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The deal that Congress came to on the fiscal cliff last week was a combination of half-measures, compromise, and kicking-the-can that nobody seemed to like but was overwhelmingly approved. Most of the meaures that constituted the cliff stood poised to harm the economy over the next two years - and Congress' failure to offset the cost of averting the cliff will result in a worse economy in the long run. As Americans everywhere found out with their first paychecks of the new year, Congress failed to reauthorize the temporary payroll tax cut that expired. This could result in between 300,000...

BEGIN TRANSCRIPT RUSH: This is hilarious. As you know, ladies and gentlemen, beginning with the first day of the year, and because of the fiscal cliff deal, the temporary partial tax cut on the Social Security tax expired. There was a temporary partial exemption on the payroll tax. I've been asked if most people noticed it. They didn't notice it until they were told about it. It added up to, depending on your income, it could be a thousand dollars a year that you had extra because of this partial tax. Anyway, on January 1, that partial temporary tax cut...

Princeton, New Jersey (CNN) -- Somewhere in Texas, former President George W. Bush is smiling. Although some Democrats are pleased that taxes will now go up on the wealthiest Americans, the recent deal to avert the fiscal cliff entrenches, rather than dismantles, one of Bush's signature legacies -- income tax cuts. Ninety-nine percent of American households were protected from tax increases, aside from the expiration of the reduced rate for the payroll tax. In the final deal, Congress and President Barack Obama agreed to preserve most of the Bush tax cuts, including exemptions on the estate tax. When Bush started...

Idaho Republican Rep. Raul Labrador said on Sunday that he’s “not really sure” Democrats want to avoid going over the fiscal cliff, and that they’re like “bank robbers” who want to raise taxes on everyone. … “They have tried to get us (Republicans) to fight against each other on taxes when—I’m not really sure that they don’t want to go over the fiscal cliff,” he said. “They want to expand the growth of government. They need more revenues. You know, Democrats are like bank robbers. You don’t have the money in the 2 percent—the money is in the 100 percent....

Late yesterday afternoon, the Seventh Circuit granted an emergency injunction against the HHS mandate — preventing its enforcement against an Illinois business and its owners. My colleagues at the ACLJ represent Korte & Luitjohan Contractors, Inc., a family-owned, full-service construction contractor. The company is located in Highland, Ill., and employs about 90 workers. The brief opinion is worth a read in its entirety, but two parts stand out. First, the court disagreed with the Tenth Circuit’s recent decision rejecting Hobby Lobby’s request for a similar injunction. In a key paragraph the court stated: The government also argues that any burden...

Leading Democrats are putting together fallback proposals if Washington fails to reach a deal on the “fiscal cliff” that would allow the party to cast itself as seeking to cut taxes. “Of course, I’ve got a backup plan in the event that we don’t succeed here,” Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, said Friday. “I’m sure the White House has one too.” Tax rates are set to expire on most households in January if Congress does not act to extend some of the rates, something some Democrats have long seen as giving their party an advantage....

While most media accounts of the fiscal cliff fiasco have focused on Republicans' travails, few have adequately noted Democrats' starring role in our current dysfunction.  Harry Reid obstructed a vote on the president's plan, Nancy Pelosi whipped votes against her own erstwhile plan, and the president has fully retreated from ideas he supported as recently as last year.  A pre-Christmas Wall Street Journal article walks readers through the failed negotiations, and two recurring themes are woven throughout: (1) Obama has zero interest in meaningful concessions on his end, and (2) Obama is supremely confident in his ability to stick Republicans...

President Obama has threatened House Speaker John Boehner that if no deal is struck on the “fiscal cliff,” he will use his Inaugural address and State of the Union speech next month to blame Republicans, according to the Wall Street Journal. In the Journal’s behind the scenes account of how fiscal cliff talks between Obama and Boehner hit a wall, what comes across is that the president is emboldened by his reelection and eager to extract more concessions from Boehner than he was willing to accept during last summer’s debt limit talks. This excerpt from the piece is revealing: Mr....

Statesmanship at its finest: during fiscal cliff talks, President Obama reportedly told Speaker Boehner that he would use his two major speeches in January to blame Republicans for the stalled deal. According to the Wall Street Journal, the president wasn't too happy with the options House Republicans were willing to present, and made it clear he was willing to throw the GOP under the bus for the nation's financial woes. Mr. Obama repeatedly lost patience with the speaker as negotiations faltered. In an Oval Office meeting last week, he told Mr. Boehner that if the sides didn't reach agreement, he...

Congressional leaders and President Barack Obama called Friday for a return to negotiations to avert the so-called fiscal cliff, a day after talks cratered in a very public fashion when Republicans abandoned House Speaker John Boehner's backup plan. In truth, talks to secure a big deficit-reduction deal had already broken down Monday afternoon in the office of Mr. Boehner (R., Ohio)......[snip]A review of the negotiations, based on interviews with a dozen aides and lawmakers, suggests the problems lay in Mr. Boehner's inability to coax his rank-and-file to support a deal that raises taxes on higher-income Americans. Another factor was what...

