Congress Reaches Fiscal Deal

After months of threats that the country was about to fall off a “fiscal cliff” because of a budget stalemate, the House last night passed legislation averting that disaster. The bill was opposed by many Republicans, but passed overwhelmingly in the Senate early yesterday morning.

The House voted 257-167, with 172 Democrats and 85 Republicans–including House Speaker John Boehner and former Vice Presidential candidate Paul Ryan–supporting the measure.

Republicans who opposed the measure said the legislation did not go far enough in spending cuts. While the new deal will increase taxes on the wealthiest two percent of Americans–individuals earning more than $400,000 or couples earning more than $450,000–Republicans argued it does not call for any significant cuts in health care or other social programs.

The left, meanwhile, criticized President Obama for not taxing the wealthy even more.

But the new deal doesn’t end the debate. According to the Wall Street Journal, “In two months, the delayed $110 billion in spending cuts will again kick in. At the same time, the U.S. will face the need to increase its borrowing limit, a change that can only be made by Congress. That sets up another rancorous fight, one with potentially more damaging consequences.”

Photo from Wikipedia

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  1. In 2009, total outlays of federal funds net of hallmarked trust funds (e.g., social security) totaled $2,650 billion. Of this amount, military spending amounted to 54%, or $1,449 billion while all non-military spending amount to 46%, or $1,210 billion. This non-military spending includes interest on debt incurred for military expenditures, a very considerable portion of which are allocable to Mr. Bush’s and Mr. Obamas’s adventures in Iraq and Afghanistan.

    Hmmmmm …. wonder where we should cut funds??? Probably it’s best to take it from socal programs: yep, that’s it! The old, the very young, the sick and disabled, students and prisoners – they can’t raise too much of a ruckus now, can they?

    While critics often decry “government spending,” it is important to look beyond the simpleminded rhetoric and determine whether the actual public services that government provides are “worth it.” To the extent that such services are worth paying for, the only way to do so is ultimately with tax revenue. Consequently, when we talk about the costs that taxes impose, it’s essential to balance those costs against the benefits we all receive from public services.

  2. …and, the glorious Tea Party House found ZERO time to approve money ( okayed by the Senate ) for the Hurricane Sandy devastation..their incompetence knows no end…

  3. … And in 2 months we’ll be hearing all about raising the debt ceiling.

    It seems that leadership, on both sides, and in too many aspects of American life, has given way to something less. This made Reagan, makes Clinton, and may even make Bush II look like the last of a breed– folks who could work with the other side.

    Here though, Obama had so much political capital, and even though I disagree with him on many things, I just assumed he’d use this capital, and show some leadership. But he continues to “outsource” the governing (the leadership) to Congress as a reporter noted on Morning Edition, or some other liberal show I listen to.

    Oh, well. Good to see those regressive payroll taxes are back!! Remember, they go to Social Security, which I’ve been told, we must “save.”

  4. ..yes, prof, I’ve heard the Foxnooz talking points about Obama’s lack of leadership. I think Doocy and Co. write those nuggets of journalistic wisdom on their hands, in ink, like Sarah does,each day, just in case they forget them for a moment. After all, they’re on camera pretty early, so who can blame them for not being fully awake?

  5. It’s the Republican majority house that has a leadership issue. Boehner can’t get the tea party loonies to agree to ANY reinstatement of pre-Bush tax rates and all they want is to be able to slash Social Security and Medicare, despite the fact that the vast majority of Americans disagree. The dialogue has shifted so far from the center that this deal is considered a “loss” by the far right. A decade ago it would have been considered a major victory for the right to have no tax increases on 99.5% of the population. There is NO way to deal with the deficit without raising taxes. Unless we get rid of the military, social security, medicare, medicaid, and all the corporate and farm subsidies.

  6. Remember how we were always told by Democrats that the Bush tax cuts only benefited the rich?

    I’ll bet you didn’t know you were rich, did you?

    Except that for incomes below $400,000 the tax increase is due to the expiration of the 2% payroll tax cut implemented by Obama. I am unhappy that this is allowed to expire, but the Bush tax cuts for earners at less than $400,000 are still in place. And that doesn’t change the fact that the Bush tax cuts favored the wealthy. The current deal imposes more of a burden on them.

