The media coverage of the fiscal cliff misses the point so consistently, it's enough to provoke a James Carville-esque outburst to remind them: "It's the spending, Stupid." The fixation with the tax side of the equation obscures that the real solution to the fiscal cliff involves spending cuts and entitlement reform.
The interest payment on our $16 trillion debt for this year alone is $220 billion. That's enough to pay for 18 aircraft carriers, 40 million Pell Grants, 1,400 F-22 Raptor jets, or 2.4 million "Iron Dome" missiles. Instead, that money goes to our creditors while the debt grows more and more massive. By 2020, the projected annual interest payment reaches $778 billion, which is equal to the entire federal budget from 1981.
President Obama certainly knows that his proposal for $1.4 trillion in increased tax revenue will not even put a dent in the national debt. As long as the conversation remains focused on tax rates, he can get away with refusing to propose a serious plan to cut spending and reform entitlements. Democrat Erskine Bowles, who served on President Obama's debt commission and developed the outline on which the Republican plan is based, admits that tax increases would have an almost non-existent effect on our fiscal challenges. In an interview on CBS Face the Nation, Bowles stated, "Even if you raise the top rates back to the Clinton rates, that only creates about $400 billion over 10 years. That's $40 billion a year. We have a trillion dollar a year deficit."
It bears repeating that yearly deficits of $1 trillion represent a radical and recent departure from average trends. In 2007, the annual deficit was $161 billion. After his election in 2008, President Obama proceeded to preside over four consecutive years of trillion-dollar deficits. No president in history has accumulated even one deficit over $1 trillion, much less four. With that spending record, it is not surprising that the president has failed to propose significant spending cuts, but it is unacceptable given the magnitude of the budget crisis we face.
Rather than question why Republicans are fighting to maintain tax cuts, the media and the American people should be asking why President Obama is fighting so hard for tax rate increases that will have almost no positive impact on the deficit.