Fiscal Cliff: ObamaCare and the ‘Fiscal Cliff’

How Does ObamaCare Impact the ‘Fiscal Cliff’ and What is a ‘Fiscal Cliff’ Anyway?

‘Fiscal Cliff’ ObamaCare: Does ObamaCare impact the ‘fiscal cliff’? What’s the ObamaCare ‘fiscal cliff’ discussion really about? The ‘fiscal cliff’, is the point at which the deficit gets reduced too much due to tax hikes and spending cuts set to kick in Jan 1st 2013 (potentially leading to a recession). Since ObamaCare involves taxes and decreases the deficit, it technical could affect the cliff, however the truth involves some (lots of) digging.

ObamaCareObamaCare ‘Fiscal Cliff’ Summary

A quick summary of the ‘fiscal cliff’ and ObamaCare goes something like this: Wall Street, the top 1% and politicians have dramatized a (another) financial crisis. Although it’s presented as “over spending” that actual problem is tax increases and spending cuts leading to a reduction in the deficit (low deficit is bad for a depressed economy). In order to solve the crisis, Republicans want to generate revenue by closing loopholes and tax deductions while Democrats have favored raising tax rates on wealthier Americans.

Behind the scenes the ‘fiscal cliff’ crisis works more like this: “deficit scolders” (Wall Street Elite who cry immediate debt crisis, despite 0% historical or factual evidence) want to cut public programs like ObamaCare, Social Security and Medicare to lower tax rates. By pointing fingers at social safety net programs they can avoid the real solution, a tax on Wall Street (helps to free up a large portion of the nations wealth which sits on the sidelines), while at the same time helping big corporations to beneficial tax cuts (at the expense of the lower and middle-class). You can literally trace the whole thing back to Peter G. Peterson a wall street billionaire (more below).

In Congress ObamaCare is being used as bargaining chip against the Bush tax cuts for the 2%. ObamaCare in fact has little to nothing to do with the ‘fiscal cliff’ solution, but is an easy way to divert the publics attention from the confusing but very important real issues facing our country.

What is the ‘Fiscal Cliff’ Anyway?

The ‘fiscal cliff’ refers to the effect of a number of laws which, if unchanged, could result in tax increases, spending cuts, and a corresponding reduction in the budget deficit starting in 2013. The President and the US Congress are in talks right now as to a plan of action. Solutions involve one scenario where we have lower deficits and debt, but also have lower spending and higher taxes, while another solution means higher deficits and debt but lower taxes and higher spending.

The details and implications of cuts are complex, but for the purposes of ObamaCare the answer is clear; although ObamaCare’s new taxes are a factor, studies have shown that it actually helps control the $2.6 trillion healthcare systems cost to the federal government, while repealing the law would cost over $100 billion.

It’s worth noting that the ‘fiscal cliff’ is more of a ‘gradual slope’, as the implications are not immediate but gradual over the course of the year, meaning the ‘fiscal cliff’ isn’t as much of a cliff as it is a scare tactic. That’s the simple answer to the question, “What is the ‘fiscal cliff'”? Of course the politics behind the cliff are much more complicated, so let’s find out who is scaring us and what the real deal is here.

Where Did The ‘Fiscal Cliff’ Come From?

In an agreement to end the debt-ceiling debate in summer of 2011, Congress “strapped a bomb” (Billions in mandatory discretionary spending cuts timed to at the same time number of tax cuts were set to expire) to the economy set for Jan. 2013. After passing up chances to disarm the bomb for the past year, the obvious has happened. We are up against the cliff and now have to deal with it or watch as the bomb pushes the economy off a $600 billion “fiscal cliff.”

The Truth Behind the ‘Fiscal Cliff’, Peter G. Peterson and the “Deficit Scolds”

The truth behind the ‘fiscal cliff’ and ObamaCare: A wall street billion are named Peter G. Peterson heads a slew of investment bankers, hedge fund managers, organizations, etc (vocal members of which are called “Deficit Scolds”) and uses billions to go after public programs that help the poor and middle class (Social Security, Medicare, ObamaCare).

