Despite the media’s so called “Fiscal Cliff” fearmongering a deal has been passed to avoid pending budget cuts:
The House seemed on track to torch the legislation, a hard-fought bipartisan bill crafted by Vice President Joe Biden and McConnell that sailed through the Senate by a lopsided 89-8 margin in a vote shortly after 2 a.m.
The compromise bill averts the sharpest tax increase in American history. But it hikes rates on income above $400,000 for individuals and $450,000 for households, while exemptions and deductions the wealthiest Americans use to reduce their tax bill face new limits. The accord also raises the taxes paid on large inheritances from 35% to 40% for estates over $5 million. And it extends by one year unemployment benefits for some two million Americans. It also prevents cuts in payments to doctors who treat Medicare patients and spares tens of millions of Americans who otherwise would have been hit with the Alternative Minimum Tax. And it extends some stimulus-era tax breaks championed by progressives.
The middle class will still see its taxes go up: The final deal did not include an extension of the payroll tax holiday. A report released by the non-partisan Congressional Budget Office Tuesday complicated matters further. It said that the Senate-passed compromise would add nearly $4 trillion to the federal deficit over 10 years. [Yahoo News]
Here are some thoughts on all this nonsense. First of all I liked how the media after the election all got together and decided to call it the “Fiscal Cliff” instead of “Sequestration” which was the term used before. They changed it to “Fiscal Cliff” to make it seem as scary as possible. There were even networks using countdown clocks just like some of them used for the Maya Apocalypse earlier last month. This just shows that this was all made for TV entertainment. Despite all the Fiscal Cliff doomsday talk the politicians were able to just simply pass a bill that puts off the automatic spending cuts off for a few months that many real analysts predicted would happen. So much for Sequestration being something that was supposed to force Congress into making hard choices.
So the majority of the tax fighting is over and the next fight will be over cutting spending in a few months when the debt ceiling will have to be raised:
“Now the focus turns to spending,” Boehner said, vowing his party would “hold the president accountable for the balanced approach he promised, meaning significant spending cuts and reforms to the entitlement programs that are driving our country deeper and deeper into debt.”
There is no way there is going to be enough politicians to vote to make significant cuts in entitlement programs like Medicare and Medicaid. It would be political suicide. So I expect something superficial that doesn’t really solve the nation’s fiscal problems to be passed after much made for TV drama. I would not be surprised though if more defense cuts are made because that is something that is politically easier for them to do. After it is all done the buck will once again be passed because no one wants to be blamed as being the ones who had to make hard choices that would get the nation’s fiscal problems in order.
Anyway I prefer Korean made for TV political theater because it is definitely more exciting than watching Fiscal Cliff doomsday clocks day after day.