President Obama’s deficit reduction plan is likely to take a razor to the US social safety net. AAP

“Fiscal cliff. Grand bargain. Shared sacrifice.

“The buzzwords on Capitol Hill this December tell a dramatic story. The United States, hurtling toward an unavoidable economic disaster, can be saved only if Republicans and Democrats join hands to bring balanced austerity to the American people.

“As Vice President Joe Biden would say: what a bunch of malarkey.

“The fiscal cliff is a wholly unnecessary – and easily avoided – crisis. The grand bargain aims to fix deficits when unemployment, low consumer demand, and sluggish growth are America’s most pressing economic problems.

“And that shared sacrifice? It falls almost entirely on economically vulnerable Americans: women, the poor, the aged, and the ailing middle class. In exchange for cutting programs for these groups, the wealthiest 2% of Americans (households earning more than $250,000 a year) would see their taxes return to Clinton-era levels. That is, the top marginal rate would rise from 35% to 39%.

“It’s a bargain — a grand one indeed — if you’re a top-income earner. Since the recovery began in early 2009, business has been booming for the top 5%. And the closer you are to the top, the faster your income has grown. Since the recovery began the top 1% of Americans have captured 93% of income growth.

“For everyone else: stagnation. In the past five years, the median household income in the United States fell to $50,054 from $55,198, continuing to tumble even during the first few years of the recovery.

“The grand bargain threatens to make the situation worse. A columnist for the New York Observer called it “a prescription for … .”

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