Sunday, December 11th, 2016

Vote for ‘fiscal cliff’ deal correct

1

Vote for ‘fiscal cliff’ deal correct

Congress must tackle spending

Waukesha Freeman Opinion, Page A6, 1/3/13

 

It was inevitable some deal had to be reached, just as it was inevitable that some taxes were going up. Expectations by some conservatives that Republicans would somehow prevail and no taxes would go up were completely unrealistic.

The longer it appeared Republicans were seriously going to allow the country and the economy to go over the “fiscal cliff,” the more they were going to get clubbed in public opinion like Bugs Bunny whacking Pete Puma.

For starters, where were conservative Republicans going to appeal for support? Republicans lost the 2012 elections, including even a few seats in the House of Representatives. President Barack Obama campaigned on raising taxes on “the rich” and the voters supported him. Why would they suddenly change their minds two months later?

There was little appetite in the electorate to curb spending. Republicans campaigned against the $16 trillion in debt, including the $6 trillion added in four years by Obama, and still could not take back the Senate.

Democrats perceived they had an electoral mandate to raise taxes, and given two-thirds of the legislative process was in their hands, they were going to raise taxes even if it meant going over the “fiscal cliff” like Wile E. Coyote.

Both sides predicted going over the “fiscal cliff” would send us into a recession, a point repeated by the president Tuesday night. The expiration of the Bush-era tax cuts meant taxes would go up on nearly everyone, not just “the rich,” whomever they may be.

That’s not to say we have avoided another recession. But raising taxes on everyone could have been the final blow to a slow economy.

Given the alternative, it’s understandable that Republican Congressman Paul Ryan and Senator Ron Johnson ended up voting for the bill – even if it does not get the spending cuts they wanted.

The best Republicans could hope for was to mitigate the damage. Mitigate it, they did.

With the permanent “repair” to the Alternative Minimum Tax, 30 million middle-class taxpayers don’t have to worry about a tax increase on what they earned in 2012, the year just passed.

Instead of raising the tax rate on individuals making over $250,000 per year, Obama conceded to only raising taxes on individuals making over $450,000 per year. Not as good as not raising taxes at all, and the economy will certainly take a hit, but it’s better than what the voters voted for in November.

Unfortunately, the payroll tax is going up. The tax “holiday” we have all enjoyed has ended and we can all expect to see approximately 2 percent more out of every paycheck to cover Social Security. This was going to happen regardless of the deal cut because neither side wanted this on the table.

The bill does not do anything to simplify the tax code. It even retains the tax credit for wind power another year.

This is a horrible deal, too, because it does not address government spending. OK, we now have a plan for how much money the government plans to take in. We still don’t have a real plan for controlling on what it’s spent.

Congress even voted to hold off on sequestration for two months. Probably not coincidentally, that will be when Congress has to debate raising the debt limit again. Call it “Fiscal Cliff 2: the awful sequel.”

The federal credit card is still in the hands of the irresponsible teenagers that put us in this debt crunch, and we just dropped them off at the mall again for another couple of months.

Standard and Poor’s already lowered this nation’s credit rating last year. We’ll see if we have learned any lessons from the experience or if the debt ceiling will rise without any real plan to control spending.

Wait until Obama and the Democrats learn the hard way that taxing “the rich” more won’t erase the budget deficit or pay down the debt.

What I don’t see in the legislation is who is responsible for handing Baby New Year the bill for all of the government borrowing. After all, he will be stuck paying for it all, and anyone unlucky to be born with him.

(James Wigderson is a blogger publishing at http://www.wigderson.com and a Waukesha resident. His column runs Thursdays in The Freeman.)

Be Sociable, Share!

Print this entry