Just in case you are tuning in to the ever-changing saga about the fiscal cliff and whatever deal may be finalized in the late hours of 2012, or the early hours of 2013, here is the latest. According to most reports I have read, a deal is close to being done (could it be the deal was done weeks ago). Those same reports are saying the deal will include an agreement on the tax issues of the fiscal cliff, but nothing on spending. Unless you count extending unemployment benefits for another year as a victory on spending.
(Hot Air) As for details, there are no new spending cuts, only discussion of tax rates and how much more we’ll spend. There are wins for sanity in the mix (permanent AMT fix), but this is not a “deficit reduction” plan, folks. Welcome to this warped town. Negotiators will call it a plan to make “wiser” cuts than sequestration would have, but sentient beings are right to be concerned about whether they will ever materialize.
I would now like to see a show of hands of anyone who is not surprised at the outcome we are likely to see in the coming hours. I don’t know about you, but this is what frustrates me so much about Washington and both political parties. For nearly a year, we have listened to our political leaders, Democratic and Republican alike, as they have foretold of the coming fiscal cliff. Much ado was made of how bad the coming tax increases would be for the American economy. Unless you were making over $250,000 as a couple. That classified you as rich and as a rich person, you needed to pay your fair share. Little was said about the spending cuts, other than they would also be bad for the economy. If you failed to grasp the logic of that theory, you aren’t the only one.
The deal we are likely to see will probably include a deal to make the current tax rates permanent, up to $400,000 for individuals, or $450,000 for couples. They will go up to 39.6% after that. Unemployment benefits will be extended, ie. more unnecessary spending, and any mention of spending cuts is out of the question. The sequestration spending cuts will probably be put off for at least two months and I’ll be surprised if they ever surface again. Hence, my frustration. You’ll just have to forgive me for sounding so skeptical about anything coming out of Washington.
The Democrats, especially President Obama, have been very successful at portraying the fiscal cliff as being all about taxes. Everywhere you turn, you can hear them talking about the coming tax increase on the middle class. Taxes, taxes, taxes! That’s all they want to talk about. As for the Republicans? Well, they have been missing in action. For the most part, they have been totally and completely unsuccessful at turning this discussion back to its proper roots, which is the uncontrolled spending taking place in Washington. How many times do we have to say this? Taxes are not the problem. It’s the spending, stupid!