The default option in Washington right now is for the House to “break the emergency glass with the red fire ax” and pass the Senate’s bill that extends the Bush tax cuts to the middle class. Even if the House doesn’t do that, Treasury Secretary Geitner says he will rewrite the tax tables to make it so.
(Which begs the question, why should the House even pass the bill in the first place?)
Extending all the Bush tax cuts on everybody will cost about $250 billion a year. Taxes on the wealthy are about $85 billion of that. So extending the Bush tax cuts on the middle class will add $165 billion to the debt. That’s the most that anybody in Washington expects will happen by January 1st.
The total value of the fiscal cliff is roughly $600 billion. Even if this bill is passed, that still leaves a $435 billion hit to the economy. Most of this will high top wage earners, but everybody will feel the pain. Jobless benefits will expire, the payroll tax holiday will go away, and so forth.
Sequestration is the last thing in anybody’s mind right now. Bah! That’s a mere $65 billion. That’s only 2 million jobs.
Humbug, who’s worried about 2 million jobs?
Chart courtesy of the Tax Foundation.
