Once the fiscal agreement reached by Senate Minority Leader Mitch McConnell and Vice President Biden was announced, one thing became clear: both liberals and conservatives were convinced their purported allies had given away far too much, tilting the deal heavily in their rivals' direction. Of course, logic suggests they can't both be right.
Using Suzy Khimm's summary of the agreement as a guide, here's a tale of the tape.
It's also worth noting that the deal included some provisions that both sides wanted, such as another "doc fix" on Medicare reimbursements and a permanent Alternative Minimum Tax correction, which don't really count as a concession or a gain for either party.
What's more, the automatic sequestration cuts remain very much in play -- they've been delayed by two months -- and will require policymakers' attention very soon.
That said, we can expect liberals and conservatives to continue to make the case that the deal could have been vastly better. For the left, Democrats accepted too many concessions, giving up tax revenue from the wealthy they likely would have secured if the deadlines went unmet and the new Congress had to scramble for a deal.
For the right, Republicans managed to protect some tax breaks for the wealthy, but really only mitigated damage. The GOP still ended up accepting a plan with over $600 billion in new tax revenue, but no Medicare cuts, no Social Security cuts, and no new spending cuts of any kind. Charles Krauthammer, an influential voice on the right, called the agreement a "complete rout for Democrats" and "complete surrender" for congressional Republicans.
We'll explore this in more depth as the day unfolds, but I'd stress one particular angle to this that hasn't received as much attention. For some of Obama's critics, the president could have, and should have, stuck to his guns on the $250,000 tax threshold. If he'd held firm, the argument goes, he would have won that fight.
The criticism has real merit, but from the White House's perspective, that wasn't really a fight worth winning -- Obama and his team had other priorities, and by accepting modest concessions on income thresholds, they were able to secure more victories.
In other words, for the president, had he stuck to the $250,000 line, he probably would have won more revenue, but he might have lost a continuation of the Earned Income Tax Credit and/or the child tax credit. He could have been firm on estate taxes, but he would have been forced to find offsets for extended unemployment benefits.
Instead, Obama traded some revenue for more benefits, all while pocketing the largest tax hike in decades, and leaving entitlements alone.
The White House realizes many on its left flank are unsatisfied, but as far as folks in the West Wing are concerned, they won this round. In the 2011 agreement resolving the debt-ceiling crisis, Democrats felt forced to accept a deal with no new revenue. In the 2012 fiscal deal, Republicans felt forced to accept a deal with no new spending cuts.
There's a critical element on the horizon -- the next crisis is two months away -- but for now, Obama's team believes it got what it wanted out of this process.
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For me making the slightly modified Bush Tax Cuts permanent is the real failure of the deal, but that die was cast when Obama said he was for preserving the middle class tax cuts during the campaign.
If you assume preserving the Bush Tax Cuts for the middle class is a good thing then the Democrats won big despite what a lot of progressive bloggers might assert.
The House Republicans were neutered when Boehner threw up his hands. Joe Biden rolled Mitch McConnell. Once the Senate deal was done as much as they twisted, huffed and puffed, the deal was going to pass. Crappy negotiation on the Republican side.
Oh, I applaud Obama for using Biden as his front man. Smart move.
Preserving most of the Bush cuts wasn't so much a "good thing" as an economic reality. The nation is just starting to get out of its economic hole - we can't risk raising taxes on people that are already stretched thin. It'll be harder to bring those rates back up later, but that's better than having them raise automatically now.
Accordingly, I count making them permanent as only a minor concession - we were going to have to keep them around for at least a few years anyway.
No debt ceiling deal -- and now, Obama has lost his leverage. And he's proven, again, that his "line in the sand" means nothing. How can this possibly go well next month?
You seem to be missing an important point: Obama isn't running for reelection. If the GOP wants to shoot the hostage, there's no downside for him in letting them do it this time.
You also seem to have missed the fact that Boehner killed the Hastert Rule, the Norquist Pledge and that a bunch of Republicans showed themselves ready to split with the party rather than let the hostage taking nihilists among them kill the economy.
