Tuesday, January 1, 2013
Matt Iglesias: "From the viewpoint I outlined on December 13—"Cutting Spending to Obtain Tax Hikes Is Nuts"—this is a decent deal. Relative to what Obama had already agreed to, there are no spending cuts whatsoever in this package. In exchange, he ended up securing much less tax revenue than he was initially looking for. That's an epic defeat for the Pete Peterson and "Fix The Debt" crowd, but even though liberals are disappointed with this they didn't end up actually losing anything the way they were going to in deals that cut Social Security benefits or raised the Medicare eligibility age. Conservatives, meanwhile, can say that in the face of an objectively unfavorable situation they kept taxes remarbly low and have maintained their leverage to press for further spending cuts in February."
The New York Times sees pluses and negatives in the deal: For the first time since President George W. Bush began the country’s long slide into debt by cutting taxes in 2001, an agreement was reached late Monday in the Senate to raise income taxes on the rich.
That’s what makes the deal significant: assuming it is approved by the House, it begins to reverse the ruinous pattern of dealing with Washington’s fiscal problems only through spending cuts. Nonetheless, this deal is a weak brew that remains far too generous to the rich and fails to bring in enough revenue to deal with the nation’s deep need for public investments.
Given that the Bush-era tax cuts expire on Jan. 1, Republicans were forced to give ground on their philosophical opposition to higher taxes, but they made it impossible to reach a farsighted agreement that truly grappled with government’s role in fostering improvements to education, transportation and manufacturing.
JimR's diary @ Daily Kos: "This greatest hoax in the history of American politics is only possible because almost half the country believes exactly the opposite of proven macroeconomic time-tested theory, and our own nation’s history.
The entire debt debate is a farce and an insult to the collective intelligence of a formerly civilized nation. That’s right, America, we’re a laughingstock among countries.
In America, where the richest of the rich shelter their wealth overseas to avoid paying the taxes the rest of us end up paying for from our own pockets, where corporations took tax giveaways to subsidize moving infrastructure and manufacturing to low wage, environmental law-free hell holes and their intellectual property to tax havens, where 66% of Fortune 600 companies pay zero taxes in any given tax year and the largest get millions in refunds, where virtually zero net jobs were created in eight years after the Bush tax cuts, almost half the country believes Republican orthodoxy that our debt is the main problem, making the plutocracy pay their fair share raises taxes on “job-creating” small businesses, and entitlements must be slashed for our economic survival."
Professor Krugman: "The good news for progressives is that danger #1 has been averted, at least so far — and not without a lot of anxiety first. Romney lost, so nothing like the Ryan plan is on the table until President Santorum takes office, or something.
Meanwhile, in 2011 Obama was willing to raise the Medicare age, in 2012 to cut Social Security benefits; but luckily the extremists of the right scuttled both deals. There are no cuts in benefits in this deal.
The bad news is that the deal falls short on making up for the revenue lost due to the Bush tax cuts. Here, though, it’s important to put the numbers in perspective. Obama wasn’t going to let all the Bush tax cuts go away in any case; only the high-end cuts were on the table. Getting all of those ended would have yielded something like $800 billion; he actually got around $600 billion. How big a difference does that make?
So why the bad taste in progressives’ mouths? It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.
If Obama stands his ground in that confrontation, this deal won’t look bad in retrospect. If he doesn’t, yesterday will be seen as the day he began throwing away his presidency and the hopes of everyone who supported him."
BOOMAN EXPLAINS THE DEAL HERE.