Wed Jan 2, 2013, 08:21 AM
xchrom (106,785 posts)
An Ugly, Ugly, Ugly Deal by Robert Borosage
But no one should be fooled. This is an ugly deal, with foul implications for the coming months.
1. Setting Up the Next Extortion
The most ominous part of the deal is what was left out. The deal makes no provision for lifting the debt ceiling. It postpones the sequester (automatic cuts in domestic and military spending) for only two months. It is a smaller deficit reduction package than that originally sought by the president. It therefore sets up the right-wing House zealots to hold the economy hostage once more, while demanding deep cuts in public services (known as cuts in domestic spending), backed by a media frenzy about deficits. And while Social Security, Medicare and Medicaid escaped unscathed in this deal, they will be the prime targets in the coming debate.
2. Hiking Taxes for Working Americans; A Million Jobs Lost
By allowing the payroll tax cut to expire, every working American gets a tax hike of 2% of their income (up to about $113,000 in income). A worker making $50,000 a year will pay an extra $1,000 in taxes. Payroll checks will be cut. Belts will have to be tightened even more. That will lower demand, producing job loss totaling up to an estimated million jobs. (Taxes on the wealthy go up also, but those have only marginal effects on jobs).
3. Compromising the Compromising President
President Obama sensibly told Republicans that he would not sign any bill or agree to any deal that extended the Bush tax cuts on those making over $250,000. He had stumped on that across the country on this pledge and received a mandate from the voters. Polls showed the majority of Americans were with him. With all the Bush tax breaks due to expire, Republicans were faced with letting taxes go up on everyone just to defend tax breaks for the richest Americans. The President began the negotiations saying this was not negotiable. He could not have been in a stronger position.
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An Ugly, Ugly, Ugly Deal by Robert Borosage (Original post)
Response to xchrom (Original post)
Wed Jan 2, 2013, 09:18 AM
ProSense (116,387 posts)
2. "By allowing the payroll tax cut to expire"
Wait, when the payroll tax cut was enacted, everyone claimed it was a secret Obama plot to undermine Social Security. Now, it's a good thing?
Even those who supported it acknowledged that it had to be temporary.
Response to ProSense (Reply #2)
Wed Jan 2, 2013, 10:14 AM
Dawgs (12,035 posts)
3. You're missing the point.
The problem with the payroll tax cuts expiring (which they should) is that the lower middle class will lose $1K-2K a year becuase of it. The rich will barely be affected by it. In other words, the rich made out great in this "deal" while the middle class gets kicked again.
Democrats/Obama should have found a way to replace the tax increase for the middle-class with something else.