Congress came within sight of the so-called "fiscal cliff" and blinked as the New Year dawned. The Senate overwhelmingly approved legislation that averted a tax hike for millions of middle-class Americans and the House grudgingly followed suit.
The good news is that Democrats and Republicans apparently can compromise when their backs are pushed to the wall. The bad news is that many of the fiscal challenges confronting Congress haven't been resolved at all, but merely kicked down the road, which appears to be Washington's preferred option in dealing with serious problems.
While President Barack Obama and the Democrats can say they delivered on their promise to maintain a tax break for the middle class -- although it is difficult, by any standard, to describe someone earning $450,000 per year as middle class -- and Republicans can be spared the political fallout that would have resulted had tax rates increased across the board, much was left undone. The massive cuts in spending for defense and domestic programs that would have been triggered automatically have merely been deferred for two months and the federal debt ceiling again looms as a potential crisis.
Nothing has been done to make any significant reductions to the deficit. According to the Congressional Budget Office, the legislation will add nearly $4 trillion to federal deficits over the next decade compared with what would have happened had all the tax cuts expired.
The "compromise" reached by Congress will boost tax rates for the wealthiest of Americans from 35 percent to 39.6 percent; taxes also will increase on income from dividends, capital gains and inheritance. While that apparently signals an end to the "no new taxes" mantra that has been gospel for most politicians for more than a decade, there appears to be little resolve to tackle overall spending, despite political lip service to debt reduction. As David Brooks of the New York Times put it, "Many voters have decided they like spending a lot on themselves and pushing costs onto their children and grandchildren."
We put the cost of two wars on a national credit card, and the bill is coming due 10 years after our involvement in Afghanistan and Iraq began. Entitlement spending continues to spiral, but Social Security and Medicare remain the political third rail -- untouchable at high risk of political peril. Defense spending also remains a sacred cow, despite the fact that a serious case could be made for a reduction in military spending as our wartime footing diminishes. While many in Washington talk about the need for cutting the budget, precious few have the will to follow through on it.
The president essentially declared victory Tuesday night and flew back to his vacation in Hawaii. Congressional leaders on both sides of the aisle congratulated themselves for averting fiscal mayhem. Millions of Americans won't see their taxes go up. Renewed recession has been averted.
But all isn't well. Another fight over the debt ceiling is likely within a few months, bringing with it talk of government shutdowns and default. The last time that happened, in 2011, Republicans demanded spending cuts as a condition for extending the debt ceiling -- creating the fiscal cliff Congress faced on New Year's Day. The so-called solution could end up coming full circle. And meanwhile the deficit continues to mount.
Con_Bill wrote: "What has been done to future generations is an outrage." >> Reagan did it and he's your Hero. And the conservative didn't seem to have a problem with borrowing money from China for two wars. The Bush Era Conservative Congress never met an expenditure they didn't like. Then there was that little crash, and now it seems the only problem the Conservative has is paying for the situation they themselves were very active in creating. I guess the Conservative wants free things.
What has been done to future generations is an outrage. Those who have no voice in this matter are stuck paying the price. Those of you who claim to be concerned about the poor and homeless should be screaming the loudest for DC to balance the budget and stop throwing future generations earnings down the tubes.
OMG AGAIN!!! This ChildofGod is a class act hypocrite, the child post in another article, "By the way, you don't know me" "So your statements below are based on your assumptions which illustrate your bigotry."
Talk about a kettle calling the pot black. True conservative to the bone til the end.
OMG!!! I am being accused of supporting irresponsible spending. From someone claiming to be a child of god nevertheless. Wow! The idiocy of these people is mind-boggling to say the least.
No wonder this opinion piece is unsigned. The writer closes with "And meanwhile the deficit continues to mount.". The actual * DEFICIT * continues to decrease and is at its lowest point since Obama took office. It's the * DEBT * that continues to mount. I guess if I was spinning that kind of misinformation I too would leave it unsigned.
Really ChildOfGod? Where did I mention I support irresponsible spending? Thats the thing about the TeaBaggers and their humiliating defeat of November 6th. They want to pretend its all about taxes and spending and "free things" because those are simple concepts they can easily grasp. They refuse to realize they went down in defeat because ... the Earths 6000 years old? Legitimate Rape doesn't result in pregnancy? Ryan stating **** force his Catholic Beliefs on us Protestants? Slash Medicare which is still funded and in the black but dramatically increase military spending against the wishes of the Pentagon? ... its this last one that makes the assertion of "support irresponsible spending" nothing but a Joke! So come on ChildOfGod, look inside yourself and tell us whats really going on in your soul.
So you support irresponsible spending that is more than our income! You support burdoning our children with our debt! Grow up and pay your own way. You remind me of a drug addict who blames everyone else for her problem, but keeps asking for money so she can do more irresponsible stuff. Are you a part of the solution? It looks like you, Trawl and IYF, are a part of the problem.
Geez AMT, I wish you people would quit with the Revisionist History. Also, this "Fiscal Cliff" situation was created by the Republican because the Republican couldn't conceive Obama winning a second term. Then the Republican ran Romney-Ryan (you can't be freaking serious, thats the best you got?) and lost the election that was theirs to lose. The RepubliBagger needs get over it. OTOH watching the Republican party self destruct is somewhat satisfying.
AMT_ *NEWS FLASH* the election is over. Get on board or go drown yourself.
Democrats created the fiscal cliff when they refused to make the Bush tax cuts permanent a decade ago. Now the Democrats have relented and made them permanent for those making less than $400K. Spending and the deficit are out of control because of Obama and Democrats, not because of "two wars" (both of which were approved by Democrats who controlled the Senate, by the way).