I do not assume preserving any part of the Bush Tax cuts is a good thing nor is what else he "got" for that (except for UI.) Here's the reason:
Tax cuts, and really stimulus of ANY kind (except an ADEQUATE -over 90%- TMR and/or passing H.R.676,) hurts those who are the MOST vulnerable, those on a significantly (50%) sub-FPL fixed income, who do not owe taxes and therefore don't benefit from tax cuts of any kind. That decribes tens of millions of seniors and over 40% of America. These people are literally a ONE dollar benefit cut (SNAP, SS, LiHEAP) away from starving or freezing to death, and monthly utility price increases alone (all 3 DOUBLING in a two year period) have FAR exceeded the insgnificant COLAs.
That group (on meager-barely survivable- fixed incomes) is increasing exponentially, between the baby boomers and the permanent job loss/ job deterioration.
What do you think happens to these tends of millions, when stimulus -of any kind- increases demand (its goal) and as economcs 101 tells us, PRICES as well?
For those who are employable and employed, therefore owe taxes, there are tax cuts to compensate and increase demand-->prices further. And they are usually accompanied by the likes of the secretly Draconian SNAP cuts in the Farm Bill, expected push for, at best, a chained CPI in the Debt Ceiling Hostage Negotiations __II, and POTUS' Budget.
But the (previously employed middle class)Homeless Poor, Walmart workers (#1 JobSource in WV, for instance,) and Retired Seniors (50 Million and exploding)?
DIE. By the TENS of millons, and far more suffer horribly for lack of shelter, food, heat, electricity, water and/or health care. (And no, Medicare DOESN'T pay for that much.)
Are there any catfood comparison taste test websites yet?
-Just a view from under the bus. We'll keep the light on for ya.
Why is it that no one here understands their own monetary system? It is fact that taxes and buying bonds do not raise revenue to spend. They manage aggregate demand. Why don't you folks know that the Federal government must first spend dollars into the economy before it can tax or buy bonds?
Someone tell me why a nation sovereign in the issue of its own fiat currency depends upon revenue to spend?
The thing missing from that slide is the relative "weight" of those parts.
I think it was Sen Durban who called Obama "the worlds worst poker player"...this isn't poker it's chess and we just lost two knights a bishop and our queen
Extended unemployment benefits and earned income and child tax credits are stimulative. What we didn't get was infrastructure spending. This isn't the bill for that.
Oh, overlooked in the chart are the phase out of personal exemptions and itemized deductions above $250,000. Those are small but important revenue enhancers.
This isn't either poker or chess, it's negotiation. Democrats haven't lost much of anything, yet. If the President stands firm, my guess is Republicans will blink during the debt ceiling crisis. If he insists on tax reform (maybe corporate tax reform) and real cuts in defense in the stimulus negotiations we will win that fight as well. Don't kid yourself, the Republicans are playing a weak hand and they know it.
Unemployment is a stimulus based on maintaining subsistence and EITC is short term stimulus that primarily affects retail sales. Neither do anything to bolster long term security for lower or middle class people.
The itemized deductions don't address off shoring funds or pass-through corporations that avoid individual income and they don't address non-cash pay deals like stock options or expenses.
To be sure we are not done with this by a long shot but this was definitely Not a compromise this was a blackmail payout
I certainly share your frustration, Dragoon, but I doubt the Dems could have gotten anything better through the House. I also look at a couple of things a bit differently:
Isn't SNAP (food stamps) a part of the farm bill? I read stories about $8 a gallon milk, but nothing that really looked at failure to pass the farm bill as affecting food stamps, so I could be wrong on this one. I do know that food stamps do have stimulating effect. According to Berneke, food stamps funding is a direct injection of funds into the economy, something we need right now.