  7. Those at the top of the income pyramid are least likely to feel the impact. For those in the $50,000 to $200,000 range (as indicated in the Bloomberg piece), the impact will not go unnoticed.

  8. Ah, Spiro. You fail to believe that one who voted for Obama, who gets his news primarily from the NYTimes and NPR/WNYC (of which I am a sustaining member, you?) can also find our dear President lacking in leadership.

    This shouldn’t be the first you heard of these complaints. Did you miss this story today:

    Still, it must be comforting for you to think that ANY criticism directed at Obama must come from “one of those” FOX NEWS viewers.

    Sorry to disappoint.

  9. They payroll tax funds SS though, it never should have been reduced.

    This deal is not great on a long term basis, rates have sold off a little today but imagine if the Fed was not buying all of our debt? What if the treasury market was not massively distorted? Where would CT10s trade today?

    Answer: At a level that would force our politicians to be more responsible. Helicopter Ben is out of control.

  10. we must be past obama’s reelection as the Prof is now lecturing from the Left, as opposed to the Right, where he was perched up until now. welcome back, Prof! will you be swinging back the other way come the midterms?

    yes, BHO leadership can be dinged as “lacking” here—but I’m sure glad I am not being judged on my ability to lead a pack of braying, lunatic jackasses (read: the House Republican Caucus) down a path to a watering hole. Who’s the “leader” there? Boehner? Cantor? Ryan? hucksters and cowards all. get these teabagger clowns away from real governance, and back to talkin’ about ladyparts, where they truly excel…

  11. “The Tea Party movement is an American political movement that advocates strict adherence to the United States Constitution, reducing U.S. government spending and taxes, and reduction of the U.S. national debt and federal budget deficit.”

    Yup, count me in…I’m a looney.

  12. Good answer Herb!

    you never mention here though—are you down with the attendant social agenda of the teabaggers? i note you don’t quote THAT part of the teabagger mantra? you down with wanding ladyparts as well?

  13. Obama ….lack of leadership ? Baloney. The Tea Party has once again proved the old saying “You just can’t argue with a crazy mind.”

    As for congressional Republicans in general : Prior to January 20th 2009, they never even knew the meaning of the term “fiscal conservative” …

    So now it’s Ryan and Boehner on one side and Cantor and the Tea Party on the other – Civil War anyone ??

  14. hey herb, first of all, happy new year… Sure all those alleged Tea Party goals you mention are laudable, but… first of all, they are not exclusively Tea Party goals…and second of all, the religious goofs, former Klansman and gun fanatics have invaded Tea Party central, and now they all want to talk about restricting reproductive rights, eliminating “widespread” voter fraud in black areas, and buying more and more assault weapons. They are now all doomed to failure. Perhaps herb, you can start a newer, cleaner-messaged Tea Party.

  15. Methinks the good liberals here think the liberals in the Times article are a bunch of FoxNews/Tea partiers!! I cannot imagine Bill Clinton not finding a way to resolve these issues, rather than continually “kicking the can” down the way another 2 months. Because Bubba would have went to the Hill himself and slap some backs, talk some talk and, well, politicked a deal. He would not have asked Biden to go do it for him.

    Understand, Obama has obvious talents, but the dirty work of governing in this fashion is not something a one-time Senator ever has to do.

    But if it makes you feel better to 1) blame someone else, or 2) find Obama to be a competent leader, or worse, 3) believe both 1 and 2– go ahead.

    Now excuse me while I work a few extra hours to make up for that payroll tax increase.

  16. MM, “gap” is not accurate. It is more accurate to describe it as a temporary surplus (an ill advised one at that). SS is not on the best footing to begin with, its insane that these withholdings were even temporarily reduced.

  17. Hey, even though I may be considered a commie-pinko-lefty-liberal, I think the Tea Party, with their insistence on supporting the United States Constitution, makes them perfectly prepared for whatever may happen here in the 18th century. Where I disagree with them is that if they are going to support the Constituion they should support all of it — not just the parts they like. (I know, Rush told you that you could, so go ahead, and right after nap we’ll have creative play period and cookies.)

