There are many reasons why we must prevent going off the cliff. Some continue to argue the poor will do better under the cliff scenario than any other. That’s not true and here are some arguments for why the poor will do better under plans such as Simpson-Bowles and Domenici-Rivlin.
Simpson-Bowles and Domenici-Rivlin plans reduce rates, but raise substantial net revenue in a more progressive way than under the fiscal cliff. Going over the fiscal cliff increases tax rates and cuts tax credits, which according to Tax Policy Center, will reduce the aftertax income of the bottom quintile by almost 4 percent, and the second quintile by over 4 percent.
The fiscal cliff does not address Social Security, which would lead to beneficiaries receiving a benefit cut of 25 percent in 2033 if no action is taken. This must be prevented and both the Simpson-Bowles and Domenici-Rivlin plans do that with a combination of new revenue and new minimum benefits which protect and in some cases enhance benefits for low-income beneficiaries.