I really think the sequester extension running out at the same time as the debt ceiling battle commences as no accident, and a bargaining chip in the Dems' favor. The sequester cuts defense heavily, something the Repubs' master do not want. It also doesn't contain any cuts to Social Security, Medicare, Medicaid, which makes the extreme right go to bed each night grinding their collective teeth.
http://bipartisanpolicy.org/sites/default/files/BCA%20Sequester%20Fact%20Sheet.pdf
Now it will come down to which side hangs toughest, something I share your doubts about. Time will tell.
SNAP is part of the farm Bill but it still amounts to a payoff to rural states and as a practical policy it's a matter of subsistence and not growth or security. I think on balance trading SNAP for the rest of the package is an aggregate loss.
My frustration with this is that as much as "Taxation without representation" is unfair I believe even more so is the reverse. I am just not seeing a lot in this deal that does the (forgive the phrase) 47% much good. Sure there is some pain in it for the wealthy and the corporate world but not enough to justify the burden it will place on the vast majority of the American people.
The thing with Defense spending is that it is very difficult to actually "Cut" in any meaningful way unless you go around closing bases and mothballing equipment and over the last 10 years we have made even that more difficult by outsourcing the military operations that we cannot manage to contractors and the private sector. Many of the missions remain but the resources are no longer under Presidential jurisdiction.
What Dragoon said.
Dragoon: Interesting prospective you have about food stamps. To you they seem to be a barganing chip that is squarely on the table. To millions of Americans they represent survival for their families, literally, and that includes farmers as well.
Dude
It's not that I see them as a "Chip" it's that I am presenting the program as part of the larger policy. Trust me I know full well and from personal experience what they mean to many in this country, but what I am saying is that we have to look at the total cost of that policy and who it supports.
I have always found it mind boggling that the Party that derides "Food Stamps" the most are the ones who gain the most financially from it.
Dragoon: Everything needs a look in our government, but I have to say that this obsession about food stamps when we are at eight percent plus unemployment is destructive to the country, and the psyche of people who rely on them. This exact issue is what held the Farm Bill up, this Gingrichian notion that it's a bad thing Obama has done to America. The right wing uses this as a wedge issue, so those of us who know better should support the program IMHO.
Dragoon21b-it isn't often that I agree with someone almost entirely. Well said! I liked your chess analogy. Where we diverse is that there was no mention of the "pawns" being targets of opportunity" at the next move, with little protection from the "king". With what Obama has left himself, I don't think he can protect the pawns in the next move! Unless there is some potential move that I am not aware of-which is certainly possible. I think the remaining Bishop should convince the "king" to check mate the GOP attack with, "fine, the budget cuts will begin with immediately ending the war in Afghanistan and bringing home the residual troops in Iraq and have a new round of "BRAC" (base relocation and closure act) closing strategically outmoded overseas base shutdowns! See, I got your attention!
This is my general take on entitlement spending and Social insurance programs subsistence programs like SNAP and TANF.
We need to make a decision as to what we want and just decide to fund it. They don't need to be part of a larger separate bill or policy because poverty and social insecurity are their own issues regardless of taxes, debt ceilings and political posturing and need to stop being addressed piecemeal.
Subsistence needs should be administered by the federal government like Social Security. If you are going to level a payroll tax make it count for something for the people who actually pay it.
To sort of extrapolate on what Bruce said about pawns I think that's what we need to decide...Who does the board actually belong to and who the game is played for.
the budget cuts will begin with immediately ending the war in Afghanistan and bringing home the residual troops in Iraq and have a new round of "BRAC" (base relocation and closure act) closing strategically outmoded overseas base shutdowns! See, I got your attention!
Especially if the bases to be closed are all in the Confederacy.
Draconian SNAP CUTS are a part of "the Farm Bill" - as is also an insupportable immunity (!) from court ordered permit denial for MONSANTO and DOW, on their World Food Suuppy Destroying GMO and "Terminator"(renewability destroyer) crops.
That would devastate the economies in those states and leave them in smoldering ruins...I like it
I always said the problem with Sherman's march was that he came back to soon...
"WE" threw a 30 year long party, with bombs and guns and wars as party favors, and a prescription drug bill for uppers and the Bush tax cut as downers.