  18. “I cannot imagine Bill Clinton not finding a way to resolve these issues, rather than continually “kicking the can” down the way another 2 months. Because Bubba would have went to the Hill himself and slap some backs, talk some talk and, well, politicked a deal. He would not have asked Biden to go do it for him.”

    Yeah sure ..the teabaggers would have probably ended up impeaching Clinton over something or other.

  19. I was under the impression that Bill Clinton left office with the budget balanced and a fairly large budget surplus in the Treasury. You don’t think the little rascal snuck back in and took it, do you? Maybe when Tim Geithner leaves office BHO might consider WJC as the new Secretary of the Treasury? That would really frost the conservative Republicans’ dingleberries, wouldn’t it?

  20. advocates strict adherence to the United States Constitution

    No they don’t. They advocate their interpretation of the United States Constitution, which at minimum expands the second amendment to mean everyone should have access to guns.

    I really am not sure what else they believe, other than any spending that doesn’t directly affect them should be cut.

  21. “This is like the good old days. All we need now are lasermike, cathar and butch…”

    That, and a couple of cold pitchers.

  22. I cannot imagine Bill Clinton not finding a way to resolve these issues, rather than continually “kicking the can” down the way another 2 months. Because Bubba would have went to the Hill himself and slap some backs, talk some talk and, well, politicked a deal.

    Yes, we all remember what a fine relationship with Congressional opposition Bill Clinton had. They all got along just swell in the ’90s!

  23. Christie’s afternoon tongue lashing of the Tea Party House of Representatives is somehow missing from the foxnoooz web page. I wonder why.

  24. Now excuse me while I work a few extra hours to make up for that payroll tax increase.

    Didn’t hear too many of you folks cheering the temporary payroll tax cut when Obama got it passed four years ago, but now that it’s gone, there will be plenty of grumbling.

  25. Rep. Peter King (R) NY and Gov. Chris Christie (R) NJ both telling the Tea Party House of Representatives to self-procreate. Perhaps, Iceman, this is what you meant when you wrote that “Republicans Rock”? Or were you referring to Ted Nugent?

  26. Question for you economics majors: right now, Medicare deductions stop at around $103,000 of total salary. So what if they didn’t stop? How much additional money would be collected from the folks who make more than $103K? Would that help keep the program from going bankrupt a week from Tuesday (if you listen to AM talk shows — two weeks if yours are on FM)?

  27. So nick, then why was Obama rolling out Clinton and the 90’s as a bygone era whose time has come again?

    Like it or not, the 90’s were fine. Clinton and Newt worked together (sure Clinton lied and got impeached for it, and he sent off some missiles to re-direct our attention, and did I say he had sex with an intern? An intern!!)

    And all of Clinton’s problems were cause by—- Clinton. Did the repubs overreact? Sure. But it ain’t like he did nothing.

    Regardless, THIS leadership- Obama, Boehner, McDonnell is failing ALL of America.

  28. In all probability those “sans culottes” that applaud this fiscally asymmetrical disaster already came to the table with relatively low expectations as to their earning power and upward mobility. Those, however, that studied, worked, and sacrificed to earn a measure of success only to be vilified see things through a different lens. Equalizing economic outcomes through a perverse tax structure is a far cry from providing basic societal needs and security to those in need. If you enjoyed the past 5 years, you’ll really get a thrill out of the next 4, as the disposable incomes of higher earning yet indisputably middle class families shrink, and their spending habits change radically as they circle the wagons. They will pay more, but they’ll make it. Enjoy your Schadenfreude while you can. The invisible costs will manifest themselves in the form of a generally lower standard of living for the majority who vainly expect some economic windfall from picking the pockets of their neighbors.

  29. Like it or not, the 90′s were fine.

    Did you even live through them? Literally every night on cable news there was a discussion of our president’s penis. Every night. For hours. For years. Then we had an impeachment over nothing. Swell times, those.

  30. Nick, no one cheered the payroll tax cut because it was a terrible idea. Never should have happened.

    I worked with people who quite literally cheered when the tax cut came through, because then they had extra money, which they spent, which was the point.

