Sunday, July 10- 3:30pm
Fiscal Cliff: So What Happened?
by Riley Sweeney
With all the conflicting news stories and commentary going back and forth, it might be a bit confusing to figure out what happened with the fiscal cliff. Well have no fear, noble Whatcom Democrats, for I am here to set the record straight. The Background: In 2011, the House Republicans and the White House were slugging it out over the debt ceiling and the Bush tax cuts. The final agreement was that they would extend the Bush tax cuts for precisely one year. If there wasn’t some sort of bargain by then, they would slash trillions of dollars from both defense spending and social programs. This was dubbed the “Fiscal Cliff”.
What Happened: Boehner bellyached, Cantor conspired and Obama orated but at the end of the day, the bargain was . . . actually pretty good for team Blue. We locked in the tax rates on incomes of $400,000 at the Clinton levels. We closed a whole slew of tax loopholes on the upper incomes (Estate Tax, yacht deductions) and protected most of the deductions used by the middle class and poor (child credit, tuition deductions, health expenses, etc). Also included in the deal was a one-year extension of the unemployment insurance for the millions that are out of work.
But what did we trade away? In return, the Republicans pushed the fiscal cliff cuts back two months, so that they would kick in right as we hit the Debt limit ceiling in March. Obama said: “fine you want to have this conversation in two months, I can deal with that”, and the deal was passed. We will see what happens in March, but Obama has said he will not negotiate with Congress on the debt ceiling and has a backup plan to remove their leverage that involves an archaic legislative maneuver and a giant platinum coin with Ronald Reagan's face on it. Seriously.
So who won? Based on the sheer volume of Republican complaining, the President won. Eighty-five Republicans in the House were forced to vote to raise taxes on the rich. I can already smell the primary challenges in 2014! Speaker Boehner looked very weak as his own lieutenants voted against the bill and he had to plead with Nancy Pelosi to bail him out with Democratic votes. Count yourself proud, the President went toe-to-toe with Congress and got almost all of what he wanted without a single cut to Social Security, Medicare or Medicaid.