A Wall Street Journal report detailing the broken-down status of talks between President Barack Obama and House Speaker John Boehner on the year-end “fiscal cliff” reveals that Obama threatened to use both his inaugural and State of the Union speeches to blame Republicans if there’s no deal. Negotiations reportedly came to a standstill after Boehner proposed increasing the tax rate on top earners: Mr. Obama repeatedly lost patience with the speaker as negotiations faltered. In an Oval Office meeting last week, he told Mr. Boehner that if the sides didn’t reach agreement, he would use his inaugural address and his...

Obama: I Met Republicans Halfway On Taxes, More Than Halfway On Spending THE PRESIDENT: Good afternoon, everybody. Over the last few weeks I've been working with leaders of both parties on a proposal to get our deficit under control, avoid tax cuts -- or avoid tax hikes on the middle class, and to make sure that we can spur jobs and economic growth -- a balanced proposal that cuts spending but also asks the wealthiest Americans to pay more; a proposal that will strengthen the middle class over the long haul and grow our economy over the long haul. During...

One of the more hysterical components of the fiscal cliff saga is watching the Democrats falling all over themselves to champion the importance of preserving the existing tax rates – the George W. Bush Tax Rates – for nearly every American taxpayer.  The President last offer to Speaker Boehner would preserve the Bush Tax Rates for at least 99.5% of all taxpayers according to IRS data (all but individuals above $400,000 annual income). To be clear, there's nothing funny about the fiscal mess that our nation is in.  It's real.  It's serious.  And, if Washington fails to get its act...

Last week, Republicans proved they are not a governing party. Next week we will see whether Democrats are. A governing party would have, reluctantly, passed Speaker John Boehner's Plan B, which would have preserved the current tax rates on everyone with incomes under $1 million. Passage would have put Senate Democrats on the spot, since they voted for a similar measure in 2010. They might have engaged in negotiations with Boehner that could have been more productive than his negotiations with Barack Obama this month and in the summer of 2011. Then, as Bob Woodward reports in his book "The...

Washington -- William McGurn, the esteemed Wall Street Journal columnist and soon-to-be editor of the editorial page of the New York Post, has made an interesting observation about the fabulous Bush tax cuts that are about to lapse. They amount to a substantial sum of money for a middle-class family. For the middle class it will be a big deal if they disappear. President Barack Obama has portrayed the Bush tax cuts as a rich person's tax cut, but now he is portraying them as a huge tax break for the middle class. Of a sudden he says do not...

The fiscal cliff negotiations seem to be foundering on Barack Obama's insistence on higher tax rates on high earners and House Republican leaders' insistence on opposing them. The president believes he has a mandate from voters for his position, and House Republicans believe they have a mandate from voters for theirs. The real argument here is over the size and scope of government. Under Barack Obama, federal outlays -- the technical term for federal spending -- have increased to 24 and 25 percent of gross domestic product. That's a higher level of federal spending than in any year since 1946,...

We are still borrowing more than $1 trillion a year. Barack Obama has added more than $5 trillion to the national debt in just his first term alone. Such massive borrowing is unsustainable. Someone somehow at some time has to pay it back. Obama would agree. He once alleged that George W. Bush's much smaller deficits were "irresponsible" and "unpatriotic." Obama himself vowed to cut the budget deficit in half by the end his first term. Instead, Obama's annual deficits have never gone below $1 trillion. Three ways to establish a long-term trajectory toward a balanced budget were under discussion....

Fiscal Policy: Talk of Clinton-era tax rates ignores the fact that the former president, working with a GOP Congress, cut spending as a share of GDP and produced four balanced budgets by focusing on growth, not spending. Even as he pushes $150 billion in new "stimulus" spending, President Obama argues that to avoid the fiscal cliff we must return to Clinton-era tax rates for wealthy households, with a top marginal rate of 39.6% vs. the Bush-era 35%. Clinton's was an age of balanced budgets and economic growth. But it was also an era of budgetary restraint in which both parties,...

Republicans find themselves in the unenviable position of being forced to agree to raise taxes on those earning more than $200,000 (the actual cut off for those Mr. Obama refers to as "millionaires and billionaires"), or risk being blamed for a tax increase on all taxpaying Americans. They will probably agree, which means it's a politically unavoidable policy, not a good policy. Why does Obama insist upon raising taxes? Not because he believes it will improve the economy, and not because he believes it will increase receipts to the Treasury. The proposed taxes would bring in about $80 billion a...

We can get back to discussing GOP minority constituent recruitment soon, but in the meantime, we have a fiscal cliff issue that beckons -- the real fiscal cliff (America's imminent financial collapse), not the government shutdown molehill everyone is agonizing over. Congressional Republicans should look at their party's loss in the presidential election as liberating. They surely now understand that the strategy of soft-pedaling Obama's record and agenda doesn't work. They surely grasp that its fear of calling President Obama out on his real intentions and the disastrous consequences of his destructive policies just plays into his hands and enables...