If you want to read at length about the latest in the fiscal cliff negotiations and legislation, go to Memeorandum and get cracking.
But here’s my shorter two cents:
After doing a lot of reading on the right side of the blogosphere, in articles and especially comments sections, I get the impression that a lot of conservatives are hopping mad that the Republicans in Congress voted to raise taxes for those who make over 450/400K (that is, those conservatives who hadn’t already deserted the GOP prior to the vote). I agree that it’s incredibly frustrating that Boehner et. al. didn’t see fit to do something stronger and more conservative, just as a statement, knowing that it would be defeated in the Senate.
But as I (and others) have written before, the defeat in the 2012 election—not just Obama’s victory, but the failure to do better in the Senate—sealed the Republicans’ fate and took away a great deal of their negotiating power. This doesn’t mean that Boehner is not at fault; he is, most particularly for setting up this situation in the first place during negotiations last year.
But it’s important to note that, in the political sense, this bill may remove at least some of the tried-and-true “Republicans won’t cooperate” argument. They did.
John Hinderaker looks on the bright side:
But what happens now that Obama has gotten his way? It will soon become apparent that the fiscal cliff deal, including precisely the tax increases that Obama has been demanding for four years, makes hardly a dent in the deficit. At best, it will reduce the deficit by five or six percent. We will continue to run up deficits of close to $1 trillion a year, and the national debt will continue to grow, as Obama has always intended. This fact can’t be hidden; it will be reported. Journalists who have pulled their punches in the past because they wanted Obama to be re-elected will now begin to ask, what are we going to do about the deficit and the debt? At some point, perhaps sooner rather than later, interest rates will begin to rise, at which point the debt issue will become a crisis. And Republicans will say: we told you so.
That’s too optimistic for me. For example, I can’t even imagine that Hinderaker is correct about the MSM.
The most important negotiations are still to come, the ones where Obama refuses any cuts except in defense, and the Republicans either go belly-up or belly-partway-up.
And as this article points out, the current bill will have the effect of raising payroll taxes for middle class Americans:
But lawmakers’ decision not to reverse a scheduled increase in the payroll tax that finances Social Security, while widely expected, still means that about 77 percent of households will pay a larger share of income to the federal government this year, according to the center’s analysis.
The tax this year will increase by two percentage points, to 6.2 percent from 4.2 percent, on all earned income up to $113,700.
Indeed, for most lower- and middle-income households, the payroll tax increase will most likely equal or exceed the value of the income tax savings. A household earning $50,000 in 2013, roughly the national median, will avoid paying about $1,000 more in income taxes — but pay about $1,000 more in payroll taxes.
I don’t even pretend to know what effect this will have on the American public, except to say I think that, although “widely expected,” most people don’t follow politics that closely and therefore this aspect of the bill will still be a surprise. As to who will be blamed for it, I’m not at all sure. Previous experience says it would be the Republicans—that’s Obama’s and the left’s and the MSM’s specialty. But something in my gut says that the American public might just give this one bipartisan credit/blame. Congress in general hasn’t exactly ingratiated itself with voters in recent years.
[ADDENDUM: Many more links here from Instapundit on why this isn’t necessarily such a bad deal for the Republicans.]