It would be in your best interest to question any politician who wants to go after public programs, all you need to do is google it and follow the money. It’s easy, but only some of us will do this, it’s up to those people to help spread the truth.

The concept: use scare tactics and confusing economic issues to push agendas that affect the social safety net, for profit on Wall Street. If you have doubt you can look below and notice that Wall Street isn’t even mentioned as a way to control this financial crisis or any other financial crisis in recent history, although it’s usually at the root of the problem.

Quote from the Peter G. Peterson Foundation: “The long-term challenge: America’s fiscal path is unsustainable by any measure. As the population ages and health care costs continue to grow rapidly, spending on Medicare, Medicaid, and Social Security will climb, but revenues will not keep pace. If left unaddressed, federal government debt will soar well beyond sustainable levels and harm economic growth.” The Fiscal Cliff and Beyond PDF

When it comes to ObamaCare and the ‘fiscal cliff’ everyone should know: “ObamaCare” is a public program that is under attack in order to spend less government money on low to middle income Americans in an effort to privatize or repeal those programs (which benefits big business and Wall street). The only way in which ObamaCare actually impacts the cliff is by bringing in more tax money and decreasing the deficit. Which is bad for the cliff, although opponents of the law are framing their argument as, “ObamaCare costs too much money and raises the deficit so it is bad.” Which is the opposite.

The bottom line is ObamaCare isn’t the root of the solution. Although a small tax on Wall Street, a solution for free up the majority of the money in the US which is held by a small fraction of the 1%, would solve the crisis.

The ‘Fiscal Cliff’ and ObamaCare Taxes

Regardless of what Wall Street loyalists are involved with our political system, congress is in charge of the talks, and that means the talks about ObamaCare and the ‘fiscal cliff’ rest in the hands of Democrats and Republicans.

Since ObamaCare became the “law of the land” Republicans have been unable to continue their efforts to flat out repeal the health care law. John Boehner said they must, “change their tactics” in regards to repealing the law. The current tactic seems to be chipping away at the law via the ‘fiscal cliff’ deficit negotiations.

John Boehner Says ObamaCare Stays on the Table for ‘Fiscal Cliff’ Talks

John Boehner says this about the ‘fiscal cliff’ and ObamaCare, “We can’t afford (ObamaCare)… That’s why I’ve been clear that the law has to stay on the table as both parties discuss ways to solve our nation’s massive debt challenge.” (We are sure he meant to say, “ObamaCare reduces the deficit too much and brings in too much tax payer money. Of course that would confuse people.”)

Republicans seem to take every opportunity to repeal ObamaCare, whether it’s the cost, it’s affect on small business or the idea that it’s going to kill your grandmother, no claim is too outrageous. Often these claims aren’t based on facts. The truth on the ‘fiscal cliff’ and ObamaCare is that while the bill has room for improvement, it’s not a ‘make-it-or-break-it’ factor in creating a plan to avert Januaries tax hikes and spending cuts “challenge”.

It’s worth noting that the parts of the ObamaCare bill that need improvement are not the parts Republicans want on the table for the ‘fiscal cliff’ talks. The real target is subsidies intended to help lower income Americans purchase health insurance. Low-income Americans were also targeted at their last effort to chip away at the bill, the NFIB v. Sebelius supreme court ruling where states were granted the opportunity to opt-out of Medicaid Expansion. Other targets include funding for oversight committees.

Analysts say the most likely reason for, “putting ObamaCare on the table,” is for Republicans to use ObamaCare as a bargaining chip to keep the Bush tax cuts for the top 2% in place. Unfortunately the bush tax cuts alone won’t solve the problem either.

Let’s take a look at what is actually on the table to solve the ‘fiscal cliff’ issue aside from ObamaCare.

Which Factors May Contribute To the ‘Fiscal Cliff’ Aside from ObamaCare?