New Years came and went, and now the revelers are arguing about who gets to take home the leftover cold cuts and the champagne dregs.
and nobody admits to knowing the drunk passed out in the coat closet...
That would be Dubya!
You claimed him you get to call him a cab...
By consolidating his concessions all in one pot (the $400k tax cut line) Obama mitigated widespread damage, and more importantly, drew lines of his own. It will be harder, in the future, to touch the things that went untouched over the holidays.
The Dems look like dealmakers. The GOP look like petulant children.
A day after the election, conservadems in congress were already floating the idea of ending the Bush tax cuts on income over $1 million. That would have generated far less revenue than the agreed upon $400,000 tax threshold. Meanwhile, the administration managed to get a deal that includes no spending cuts whatsoever on discretionary programs or Medicare, Medicaid, Social Security, even though Republicans had been demanding that any deal must include those cuts.
Let's not forget, it wasn't so long ago that Republicans swore that they would walk away from a proposed deal of 10-to-1 spending cuts to tax increases. They just signed on to a deal with $600 billion in new tax revenue, with zero cuts to entitlements, where the marginal income tax rates on income above $400,000 will rise to 39.6 percent- a rate higher than what the administration had been seeking.
The biggest disappointment is that we were told that we could not afford to extend the payroll tax holiday, which means a lot to low wage workers, yet, they somehow found a way to include **205 billion in corporate subsidies**:
http://www.nakedcapitalism.com/2013/01/eight-corporate-subsidies-in-the-fiscal-cliff-bill-from-goldman-sachs-to-disney-to-nascar.html
And this corporate buy out was brought to you by both Republicans and Dems. For instance, Disney bought Dems and received a huge reward; while, Coal / Railroads bought out Repubs and reaped a huge reward; and of course, the banks, especially Goldman Sachs (who own both Dems and Repubs) got the biggest subsidies.
Sickening.
While everyone was focused on tax rates, a bi-partisan slight of hand robbed us of another 205 billion.
Yep, it is AMAZING what people are "ignoring" to sell themselves on this bill! The ONLY good thing to come from it was that 2-3 Million people won't lose their unemployment insurance. Now, I think people have to stop the "cheerleading" and come to the realization that we got suckered again....
You know, this sort of "governance" HAS to STOP! We the people need to get in there and vote the 151 out of office! Cantor has to be #1 because he "thinks" he's the "boss"!
And while it is taken as a "given" that we simply must screw the old and poor, stopping the growth of the military-industrial complex isn't even an option.
Oh, you are so right about that!
Eisenhower warned us about the military-industrial complex. Did we listen????
How can we be blamed for ignoring things no one new about till now? This is one reason many dems thought it was a @!$%#ty deal , they are going to gut food stamps , meals on wheels and funding like that , because SHARED SACRIFICE , while they pass this corporate BS , because everyone has to be afraid of a fake cliff
If we cancelled the doesn't-work-at-all F-35, we could cut the deficit by $2 trillion over the next 20 years.
But isn't the takeaway of the Payroll Tax Cut the first step to getting the Income Cap increased from $108,000 to the now enshrined $250K level and thus, increase the solvency of Social Security?
One of the most important things that happened during this fight is in the end Boehner found the balls to throw the Hastert Rule under the bus. By doing so Boehner told Tea Party Republicans that he will cut a deal with Nancy Pelosi if they go too far. That is huge for Speaker Boehner's ability to act as a negotiating partner in the future. Good for Boehner. Now let's see if he is re-elected Speaker.
Can we get a link to the voting record on this? Have not been able to find.
http://politics.nytimes.com/congress/votes/112/house/2/659?smid=tw-nytimes
The formatting is no good, but you could do Cntl-F to find the reps you're looking for:
http://clerk.house.gov/evs/2012/index.asp
My Republican Rep didn't even vote. Worthless back bencher POS.
I'm pretty sure that's the wrong table. That's the table from the GOP's proposal from a few weeks ago.
