In the end, U.S. House Speaker John Boehner couldn’t even get his majority leader, Rep. Eric Cantor of Virginia, to go along with a last-minute deal to avoid the much-discussed “fiscal cliff.” The deal did go through over the opposition of many House Republicans. It includes raising taxes on those with incomes over $400,000 annually ($450,000 for couples), boosting taxes paid on dividends or inherited wealth, keeping tax credits that went with the 2009 stimulus, extending unemployment insurance for a year and temporarily avoiding automatic spending cuts that had been scheduled.
Basically, the differences between Republicans and the White House came down to the GOP’s demand for curbs in entitlement programs such as Social Security, Medicare and Medicaid and other budget cuts, and the White House’s desire for higher taxes on the wealthiest Americans and the protection of entitlements.
The aim of the debate was supposed to be to ensure more responsible budgeting in the future as part of a long-term plan to reduce the nation’s deficit. In reality, the outcome was yet another stopgap, albeit a necessary one. Democrats and President Obama were the clear victors, which was the best news for middle-class taxpayers and working people.
Divided, conquered
Republicans split among themselves, with Boehner trying to manage tea party members who wanted no tax hikes under any circumstances and the more mainstream lawmakers of his caucus who understood that the recently re-elected president was holding the upper hand.
But this will be a temporary break for Obama, who can expect more battles ahead over the usually routine step of raising the nation’s debt ceiling and continued opposition on the part of Republicans to any steps addressing the nation’s debt that involve asking the wealthiest Americans to pay more.
Following the sound defeat of Mitt Romney, who never connected with average working people, GOP members are either tone deaf or have a political death wish in standing to defend the interests of the rich against reason.
Earth to Republicans: The nation is more diverse in its socio-economic makeup than ever, and the middle class is fed up with stagnation. They are also angry that the people who are the foundation of the country’s economy pay more than their fair share while those at the top enjoy tax breaks that their defenders in the GOP-run House will go to any length to preserve.
To be sure, the government needs to curb spending and to address the preservation of Social Security, Medicare and Medicaid, which are, literally, lifelines for millions of the elderly and the disadvantaged.
More than cuts
But a bulkhead for the entitlement programs on which so many Americans rely can’t be built with spending cuts alone. There must be revenue, and that is going to mean some tough political choices, particularly for conservatives who resist the phrase “additional revenue” as a synonym for “taxing the rich.”
The Simpson-Bowles commission found that the way out of the nation’s debt couldn’t be found with cuts alone and would indeed involve long-term, essentially permanent increases in various taxes that are paid by the upper tier of earners and those of inherited means. Alan Simpson, the former Wyoming Republican senator, and Erskine Bowles, former White House chief of staff and University of North Carolina president, also advocated some limits on entitlement programs such as reducing cost-of-living increases.
They didn’t offer the criticism of the New Year’s deal that Republicans would have liked or the unbridled praise the president would have preferred. In their statement after the deal, Bowles and Simpson said the parties “missed an opportunity to do something big” in terms of debt reduction.
Their group was asked to make tough choices, and, with some dissent, did. Both the president and Congress seem unwilling to make long-term decisions in terms of the tax code that are likely to be unpopular with groups interested in preserving their own interests.
