Has the Republican Leadership on Capitol Hill Walked Off the (Fiscal) Cliff?

Posted on Jan 2 2013 - 4:28pm by Harrison

The so-called “Fiscal Cliff” that America faced on December 31, 2012 was really just another symptom of a bi-partisan leadership failure in Washington, D.C.  However the biggest damage to the last minute deal that was signed could be to the Republican leadership, specifically John Boehner.

Obama got his tax increases, although they weren’t as much as he wanted.  Despite the tax increases being only a partial victory, individuals earning over $400,000.00 per year and couples earning over $450,000.00 per year will see their taxes increase from 35% to 39.6%.

The tax increase is expected to produce $600 billion per year – if reported incomes don’t decrease – which is, sadly, a drop in the bucket towards getting the nation back on a healthy financial basis.

So what was the point?

Obama making a campaign point about “fairness.”

And since most of Washington has been tied up regarding whether taxes should be raised, injecting all this fiscal uncertainty just to make a point about “fairness” seems very immature.

Obama wants more of your money:

We can’t simply cut our way to prosperity.

And the end result, according to the Congressional Budget Office, is $1.00 in cuts for $41.00 in spending.

And many Republicans supported this bill in the House and the Senate.

There were some exceptions to Republican support.  Marco Rubio, Eric Cantor, and Majority Whip Kevin McCarthy didn’t vote yes.

Payroll taxes are also increasing which means that 77% of Americans will have the Government take more of their money from their paychecks.  The LA Times estimated that will wipe $115 billion of discretionary spending out and, combined with the other tax increase:

Michael Feroli, chief U.S. economist at J.P. Morgan Chase, cautioned that the deal is a stopgap measure at most.

“What’s challenging is that we’re still going to have some slowing in growth because of the tax hikes,” said Feroli, who estimated Tuesday that the deal will subtract 1 percentage point from already meager growth. “What’s not good is that deficits are still going to be large and it doesn’t begin to touch the longer-term horizon.”

Obama said he’d raise taxes – and he did along with the help of many Republicans.

What happened.

What happened.

3 Comments so far. Feel free to join this conversation.

  1. LD Jackson January 3, 2013 at 1:28 AM -

    Not only is this a tax increase, Obama has made it clear he will be looking for more tax increases in the future. In one of his speeches this week, after it became clear tax increases were going to be part of the fiscal cliff deal, he made this statement.

    If Republicans think that I will finish the job of deficit reduction, through spending cuts alone — and you hear that sometimes coming from them — sort of, after today we’re just going to try to shove only spending cuts down, you know, well — shove spending — shove spending cuts at us, that will hurt seniors, or hurt students, or hurt middle-class families without asking also equivalent sacrifice from millionaires or companies with a lot of lobbyists … if they think that’s going to be the formula for how we solve this thing, they have another thing coming.

    He isn’t finished raising taxes and we can fully expect him to fight any and all spending cuts, unless they are in defense.
    LD Jackson recently posted..Fiscal Cliff Deal Close – Spending Not Included

  2. Steve Dennis January 3, 2013 at 2:58 AM -

    Not only are taxes going up for most Americans, but Obama also insisted that billions of dollars of tax breaks for Hollywood, green energy companies, and rum manufacturers be included in the bill and the Republicans went right along. Today we will find out if Boehner pays the price.
    Steve Dennis recently posted..Fiscal cliff deal includes $76 billion in corporate tax breaks

  3. Always On Watch January 3, 2013 at 5:53 AM -

    No wonder that Obama gave that sly wink!
    Always On Watch recently posted..Israel 2013 – Czechoslovakia 1938?