Neither side was a clear cut winner with the agreement. But it did force the Republicans to accept higher taxes. The debt ceiling fight is going to be even bigger than this skirmish. Republicans are going to demand cuts in domestic spending while Dems are going to insist on new revenues. I don't think it would be unreasonable to conclude that Republicans will hold out until the end with the expectation that Obama and the Dems will roll over on the debt ceiling. The sequester does not really hurt the major programs Dems want to protect, but it does cut defense spending and that is what Republicans are going to want to stop. Dems have the sequester as leverage if the Republicans intend to use the debt ceiling as a hostage. However, Republicans think they have the upper hand in the fight so it is unlikely that this will be resolved in a timely fashion.
It is going to be far more difficult, if not impossible, for Obama to get Dems to go along with entitlement cuts and reforms without any new revenue. And Dems are not going to be willing to get those revenues from the middle class and poor. Going over the debt ceiling "cliff" will have a bigger impact on the economy as well as the world economy. If we impose drastic austerity and our economy moves into a recession, then it will send the world economy back into a recession. It is evident that the solution will have to be balanced with revenues and budget cuts. But Republicans are not going to go along with the new revenues. Don't expect to see any movement toward a real compromise on revenues until public opinion and Wall Street demand resolution.
Except the President is probably on pretty firm ground to simply state that the debt ceiling is a farce and ignore it. Congress passed laws on spending so he is well within his right to say that Congress can't block him from following those laws and just telling the Treasury to borrow and spend.
Generally, a balanced view, Steve, but these words and the concept they imply (from a vast majority of pundits on both sides) piss me off. I keep seeing variations on the theme repeated again and again:
Rachel, Steve, and others - can we frame this properly?
The GOP agreed to let the marginal rates for the BUSH ERA TAX CUTS (that had an original expiration date of 1/1/2012) be permanently extended on 1/1/2013 for every American making less than $400,000 adjusted gross income.
I know that's a hard concept for most Americans to wrap their heads around, but that's how it went down. There was NO TAX HIKE on the wealthy, but there was a permanent TAX DECREASE on all but the wealthiest 1% of Americans.
I don't know any politician of either party who couldn't campaign on that concept.
So much for paying your fecking taxes! Now, the entitlement argument really will stack up against us for the next round of give too much to the Sociopath party. Seriously, I would have given more than my left nut to see the military budget cut down to "over-sized" but that of course was a non-self-centered pipe dream and was never intended to be realized anyway. Did I miss the victory here? I don't think so.. Eat @!$%# and die Barack!
duplicate
Like other commenters, I felt the chart didn't seem to match the narrative. In Ms. Khimm's chart it says Republicans got cuts in both Medicare and Social Security, but below in the narrative, they got neither. Based on the chart, Republicans should be ecstatic, yet we know they aren't. Perhaps I'm not getting some of the nuances. I admit to being a bit weary of the issue.
Lets launch a 6 year 20 million dollar study into this. Then anyone who dissents from the findings, we'll deem racist,homophobe,xenophobe,ignorant,climate destroyers, sexist,bigots and greedy Victorian Scrouges. Then we'll raise taxes on them and launch another study on the findings of that study and go before a congressional commitee, then allow the EPA,the FDA, the IRS, the CBA, NRC, the ATF and the Princeton Law Review to have a looksy.Then we'll adjourn for the spring holidays and maybe get back to you in say.....2029.
billhillie, not only are you ignorant about how the government works, you don't even know that Princeton doesn't have a law school. Let me guess, everything you know about America comes to you via Fox News.
Ron, it was a hypothetical nothing more.Substitute Harvard if you wish, it really doesn't matter.!! The above mentioned satire is actually the real true to life game plan used by progressives.They use this same plan no matter what the problem happens to be and you know it.
What I know about America comes via almost a half century of living, working behind the scenes for a state agency( you see first hand) and common horse sense.Let me guess everything you know comes from the news media,academia or hollywood.Three corrupt institutions who urinate on the people who fund them.
