Right-Wingers Who Think They Got 'Rolled' by Obama In Fiscal Cliff Deal Are Totally Crazy
Rep. Eric Cantor (R) arrives at the US Capitol on January 1, 2013 in Washington. The number two US House Republican emerged Tuesday as a key holdout against the fiscal cliff deal.
I thought that by this point, I was beyond the capacity to be shocked by the delusions held by the American Right. But my jaw dropped when I read that a number of high-profile conservatives are outraged about the fiscal slope deal, and believe they've been “rolled” by Obama. The very notion is wildly delusional.
First, consider the context. Despite the fact that big majorities of the population have consistently told pollsters that they want to see the “Bush tax cuts” end for the top 2 percent of households – and taxes kept low for the other 98 percent – it's been quite clear that the GOP's first priority has been to hang onto those cuts for the wealthiest Americans. And how have they done?
In 2008, Obama ran on letting the Bush cuts for high earners expire while protecting the middle class, and won a landslide victory over John McCain. But those rates for the top earners remained for the entirety of his first term, including the two years when Dems held both chambers of Congress.
Which brings us to 2012. Obama runs on the same promise again – let the Bush tax cuts for the top 2 percent expire, prevent a tax hike from hitting the other 98 percent. He defeated Mitt Romney decisively.
Two months later, we hit this contrived fiscal slope. And we started down it – at midnight on New Year's Eve, the Bush tax cuts finally expired.
Some progressives have argued that one of Obama's “wins” in the deal was breaking the Republican pledge never to raise taxes, ever. But because the Bush cuts expired a day before this deal was passed, that's not technically true. No Republicans had to vote for a tax increase, and Grover Norquist's pledge remains intact.
And the tax policy center has crunched the numbers on what are now the Obama tax cuts.
The deal made the Bush tax cuts permanent for 65 percent of households in the top 2 percent. They are now the baseline.
The cutoff for the estate tax increased from $1 to $5 million, and is now indexed for inflation. That's permanent.
And the very richest households' capital gains taxes were permanently cut from 35 percent to 20 percent.
As for the middle class and working poor, their modest share of the Bush tax cuts are now permanent as well, but because the Dems' payroll tax cut was allowed to expire, their taxes will nonetheless go up. And not by a little -- it'll "cost a typical worker about $1,000 a year, and two-earner family with six-figure incomes as much as $4,500," according to the Associated Press.
So, after Democrats won two elections promising to raise taxes on the top 2 percent while protecting the middle class, the fiscal slope resulted in the lion's share of the Bush tax cuts for the wealthiest becoming permanent, and taxes went up on the middle class.
Meanwhile, the deal created another contrived fiscal cliff – actually, a series of cliffs – in the next few months. First, the debt ceiling needs to be raised. Then, the deep “automatic” spending cuts known as the “sequester” kick in. Finally, at the end of March, the budget resolution that's been keeping the government running expires.
Obama says he refuses to negotiate on the debt limit, and that may be true, but that means little because of these other opportunities for the GOP to hold the economy hostage.
Senate minority leader Mitch McConnell promised that he'd use that opportunity to extract concessions. “The moment that [Obama] and virtually every elected Democrat in Washington signed off on the terms of the current arrangement, it was the last word on taxes,” he said. “That debate is over. Now the conversation turns to cutting spending.... And the upcoming debate on the debt limit is the perfect time to have that discussion.”
Meanwhile, Obama has given up much of his leverage for the next round by taking high-end tax cuts out of the debate.
This is what conservatives see as being “rolled" by Obama. And you wonder why it's so hard for the two parties to come to an agreement.
Unfortunately, the clear losers in this fight are you and me and the people we know. The ultimate result of the deal is that we'll be taking money out of the economy rather than stimulating growth right in the middle of a painfully sluggish recovery . The Washington Post reports that even before the next fight, we're "now on pace for European levels of austerity for 2013." The Post's Brad Plumer writes:
A back-of-the-envelope calculation suggests Congress has enacted around $304 billion in tax hikes and spending cuts for the coming year, an austerity package that comes to about 1.9 percent of GDP. (That’s merely the size of the cuts and taxes; it’s not necessarily the effect on growth.)
That's deeper "austerity" than that which pushed the UK and Spain into "double-dip" recessions. The Associated Press reports that economists are cutting their 2013 growth forecasts for the U.S. economy as a result of both the deal Congress passed, and the uncertainty caused by the looming cliffs it created.