With a pre-dawn vote yesterday, the Senate overwhelmingly approved a compromise package that undoes the Bush tax cuts for individuals making $400,000 a year and families making $450,000, raises several other taxes and limits personal exemptions.
And then in the House last night, despite conservative Republicans having serious misgivings with its terms, it passed by a vote of 257 to 167, with 85 GOPers voting yea along with 172 Democrats.
So the so-called fiscal cliff has been avoided: there will be no automatic tax-rate hike for all Americans instead of just the wealthiest. But, as Rep. Jeff Fortenberry (R-Neb.) noted, the cliffhanger has been traded in for “a journey over the fiscal mountains.”
That’s because the last-minute deal simply postponed dealing with spending cuts, entitlement reform and trimming the national debt for another two months.
Indeed, according to the Congressional Budget Office, the package raises taxes by $620 billion while cutting spending by only $15 billion — a 41-1 ratio. Plus it adds $329 billion to the federal deficit in 2013, increasing it by $3.9 trillion over 10 years.
That means an even bigger battle soon. And, almost certainly, an even bigger political drama than the one America just witnessed.
This time, however, Obama will be without his biggest rhetorical weapon: his insistence on what he so misleadingly called “tax fairness.” Which, Republicans hope, means he’ll have to give more ground, provided they hold firm.
Because the fiscal-cliff package does next to nothing on the national debt and the budget deficit, at the risk of damaging the economy as it struggles to move forward.
In fact, the president’s chief goal throughout the talks was blatantly political, to portray the GOP as eager to sacrifice the middle class in order to protect the rich. (How ironic that most Democrats once vehemently opposed what they’re now staunchly defending as “tax cuts for the middle class.”)
Yet Obama — whose only contribution to the negotiations was creating ill will on both sides — made it clear that he hasn’t finished hiking taxes: Even before the House vote, the White House said that “continuing to ask the wealthy to do a little bit more” — i.e., pay even more taxes — “will be part of a balanced approach.”
In other words, he’s going to play the class-warfare card for everything it’s worth.
But the fiscal-cliff compromise actually brings in $200 billion less in tax revenue than did House Speaker John Boehner’s Plan B, which the president opposed (as, embarrassingly for Boehner, did House Republicans).
The whole idea of the fiscal cliff was to create a situation so precarious that Washington would have no choice but to reach a comprehensive solution.
But congressional fecklessness and presidential arrogance combined to once again avoid the unpleasant — but necessary — business of restoring the nation’s economic stability.
For all the back-patting now under way on Capitol Hill, the road ahead is sown with mines.
Take 10, America. It ain’t over.