The battle over the US deficit is not over yet

Obama puts tax rises back on the table - but will his words be matched with action?

 

In the aftermath of a last-minute deal to raise the US debt ceiling, Barack Obama has hinted that tax rises may be back on the agenda.

The immediate crisis of the US potentially defaulting on its debt was averted with a last minute deal, but politicians on both sides of the debate are still unhappy. Much of the attention has been focused on the intransigent Tea Party faction of the Republican Party, but it would be wrong to under-estimate the anger among Democrats.

Many feel that Obama capitulated far too much ground, agreeing to huge scale cuts in public spending.

While Republicans have insisted that the deal does not include tax rises, Obama said in a short statement that the national debt could only be reduced through a combination of spending cuts and tax rises, particularly for big corporations and the very wealthy. In a return to the rhetoric he entered the debt battle using, he said:

Everyone is going to have to chip in. That is only fair. That's the principle I'll be fighting for during the next phase of this process.

And fight he will have to, if he wants to get tax rises through. His attempt to end the Bush-era tax cuts last year triggered outrage and - once again - he relented, agreeing to extend them until 2012. Ending these enormous tax cuts is the obvious way to reduce the deficit (you can see here how much they contributed to the country's huge debt), but Obama may yet decide it is too risky so close to an election.

Putting tax rises back on the table in as serious way will reignite the ideological battle that brought America to the brink of default this week.
Indeed, many Republicans remain dissatisfied with the current deal, arguing that its spending cuts do not go far enough. Many Tea Party activists still oppose it, even though that their representatives successfully pushed the entire debate far to the right despite controlling less than half of one House ("I hate the deal," said Andrew Hemingway, chairman of the Republican Liberty Caucus of New Hampshire)..

Obama has already eloquently argued that those most able to pay should do their bit for deficit reduction, at the start of this battle. There is a clear ideological case to be made at the next election: that tax cuts for corporations and the super-rich should not be maintained at the cost of healthcare for pensioners. However, if his words are not matched by confident, decisive action, there is no point in reopening the debate. He has a lot of work to do if he is to shore up support among his own support-base, let alone the country at large.

 

Samira Shackle is a freelance journalist, who tweets @samirashackle. She was formerly a staff writer for the New Statesman.

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The beggar used to be friendly – now he was ranting at everyone

What was I doing, dismissing him with maximal curtness – and not caring?

The first beggar was walking but still wretched. Probably in his early twenties, clearly ravaged by more than just alcohol, he made a beeline for me, as if he had an appointment. He was not to know that I was in a mood from hell, though the look on my face would have told him, if he’d been in any kind of state to register it.

“Excuse me, have you got 10p for…”

“No.” And I walked on.

Why? I am almost invariably a soft touch for this kind of thing. But as I said, I was in the foulest of tempers.

Also, this was East Finchley. For those who do not know London, East Finchley is a northern suburb, which at one end hosts the wealthiest street in the country – the Bishops Avenue, where multimillionaires tear down houses and erect new ones even uglier than those they have replaced – and at the other end a typically seedy, dull collection of terraced houses.

The main supermarket is Budgens, a name so ungainly that it could only have belonged to a real person, either too proud or unimaginative to think of something else.

But what, I asked myself, was someone this wretched doing in East Finchley? And what was I doing, dismissing him with maximal curtness – and not caring?

The second beggar, further up the street, I met the next day: much older and clearly mad, rather than chemically poisoned. He asked how I was doing.

“Not so well, as it happens,” I replied.

“Would you like me to say a prayer for you?”

“Why not?” I said, and he placed a clenched fist to my forehead and made a brief incantation, something like an exorcism, and then kissed the large white plastic crucifix hanging from his neck.

I half-expected to feel a jolt of faith, some kind of divine restructuring. This time I gave him money: a pound coin and a 50p coin. But then later I thought: why didn’t I give him more? I’d been doing some tidying earlier and had retrieved a heavy pocketful of change; I could have given him a generous handful.

The third beggar was in Shepherd’s Bush. I knew him from the days when I lived there: a skinny, middle-aged guy who would occasionally stop and rant in a friendly way at me, just sane enough not to ignore. That was ten years ago. Now he was raging at everyone, accusing the teenagers queueing in the kebab shop of being batty boys and saying “bloodclaat” a lot. (Batty boy: homosexual. Bloodclaat: tampon.)

The people he was addressing knew perfectly well what he was saying. They shrugged it off. I got on the bus; so did he, and the whole bus knew about it. There was nothing friendly in him now, and I wondered through which hole in the increasingly threadbare welfare safety net he had been allowed to slip.

That’s it, I thought. I’m getting out of London, its pampered core oblivious to the surrounding anguish. The world in a nutshell. Luckily, my great friend S— had asked if I could cat-sit for her in Brighton. I know her cat, and I know Brighton. Also, I know about a dozen people there who I keep meaning to see, so why not? London was making me ill, and possibly a bad person. So S— invited me down a couple of days before she was due to go on her holidays, and I took the first train I could.

And now I find myself sitting on a sunlounger in a tiny backyard, in a charming house just abutting the North Laine, and the mood is palpably different to the capital’s. It is like a city ought to be: compact, diverse and funky. There is no reek of High Capitalism. It is healthily decadent. It would appear to be full of people who have rejected the idea of London. It still has an enormous number of beggars, but more people were dropping money for them than I ever saw do so in W1, W12 or N2.

So this is what it’s like to fall out of love with the city of one’s birth. What most surprised me was the speed and force with which it happened. I’d made my mind up over a nice lunch that my friend N— was buying me, to cheer me up.

“Don’t you have to stay in London? You know, for book launches and things like that?”

“I don’t go to fucking book launches any more,” I said. I was taken aback by the vigour of my reply. I’m only here for ten days but I have plenty of people to see and dozens of memories, all good, to bump into. I’m already feeling better. 

Nicholas Lezard is a literary critic for the Guardian and also writes for the Independent. He writes the Down and Out in London column for the New Statesman.

This article first appeared in the 14 September 2017 issue of the New Statesman, The German problem