“It’s not the bill that I would have written but, on balance, I think that it will help protect our middle-income families and our small businesses, in many cases, and prevent us from inflicting a severe shock on our economy.” – Senator Susan Collins
Everyone in Maine’s congressional delegation voted for the late December/early January bill to resolve the fiscal cliff. And all said something like Senator Collins. If they could write the bill, they’d do something a bit different. But the law that passed is more good than bad.
I concur. No single person gets his or her way in the American political system. So it’s all a matter of degrees of goodness or badness. This one restores some progressivity, making our tax rates closer to what existed when our economy was growing more strongly.
On the left and the right, some are rather upset about the outcome.
On the right, some don’t like the fact that anyone had their taxes go up. They also complain about not having big spending cuts included, although those who say there are none are flat wrong. They promise that they’ll get big cuts in a few months and suggest the time for new revenues is over.
(Some conservatives also say that the deal increases the deficit, which is true only when compared to having all the Bush tax cuts go away, something they certainly did not support. If you compare the deal to continuing all the Bush tax cuts, which they supported but was never going to pass or be signed by President Obama, it decreases the deficit by $737 billion.)
On the left, some don’t like the fact that Obama campaigned on raising taxes on incomes over $250,000 but the income cut-off was higher. They also worry that, when it comes time to dealing with the next deadlines, especially those involving the debt ceiling and dealing with the scheduled across-the-board cuts, Obama won’t have the leverage he had and will give up too much.
The coming dynamics are more complex than suggested
1. In dealing with the across-the-board cuts, these are now set to be half from defense and half from domestic programs. With Republicans generally interested in avoiding big defense cuts and Democrats generally more interested in the cuts to domestic programs, neither has any great advantage. Moreover, there are plenty of organized groups from business and the health sector and other areas which are plenty interested in what happens. So it’s very unlikely there will be across-the-board cuts.
2. Regarding Obama’s purported loss of leverage, this argument seems overstated. Just look at what happened with the stock market after the latest bill passed — it surged. Business interests do not want to see a default or a government shutdown or any long period of fiscal upheaval. This will put a lot of pressure on House Republicans, which has been the part of government most disinterested in compromise.
3. Recently President Obama has repeatedly said that, for the next round, there must continue to be a “balanced approach.” He will not accept all cuts in any deal. While he doesn’t have the leverage related to potential tax increases, the president will not only be backed by big business, which doesn’t want a default of U.S. government debt or a credit downgrade, but will also pushed by his base. Moreover, strong majorities in the public consistently agree with the sort of approach Obama outlined.
4. Public support for Obama and dislike of House Republicans are both strong. With the decision not to pass relief for Hurricane Sandy, Gov. Christie of a New Jersey, a Republican, just pounded Speaker Boehner and the House Republicans. While general public opinion (as compared to the views of one’s constituents) has a limited impact on congressional votes, it can affect the news and political environments and could, to some extent, restrict the more radical, tea party elements in Congress.
In sum, while the next months will have their ups and downs, likely there will be a reasonable (if messy) resolution in the next months.
None of that means members of the public should just sit back and watch. If people have strong views on issues like funding for Social Security, or the Medicare eligibility age, or any other issues, it’s a good time to convey them to your elected representatives. You can find contact information from the House and Senate websites: house.gov and senate.gov
For some good reads, graphs, and video clips, see the following:
3. A detailed look at recent days, which starts out with Speaker Boehner cursing out Senate Majority Leader Reid.
4. And here’s Gov. Chris Christie (R-NJ) commenting on the fiscal cliff and the vote that didn’t happen for Hurricane Sandy relief:
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