Washington Post Continues Effort to Pressure Obama to Cut Budget Deal Before End of Year

November 05, 2012

The Washington Post has repeatedly used its news section (e.g here and here) to hype fears about the budget dispute that it likes to call the “fiscal cliff.” (Since the actual impact of waiting until after the end of the year to reach a deal is minor, most objective commentators would not use the term “cliff” to refer to the deadline.) If the consequences of waiting until after the end of the year to make a deal, when the politics shift to President Obama’s favor, can be portrayed as sufficiently dire then the Post presumably hopes that it can force a deal that will be closer to the Republicans’ terms.

It was pushing this line again today with a piece warning of a disaster if Congress does not pass a fix to the alternative minimum tax by the end of the year. The issue is that the tax was not adjusted for inflation for 2012 so many middle income households would be subject to the alternative minimum tax who were not intended to be hit by it.

The piece does its best to overstate the dire consequences for waiting after the end of the year. Most importantly it gives the number of people affected and then gives the average tax additional liability telling us in the second paragraph:

“Unless Congress acts by the end of the year, more than 26 million households will for the first time face the AMT, which threatens to tack $3,700, on average, onto taxpayers’ bills for the current tax year.”

In fact most of these 26 million households would face very limited tax increases, but some taxpayers may find themselves with a substantial increase in liabilities. The piece also warns that if Congress waits until after the end of the year to resolve the issue then refunds could be delayed by a month or two. It then informs readers that many taxpayers use refunds to pay essential bills like gas and electric bills and will risk having service disconnected if they have to wait longer for their refunds. Of course the refunds will go almost exclusively to families with incomes of more than $75,000 a year. It is not likely that many people in this income category are facing the cutoff of utilities.

The piece also raises the risk that many taxpayers may be subject to penalties for failing to withhold based on their higher liability. It would be a very simple matter for Congress to include a provision in any measure passed in January that exempted taxpayers from such penalties.

This is the sort of piece that makes it clear that Post would like to see the budget dispute resolved on conditions favorable to the Republicans. It doesn’t belong in the news section of a serious newspaper. 

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