The House approved a deal that Democrats claim will stave off the harshest and most immediate consequences of the fiscal cliff, even though the Senate bill delays the onset of the “sequester”—those swift, automatic spending cuts—for only two months.
Now is when the establishment media may turn their focus away from the real effects of the fiscal cliff negotiations, which would be a disservice, considering that House Speaker John Boehner, erroneously depicted by the left as hapless and bumbling during the talks, is now laying out the GOP’s vision for a post-fiscal cliff America.
“Now the focus turns to spending,” Boehner predictably said in a statement following the House vote, as though slashing programs likes Social Security and Medicare will, in any way, lead to a balanced America.
Boehner and Company didn’t surrender ground during the negotiations. The fiscal cliff deal leaves in lucrative loopholes enjoyed by hedge-fund and private-equity moguls, along with a whole host of other gifts to Midwestern ethanol producers and Puerto Rican rum merchants (seriously).
The research and lobbying organization Citizens for Tax Justice released a report showing that the tax deal approved by the Senate would save less than half as much revenue as President Obama’s original proposal.
The New Yorker’s John Cassidy dissects the report:
Taxpayers in the middle quintile of the income distribution will get an annual income tax cut of $880 relative to what would have happened if the expiration of the old law had been maintained. Taxpayers in the top one per cent, those poor benighted souls who will be forced to pay the higher top marginal rate, will still benefit from the Bush rate on the first $400,000 of their income; each will save $17,840 relative to a world in which the Bush tax cuts had been allowed to lapse.
“So much for Obama crushing the rich,” Cassidy writes before segueing into handwringing about deficits.
Economist Dean Baker writes that this entire debate has been part of a larger distraction “at a time when by far the country’s most important problem remains the economic downturn caused by the collapse of the housing bubble.”
“The obsession with budget deficits is especially absurd because the enormous deficits of recent years are entirely the result of the economic downturn,” he writes at CNN.