not one cent of this "compromise" was coming from the wealthiest Americans. (That's a pretty strong hint about who's on the spraying end.)

Call it The Screw Deal, Part III. Since there aren't very many specifics, the effects of Part III won't be known for a couple of years. Rest assured that if a Republican -- any Republican -- wins the White House next November, and Republicans also win control of the Senate and retain control of the House of Representatives, this will be perhaps the biggest hosing of them all.

This deal leaves the door open for meat-ax cuts in Social Security, Medicare and Medicaid. Will somebody please tell me exactly what role the elderly, the poor and the sick played in getting the U.S. mired in two foreign wars that the rich paid not one cent in extra tax to finance?

For those among us who understand what's happening, this has been a lot like sitting at a train crossing in your car, waiting for a very, very long train to finally pass. The caboose just never seems to arrive, after scores of cars have slowly passed.

Reagan and the first Screw Deal

During the protracted "debate" about the debt-ceiling deal, there was a lot in the Mainstream Media about the alleged wit and wisdom of Ronald Reagan, and how neither party seemed to be remembering moves from the Gipper's playbook. Au contraire -- the Republicans have been following that playbook for 30 years, and with astonishing success at the polls.

Reagan presided over the first Screw Deal in phases during 1981-86. The first year, he got tax cuts passed that dramatically reduced the burden on his rich friends and the big corporations. Oh, well, he did toss a bone to everyone. Here's a quick summary of the Kemp-Roth tax cuts from Wikipedia:

Included in the act was an across-the-board decrease in the marginal income tax rates in the U.S. by 23% over three years, with the top rate falling from 70% to 50% and the bottom rate dropping from 14% to 11%. This act slashed estate taxes and trimmed taxes paid by business corporations by $150 billion over a five year period.

Then, the very next year, the supply-siders had to pull back from some of their initial commitments with what has been described as the biggest tax increase in U.S. history. Still, the deficits started, and they were at record levels for that time.

In 1983, Reagan signed off on an increase in Social Security payroll taxes. Now, it was nice in a sense that this action has kept the system going in the 28 years since. But please note that Social Security taxes are regressive -- they are cut off and maxed out after a certain level of income. It is a burden that is largely borne by middle-income people.

Then, in 1986, Reagan presided over tax "reform" that, while plugging a few loopholes, also cut the top tax rate all the way down to 28%. The Screw Deal, Part I, was complete.

The years of Bush the First and Bill Clinton slowed and mitigated some of The Screw Deal's effects, with tax increases passed under both. In particular, the Clinton economic plan that barely passed in 1993 raised the marginal tax rate back up to 39.6%, and those record deficits started shrinking until they had turned into record surpluses by the time Clinton left office.

(Of course, Republicans can't let Clinton have credit for anything, so they now say that the Internet "bubble" of the late 1990s worked heavily in Clinton's favor, and perhaps it did. But he delivered the first balanced budget the country had seen in 30 years, and that's a fact they can't reasonably deny.)

Il Doofus and the second Screw Deal

In 2001, the first year of his stolen presidency, Il Doofus got a tax cut passed that once more lowered the top rates for his rich friends. Oh, and again, he tossed everybody a bone, with those $300 rebates and such. Wow.

By the very next year, Il Doofus was responding to the 9/11 attacks like a true bozo, by moving toward an invasion of Iraq to depose of one of Al-Qaida's worst enemies, Saddam Hussein. No tax increase was proposed to help pay for this needless bloodbath. I think what Doofus & Co. thought was that an Iraq conquest was going to be easy. So far, it has cost nearly $800 billion.

What we kept hearing, starting with Reagan and then throughout the Il Doofus administration, was that keeping taxes lower on rich people and big corporations was supposed to stimulate employment through the resulting investment. Somehow, this proposition doesn't appear to work in practice. If it did, we should now be literally awash in swell new jobs for our 9%-plus unemployed. Hey, I'm still waiting for my "trickle-down" from the first time. (Always felt more like "tinkle-down" to me.)

So now, after eight long years of Il Doofus, Barack Obama inherits two unpaid-for foreign wars, a tax system in which two-thirds of U.S. corporations pay zero income tax, and record deficits. Republicans are blaming him, with MSM stooges like CNN's Don Lemon sitting there like burros while these fools say Obama has been spending money insanely for two-and-a-half years. (Lemon failed to point out to a Republican talking head that Obama inherited from Il Doofus the first budget he presided over. The job of journalists is to present the public with facts, not just to sit and allow specious rhetoric to go unchallenged.)

Exactly how much is Obama to blame for The Screw Deal, Part III?

It's easy to understand the frustration with Obama that's coming from the far left -- well, what there is of "the far left." It looks like millions of people turned out in 2008 to vote for a guy they thought would be Dennis Kucinich. Instead, he turned out to be a Bill Clinton-style Republicrat. (I hate to break it to y'all -- but that's exactly why Clinton became president, and why Kucinich didn't and never will.)

I'll argue once more that Obama has simply done what was politically necessary. He believes that it's often wiser to compromise today and thereby live politically to fight another day. He couldn't afford to just dig in and preside over a debt default, because then, House Speaker Orange Julius & Co. would blame him, and it likely would have stuck.

And, like him or not, Obama appears to be the only thing standing between Americans and those meat-ax cuts in Social Security, Medicare and Medicaid. I don't like the fact that he left the door open for such cuts -- but I don't think that, privately, he likes being the guy who signed off on that deal.

A lot will hinge on what happens next year. I'm not particularly happy with Obama, either, but when one considers the likelihood of a Congress with both houses controlled by Republicans in 2013 -- well, it looks like he's what we've got. And he can't do anything without votes.

Stay tuned.

Manifesto Joe Is An Underground Writer Living In Texas.