Congress acted slightly after the last minute tonight, with the House voting to approve legislation to avert the so-called fiscal cliff. Taxes will not go up on families earning less than $450,000. But the whole point of the “fiscal cliff” was so that Congress would be pressured into dealing with the long-term deficit. Which they did not. They just kicked the can slightly down the road to the next budget, just a few months away.
Yeah, that’s right, we get to go through this again and again.
UPDATE: Why everyone hates the fiscal-cliff deal.
18 Comments
The next time we go through this happy horseshbleep, I think we should equalize our props to the “Cheers” era. Instead of ‘fiscal cliff,’ this next one should be labelled the ‘fiscal norm.’
Andy Borowitz, as usual, sums it up: http://www.newyorker.com/online/blogs/borowitzreport/2013/01/washington-celebrates-solving-totally-unnecessary-crisis-they-created.html
Oooh, the sexual tension between the Fiscal Sam and the Fiscal Diane will be palpable.
Given the utter cluelessness of those involved, perhaps Fiscal Woody or Fiscal Coach would be more appropriate.
This reminds me of some engineers I’ve worked with. They create a crisis then get rewarded for solving it.
Is this really what human nature has become?
And, thats not all. According to ABCnews there are some imbedded “New Year” gifts totaling some 100 billion to:
$430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States. Producers can expense up to $15 million of costs for their projects.
(even after a record setting year for that industry)
$222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced in the islands and imported to the mainland
(can’t penalize those rum runners)
$70 million for NASCAR
(Keep them entertained so they don’t complain)
$59 million for algae growers
(like with global warming there won’t be enough already growing?)
http://abcnews.go.com/blogs/politics/2013/01/fiscal-cliff-deal-also-doles-out-millions-for-hollywood-railroads-rum-producers/
And of course none of it is paid for.
Stocks good today 😀 Go duckman go!
Yeah PSgt, I noticed the inclusion of those earmarks in the deal. And they claim they are trying to balance the budget. What a total farce.
Has anybody put names to the authors of these add-one? That would be interesting! They’re presumably to buy a reluctant vote???
Apparently it is coming out, although since it’s both sides doing it the mainstream media will likely ignore it. The corporate tax cut subsidies were done in a senate committee in August as the The Family and Business Tax Cut Certainty Act of 2012 and the bill got shelved until now and pasted into the cliff deal at the last minute. At least according to one source.
http://washingtonexaminer.com/tim-carney-how-corporate-tax-credits-got-in-the-cliff-deal/article/2517397#.UOTnSkko7IW
As I was saying a few weeks ago, I wish they would have just allowed us to go over the cliff…
Oops new computer. Anonymous was me, irregular poster that I am. Gave up too much leverage, threw in some pork, and left us with a new manufactured crisis to deal with in less than two months. (Plus with less leverage to work with@) What a great deal… NOT.
Also, it passed both chambers with landslide victories. What in the work were they buying votes with pork for? The Hollywood and NASCAR giveaways are particularly annoying and totally unnecessary. If we ever actually had a free market in this country I wonder what it would look like. I probably wouldn’t like it anyway.
I take that back, the most egregious late add was the extension to the “active financing exception” that will allow GE and others to continue moving money offshore in order to avoid paying any corporate income taxes. What a crock.
Agreed on the GE comment. What a crock.
PSgt, thanks for the link.
What most people don’t understand is that most of this is a political illusion. Every single thing that is in this deal is only “permanent” until the next time they vote.
The good news is that middle class tax rates didn’t go up (everyone knew they wouldn’t), 2 million people on unemployment won’t see their checks cut off, and they have stopped the annual charade of the Medicare Doc Fix and the Alternative Minimum Tax fix – which were never going to go back to where they started anyway.
The bad news is that there were billions of dollars of corporate giveaways in the bill over the next 2 years, effectively negating ALL OF THE ADDED REVENUES from the tax cuts expiring on 0.6% of the populaiton
That said – nowhere NEAR revenue is raised. Not enough (OR ANY) spending is cut. And as soon as this deal goes in, the argument begins on the NEXT deal which is the debt limit and the rest of the TAX INCREASES that we need, and spending cuts we must have – and that has only 2 months to go, what makes ANYONE think the conversation is going to get any easier?
Fundamentally the problem is simple, it is only POLITICALLY difficult:
1) Total government revenues need to rise back to historical averages (around 19% to 20% of GDP) over the next few years – and few doesn’t mean 10, it means 2 to 4. Even with these “tax increases” (actually expiration of tax cuts) the total revenue will only be about 16% of GDP. The bulk of those increased revenues MUST come from the wealthy and from corporations getting unnecessary tax breaks – but th emiddle class will eventually have to pay more as well.
2) Spending must be cut to balance the revenues – at about 20% of GDP over the next few years. Again – few doesn’t mean 10. It is currently at 24%. Those cuts must come from Defense as well as discretionary spending, they can include reduction on interest payments as long as that balances spending and revenues, and long term restructuring of Medicare, Medicaid, and education costs MUST be addressed. Note that addressing cost increases doesn’t mean cutting benefits – it means fixing the reason costs are rising too fast.
3) The GOP makes one good point – a growing economy generates more revenues without increasing tax RATES. There is NO WAY to achieve the necessary revenues on growth alone, however, because it would require growth rates more than double the highest points IN HISTORY – but growth is critical. Which means over the next few years, some deficit spending that boosts the long term economic picture IS NECESSARY. Also note this doesn’t mean pure short term stimulus, it means long term value.
So the solution is pretty simple. The details are politically difficult – because we MUST raise more revenue, we MUST cut spending, and we MUST restructure Medicare / Medicaid / Education cost growth or we will not be able to balance the budget.
The GOP is the biggest obstacle to getting this done, because they are automatically against ANY revenue increases, and automatically against ANY defense spending cuts. Democrats could be convinced to support Medicare / Medicaid / Education reform as long as actual benefits to people don’t get cut.
And thanks to that, assume the next two years will be a grueling and useless political charade until the GOP loses the House in 2014 – or until the GOP kicks the Tea Party factions to the curb and starts making real compromises. And for me personally, I WANT the GOP to make real compromises and not get kicked out – because we NEED rational conservative voices and we need to keep taxes as low as POSSIBLE and shrink government as much as POSSIBLE in the final solution. But if all they will do is obstruct, we need to kick them to the curb.
Arthanyel, I’ll vote for you!
Aww, IK *blushes* And I would vote for YOU if you ran.
That said, if I thought the best way to try and fix the system was run for office, I might try it and get more rational people to run. As it is, I think it may be too far gone to fix from inside – at least until we fix campaign finance. And maybe not even then.