ObamaCare is only one of the laws that involved tax increases and spending cuts. Here are some of the other laws that are contributing to the ‘fiscal cliff’:

• The Extended Bush Tax Cuts in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010

• Spending Cuts directed by the Budget Control Act of 2011

• Reversion of the Alternative Minimum Tax Thresholds to 2000 tax year levels

• Expiration of measures delaying the Medicare Sustainable Growth Rate Extended by Middle Class Tax Relief and Job Creation Act of 2012

• Expiration of the 2% Social Security payroll tax by Middle Class Tax Relief and Job Creation Act of 2012

• Expiration of federal unemployment benefits extended by Middle Class Tax Relief and Job Creation Act of 2012

• New Taxes imposed by ObamaCare

You’ll notice that middle class tax cuts, job creation, Social Security, Medicare and ObamaCare are on the table, while any sort of reform to Wall Street or tariff on the oil industry, cutting payroll taxes and corporate taxes, reducing spending on defense, or tax benefits for home mortgages, employer-provided health insurance, 401(k) savings plans, charitable donations, etc are not on the table. They may not be kicking in on the 1st, but the could help solve the “crisis”.

Avoiding the ‘Fiscal Cliff’, President Obama on the ‘Fiscal Cliff’

Much of the issues involved can be avoided through a reduced spending both defense and non-defense discretionary spending. There have been many other suggestions to avoid the cliff. Avoiding the cliff involves congress coming together sooner or later. This depends on Republicans willing to come to reasonable agreement, however President Obama has promised to veto any attempt to bypass the cliff that does not include expiration of tax cuts for the wealthy. President Obama has also taken a very firm stance that ObamaCare isn’t on the table for the talks. For the purposes of ObamaCare Facts, protecting ObamaCare from outside interests is enough.

How ObamaCare Can Help Avoid Recession

ObamaCare doesn’t just add new taxes, the reforms contained within Obamacare include measures designed to contain the costs of America’s $2.6 trillion healthcare system, the most expensive in the world. Dismantling key pieces of the program, something republicans have tried to do over 30 times, isn’t going to stave of a recession.

While ObamaCare does lower the deficit and levy new taxes, it’s not a starter for the ‘fiscal cliff talks’. Julie Barnes, director of healthcare policy at the Bipartisan Policy Center, has said (regarding ObamaCare and the fiscal cliff), “the costs associated with getting the ObamaCare in place pales in comparison to far greater costs of tax and spending issues lawmakers are dealing with.”

What ObamaCare Really Costs the Government and Taxpayers

We cover the cost of ObamaCare extensively on our site from personal costs, to tax payer costs to the cost on federal and state government. The fiscal implications boil down to this, some industries and high-income businesses and individuals will pay more taxes, that along with billions in cuts raises most of the money to pay for the bill.

Expanding coverage means 30 of 44 million uninsured Americans will get access to health care. Those who don’t purchase health care and can afford it pay an income tax increase, which helps pay for the program (1 of 21 tax increases, most of which are on large businesses and the top 2% of Americans). Overall ObamaCare is projected to lower premiums, reduce government costs and raise trillions of dollars for our government.

ObamaCare will not push us off the ‘fiscal cliff’, although ObamaCare does help reduce the national debt and the deficit. Of course depending on the solution the impact of ObamaCare on the ‘fiscal cliff’ could vary.

The Impact of the ‘Fiscal Cliff’ talks on ObamaCare

Most likely the discussion about the ‘fiscal cliff’ and ObamaCare will result in nothing more than stale-mate and convenient excuse to put off any solutions. The Fiscal implications of ObamaCare aren’t what we need to be focusing on economically. We need to continue to focus on military spending, wall street, the banking industry, and the bush tax cuts instead of looking at the one industry getting the reform it needs. Now that you have the facts on the ‘fiscal cliff’ and ObamaCare it’s up to you to help spread the truth.


ObamaCare and the Fiscal Cliff

Author: Thomas DeMichele

Thomas DeMichele is the head writer and founder of,, and other websites. He has been in the health insurance and healthcare information field since 2012. is a...

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