The actual real true life game plan used by progressives. That's interesting. Please source examples of this "actual real true life game plan."
So what you know is subjective, based on no facts or reason, based on personal experience and not verifiable by anyone besides you, and based on your own personal corruption, cognitive dissonance, and narrowminded-ness.
Anyone who disagrees on the basis of things like facts, math, verifiable information, objectivity, etc. is obviously the person who is wrong.
But I do love the idea that media is somehow not hollywood, but that academia somehow is. What exactly failed with academia? The reality that they don't produce facts that support your bias? That's interesting because you don't seem to have a problem referring to academia when it does support your bias.
You do realize there's an alternative here, no? You might just be wrong.
Yeee-hawww!
On a side note, passing the bill has provided definitive proof that Republicans have been the prime cause of the breakdown of compromise. As soon as the Republicans allowed majority rule, compromise happened: http://therepublicon.blogspot.com/2013/01/112th-congress-proof-that-republicans.html?spref=tw
And if you look at the 151 Republicans voting "no" you see clearly that The South Is The Problem.
Let's secede and leave the South to fend for themselves!
What would happen to the Southerners, including me, who are progressive Democrats and Unitarians? Would we have to give up our SS and Medicare? I can't move north because I need to be near family for health reasons. They are Republicans, alas!
Best news out of this deal was Boehner told Reid to go eff himself. Maybe they'll start beating each other over the head with canes again soon. One can hope.
A bitter pill.
I would like to know why we have millions going to Nascar and nothing for Sandy Victim
Because the Southern criminals robbed us once again.
Says what I want to say more kindly than I would say it.
Tax increases without spending cuts is a loss to the American people and to future generations. I am way more concerned about my grandchildren than about myself at my age. They are the ones that will suffer from our selfish, out of control spending. We are unwilling to make sacrifices that will be forced upon future generations. Their sacrifice will be great and through no fault of their own. Everyone who voted for higher taxes with no cuts to spending needs to be thrown out of Congress.
No doubt you would like to forget 2001 to 2008 and all those Republicans who racked up the majority of the debt and how they racked it up. I would like to forget those years also. And so would a lot of veterans and parents of dead kids who lost their lives in Iraq and Afghanistan. But you cannot run or hide from history which will have the last judgment on Bush and the Republican Congress. You don't get to rewrite history; it writes itself because facts are immutable.
Provide any evidence to support the claim that your grandchildren are going to suffer from debt passed on.
PLEASE ask Rachel Maddow (or anyone else) to explain how a middle class tax cut helps 98% of Americans! I understand that this is one of those phrases tossed out without thought, to appeal to the public. But a tax cut that marginally helps the better off middle class has virtually no impact on the rest of us (sorry, no longer believe in the trickle-down economics fairy). My head is still spinning from the recent automatic (i.e., without thought) tendency to refer to "the 98%" and "the middle class" as being the same thing. False. But what percentage of the population actually still is, by definition, middle class? We have a huge crisis of poverty today (as much as the media ignores it), coupled with a chunk of the population that is just barely treading water (post-middle class). Has "middle class" merely become an ignorant term referring to the non-rich? Or are the masses of our poor/near-poor considered irrelevant?
That's been bothering me, too! Income under 400000 or 250000 or whatever seems to be called middle class, including those under the poverty level, including in fact those with no income at all.
We need to agree on a definition of middle class. My niece and her kids, who wouldn't survive without food stamps and other help, admit to being *poor*. They're sure not middle class.
"the automatic sequestration cuts remain very much in play -- they've been delayed by two months -- and will require policymakers' attention very soon."
Exactly what are these, please?
Ending the payroll tax cut is extremely frustrating. If you're low or middle income, this hurts. Where were the Dems on that?
Even if it hurts, I agree with the return of the payroll tax to what it was. It is the Social Security fund's income. A continuation of the cut would have threatened the independence of SS. I paid in to SS; I appreciate what I'm getting back from SS. Let's keep it separate.