  31. deadeye has once again synthesized the new mantra that Mitt whispered to the fat cats and got caught at — its the new right-wing world view!

    It goes like this— if you’re successful, its not just that you “studied, worked, and sacrificed”. Its because YOU’RE BETTER! If you’re struggling, it’s not just because you DIDN”T study, work, or sacrifice (though clearly you didn’t!), its because you are a lesser person. And you’re bitter and jealous and want revenge! You hate success and anyone who has more than you! That’s all there is to it!

    And it is interesting that he would invoke the sans culottes to make a point, for as we know the sans-culottes paid taxes in Louis’ France, while the nobles did not. No wonder they were pissed, non?

    So we all just need to accept that the “class warfare” so bemoaned by the right-wing has really been in play for some time, only of course it is they who detest more than half the country and see them as bitter, lazy, and vengeful good-for-nothings.

    What a wonderful, and patriotic, way to look at one’s fellow citizens!

  32. It’s dismaying that so few above could bring themselves to at least half rejoice that a deal was reached. and no one wishes to congratulate Speaker Boehner for his considerable efforts, let alone his actual vote the bill?

    Unlike Obama, Boehner is a genuine doer,perhaps does not spend as much time in a tanning booth as I’d imagined.Does anyone imagine that any current Democratic congressman/woman would have proven so dogged and so willing to risk his position?

    Yet walleroo reliably posts above in his ever-vainglorious attempts to be witty and loved. Go buy the last round before closing someplace, walleroo, someplace where you’ll find the likes of Spiro T.and croiagusanam slumped over their Midori sours.

  33. Cro, a you’ve pretty much hit the nail on the head. If a person chose to study basket weaving and yet hews to a political philosophy that justifies the confiscation of his more industrious neighbor’s legitimately earned wealth, we’re all in deep s___. That’s basically exactly what is happening in this country.

  34. You’re a bit too eloquent for your own argument’s sake, deadeye. The operative word is “legitimately.” Much of what takes place in the financial biz fails this test.

  35. And now the great Major Hoople offers a hymn of praise to John Boehner. A true leader!

    Just when you think someone can’t be a bigger amadan guess what! He proves that he CAN be a bigger amadan.

  36. “no one wishes to congratulate Speaker Boehner for his considerable efforts”

    —we’re now in the presence of comedic genius.

    boehner’s Whip voted AGAINST the bill. that is almost unimaginable. that’s leadership.

    i believe boehner received the proper recognition for his leadership yesterday from the governor of nj and the distinguished congressman from the shamrock tavern—both republicans. that’s leadership.


  37. cathar, I admit, you got me to look up “Midori Sour”. What a hideous drink. Do people really ruin their booze with Sprite? Perhaps you do, but not Spiro. I tickle my white beard and moustache with only the finest homemade corn whiskey, and only on rare events, like when Mike Huckabee makes the list of top 10 bass players of all time.

  38. Unlike Obama, Boehner is a genuine doer

    Boehner’s party didn’t get the bill passed; Obama’s party did.

    Also, Boehner’s job is to get bills passed. Obama’s isn’t. Writing and passing bills is Congress’ job, not the president’s.

  39. Cryans in South Orange closed !!!!!… I just found out. Man between that and Lincoln getting shot I’m really behind the news these days.

  40. “Unlike Obama, Boehner is a genuine doer,perhaps does not spend as much time in a tanning booth as I’d imagined.Does anyone imagine that any current Democratic congressman/woman would have proven so dogged and so willing to risk his position?”


    Thank you for sharing this insight with us, Ignatius J. Reilly.

  41. This conservative is very unhappy with Speaker Boehner, specifically how he handled the Sandy relief funds. He was ready to walk away and not even acknowledge it! Thanks to the outrage of Gov. Christie and other Republicans, however, he has reconsidered. No, I am not happy about all the pork in the bill but this really should be a non-partisan issue. Families have been left homeless, businesses destroyed beyond repair…the money was needed yesterday, not months from now.

  42. To the poster who said that the cut in my paycheck is not a “gap,” to them I say “a rose by any other name…” However, this rose is a dead one and does not smell sweet. I just got my first paycheck of 2013 and did the math. It is NOT pretty.

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