White-Flag Surrender on Cliff

Townhall.com ^ | January 2, 2012 | Mike Shedlock

[Kaslin]

For all the pissing and moaning over the fiscal cliff, there was never much of a "cliff" in the first place. Worse yet, every delay made matters increasing irresponsible in terms of addressing the deficit.

The final result, as passed by the Senate, watered down budget cuts from $600 billion to a mere $12 billion.

Moreover, the extension of the tax cuts will add almost $4 trillion to the deficit over 10 years according to CBO analysis of the American Taxpayer Relief Act.

Nonetheless, that was not enough for liberal democrats who thought they did not get enough out of the deal.

The "Fiscal cliff" moves to House, where a slim hope remains that Republicans will punt this bill a mile high.

In a rare late-night show of unity, the Senate voted 89 to 8 to raise some taxes on the wealthy while keeping income taxes low on more moderate earners.

Republicans, unhappy that the bill contained over $600 billion in tax increases but only around $12 billion in spending cuts, said they may change it more to their liking and send it back to the Senate. Party leaders planned to take the temperature of rank-and-file lawmakers over the afternoon before deciding on a course of action.

"My recommendation would be not to take a package put together by a bunch of sleep-deprived octogenarians on New Year's Eve," said Representative Steve LaTourette, a moderate Republican from Ohio who is a close ally of House Speaker John Boehner.

"My district cannot afford to wait a few days and have the stock market go down 300 points tomorrow if we don't get together and do something," Representative Steve Cohen, a Democrat from Tennessee, said on the House floor.

The White House has floated $600 billion worth of spending cuts in earlier negotiations, and Obama said he would be willing to tackle deficit reduction over the coming months.

"There's more work to do to reduce our deficits, and I'm willing to do it," he said in a statement urging the House to pass the current bill.

Republican Representative Tom Cole said his House colleagues should pass the Senate bill rather than try to change it.

"We ought to take this deal right now, and we'll live to fight another day," Cole said on MSNBC.

Only 5 Republicans Voted Against

The Tax Foundation has additional Details of the Fiscal Cliff Tax Deal

At 2AM this morning, the Senate passed H.R. 8, the American Taxpayer Relief Act of 2012, by a vote of 89-8. Voting no were Bennet (D-CO), Carper (D-DE), Grassley (R-IA), Harkin (D-IA), Lee (R-UT), Paul (R-KY), Rubio (R-FL), Shelby (R-AL). Not voting were DeMint (R-SC), Kirk (R-IL), and Lautenberg (D-NJ). TaxProfBlog has the text of Senate-passed bill  (157 pages). The Joint Committee on Taxation (JCT) has also produced a revenue estimate, as has the Congressional Budget Office (CBO).

White-Flag Surrender

Somehow, right before the election, budget cuts of 10-1 over tax hikes were not acceptable to Republicans. Now, they have settled for a package that essentially makes no budget cuts at all.

This is one of the biggest white-flag political surrenders in history.

Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade

President Obama made the biggest understatement ever regarding the budget deficit: "There's more work to do to reduce our deficits".

More work? Pardon me for asking, when was "any" work done to reduce the deficit? Ill-fated attempts to reduce the budget deficit have only gone in reverse.

Finally, it's important to note that the bill that passed the Senate is technically a tax cut. ZeroHedge accurately sums up the situation as follows "Obama Tax Cut" To Add $4 Trillion To Deficit Over Next Decade.

 

As ZeroHedge points out, it's no longer the "Bush Tax" cuts. 

[Sacajaweau]

Lest we forget....Seniors did NOT get a COLA for 2 years. This year we got 1.7%.....and Medicare Part B went up $5 per month....or took 1/3 of my COLA.

I now pay 10% of my SS check each month for Medicare Part B...and I have to buy a supplement, too.

[Tau Food]

This whole thing was just not handled well at all.

First, if the GOP was going to fold, they should have done so before the new year when taxes went up automatically. Now, an ugly irony is that Obama has signed the largest tax cut in human history.

Second, the GOP should have withheld all support for this bill without large spending decreases. Now, the spending issue has been separated from the tax issue. Now, "Obama the Tax Cutter" will require the GOP to specify what cuts the GOP wants to make to Social Security and Medicare and "Obama the Tax Cutter" will be there to protect the old folks from ruthless Republicans who don't care about old folks.

This just wasn't handled right at all.

[Kaslin]

That is correct. I am getting now a $5 per month increase in my SS check but my medicare went up almost double the amount I get for ss. You just can’t win for losing

[kabar]

Medicare Part B went up $5 per month

Think of it this way. Your Medicare Part B premiums only pay for 25% of the costs of the program. The remaining 75% is paid, by law, using money from the General Fund. In 2011 this amounted to over $200 billion. So the working taxpayer is funding your Medicare (and mine). Medicare is a great deal since over your lifetime, you get back three times more in benefits than you pay in contributions. Is this a great country or what?

[Sacajaweau]

Wow...Who taught you math....I paid into that fund since it started. At the same time and until age 65...I paid health insurance out of my own pocket. My benefits since age 65 have amounted to $345 to date and I’m 70.

[kabar]

Wow...Who taught you math....I paid into that fund since it started. At the same time and until age 65...I paid health insurance out of my own pocket. My benefits since age 65 have amounted to $345 to date and I’m 70.

This isn't about you as an individual, but facts are facts. And remember that the biggest medical expenses occur in you last few years of life. As an aside, I have a hard time believing you only had $345 in medical expenses since age 65. No physicals, lab tests, etc.?

This graph shows that the average man and woman (average defined in the study as average income over their working lives and living to the average life expectancy) who start receiving benefits in 2010 get over 3 times more in benefits than they pay in to the system! Of importance, the study accounts for inflation by calculating all past taxes and future payments in 2010 dollars to provide an accurate comparison.

If the notion that Medicare recipients are simply "getting back what they paid in" is false then where is the money coming from? Simply, the excess received is being borrowed from younger generations and the cost is more than we can bear.

[BO Stinkss]

“Moreover, the extension of the tax cuts will add almost $4 trillion to the deficit over 10 years.”

This statement is logical only if you believe that all income belongs to government.
This is a favorite liberal argument - by not raising your taxes, the deficit increases. This WAS NOT a tax cut. This was an agreement not to raise taxes on some.