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Showing Original Post only (View all)Robert Reich : The deal emerging from the Senate is a lousy one. Let me count the ways: [View all]
The deal emerging from the Senate is a lousy one. Let me count the ways:
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1. Republicans havent conceded anything on the debt ceiling, so over the next two months as the Treasury runs out of tricks to avoid a default Republicans are likely to do exactly what they did before, which is to hold their votes on raising the ceiling hostage to major cuts in programs for the poor and in Medicare and Social Security.
2. The deal makes tax cuts for the rich permanent (extending the Bush tax cuts for incomes up to $400,000 if filing singly and $450,000 if jointly) while extending refundable tax credits for the poor (child tax credit, enlarged EITC, and tuition tax credit) for only five years. Theres absolutely no justification for this asymmetry.
3. It doesnt get nearly enough revenue from the wealthiest 2 percent only $600 billion over the next decade, which is half of what the President called for, and a small fraction of the White Houses goal of more than $4 trillion in deficit reduction. That means more of the burden of tax hikes and spending cuts in future years will fall on the middle class and the poor.
4. It continues to exempt the first $5 million of inherited wealth from the estate tax (the exemption used to be $1 million). This is a huge gift to the heirs of the wealthy, perpetuating family dynasties of the idle rich.
Yes, the deal finally gets Republicans to accept a tax increase on the wealthy, but this is an inside-the-Beltway symbolic victory. If anyone believes this will make the GOP more amenable to future tax increases, they dont know how rabidly extremist the GOP has become.
The deal also extends unemployment insurance for more than 2 million long-term unemployed. Thats important.
But I cant help believe the President could have done better than this. After all, public opinion is overwhelmingly on his side. Republicans would have been blamed had no deal been achieved.
More importantly, the fiscal cliff is on the Presidents side as well. If we go over it, he and the Democrats in the next Congress that starts later this week can quickly offer legislation that grants a middle-class tax cut and restores most military spending. Even rabid Republicans would be hard-pressed not to sign on.