The Republican Party Is the Problem

Gage Skidmore / Flickr

After weeks of negotiating, we have a deal on the fiscal cliff, which—in true, congressional fashion—passed hours after the government went “over” the cliff.

The details of the deal are straightforward: Tax rates will rise permanently to Clinton-era levels for families with income over $450,000 and individuals with income over $400,000. For everyone below that ceiling, taxes will remain at Bush-era levels. Likewise, for families and individuals at that income threshold, the taxes on capital gains will rise to 20 percent, while staying at 15 percent for everyone else. Given the financial situation of most Americans—who don’t earn much, if anything, from investments—this is a good move, considering the circumstances.

Estate taxes will rise to 40 percent, but Republicans were able to win a key concession—estates up to $5 million are exempt from the tax, which amounts to a large tax giveaway for a small number of wealthy families. The deal also reinstated the phase-out of personal exemptions, with a starting income threshold for those making $250,000. And, in a move that guarantees a repeat performance of this fight, the automatic spending cuts to all federal spending—i.e., the sequester—will be delayed for two months.

On the whole, this was a huge compromise on the tax goals President Obama outlined at the beginning of last month. In return, however, he received a fair amount of funding for anti-poverity and stimulus programs. The expansion of tax credits for lower-income Americans—initially paid for by the American Recovery and Reinvestment Act—will be extended for five years. This includes the Earned Income Tax Credit, the Child Tax Credit (originally pioneered by Republicans in the 1990s), and the American Opportunity Tax Credit. Unemployment insurance will be extended for another year (without any offsets to the $30 billion price tag), as will the full package of temporary business tax breaks.

Unfortunately, the most important stimulus program of the last two years—the payroll tax cut—will expire, without any replacement. In practical terms, this means that the average American will see their paycheck reduced by $1,000, with the burden falling hardest on working Americans, who see most—if not all—of their income hit by the payroll tax, which only applies to the first $110,100 of earnings.

It’s obvious why liberals are unhappy with this deal. On tax rates, Obama made huge concessions to the GOP; this agreement is slated to raise just $600 billion over the next ten years, far less than half of what he originally asked for. He also gave up most of the stimulus present in his original offer, leaving a deal that does little to actively reduce unemployment. Indeed, if the fiscal cliff was a bunker buster of austerity, then this agreement swaps it for a standard-issue missile—either way, a large part of Washington has decided that now is the time for fiscal retrenchment.

If there’s a critical omission from this agreement—one that guarantees another crisis—it’s the lack of any deal on the debt ceiling. As was the case in 2011, Republicans will be free to use this routine administrative function as leverage for large cuts to popular (and, for the most part, well-run) programs like Medicare, Social Security, and Medicaid. And with a demonstrated willingness to crash the global economy, odds are good that they will succeed.

Which gets us to the most important takeaway of this entire saga.

The Republican Party is the problem.

President Obama isn’t perfect—he’s a mediocre negotiator, with a penchant for giving away too much. But he’s dealing with a group of fanatical, rabidly anti-government conservatives, who—over the last two years—have threatened to shut down the government, crash the global economy, and induce a second recession in order to lower taxes on the rich and slash spending on a collection of the nation’s most vulnerable citizens.

Judging from the various conservative revolts over the last two weeks, in which House Republicans rejected a conservative plan to deal with the fiscal cliff—“Plan B”—and almost scuttled yesterday’s deal (which was saved by substantial Democratic support), the president holds little leverage, if any, over the GOP. Pace common belief, automatic tax increases on the wealthy aren’t enough to induce a little sanity from congressional Republicans. There’s nothing Obama—or any Democrat—can do to mitigate the policy nihilism of right-wing conservatives in the House.

And so we should expect more of it. Not the least because these same Republicans also won re-election in 2012, in districts that also voted to elect Mitt Romney president. They have no incentive to cooperate, and with the debt ceiling on the horizon, a new opportunity to force crisis.

Comments

President Obama says "$1.2 billion in new revenues," having previously offered less, twice. The Republicans counter with $0. They end up in the middle - by all appearances a worse deal than they would have obtained in either prior negotiation. And it's Obama who is a "mediocre negotiator"?

If you work from the position that the President could have kept the "fiscal cliff" issue alive indefinitely to use as leverage, then perhaps he could have obtained more in the coming weeks and months. If you work from the perspective that neither party wanted to cross that line, he negotiated a pretty good deal that avoided crossing the line.

As they say, where you stand depends upon where you sit.

You people (the author) are either:

a) So STUPID you can't see GOVERNMENT SPENDING KILLS ECONOMIES even though it is ALL AROUND US in History, in Europe, in OUR OWN FAILED "STIMULUS" ... or

b) You're merely CORRUPT, ON THE GRAVY TRAIN (Hollywood tax breaks stuffed into "Fiscal Cliff" come to mind) of Big Government ESTABLISHMENT Grifter Life and THINK YOUR READERS ARE STUPID enough to believe (a).

My money's on (b). And the Election shows YOU'RE RIGHT. For now....

Why don't you give yourself (and everyone unfortunate enough to have to put up with you and your conspiracies) a break. You should move to the woods, off the grid, make your own electricity, and carve your own roads out so that you don't have to depend a lick on the government. Please leave your assault weapons at home. And don't even think of writing a manifesto.

He right.....

Yeah, uh,

(a) Europe is suffering from austerity. Track where the severest austerity has been imposed and where the worst outcomes are seen. (An interesting fact: the more socialist the nation, the better the economy: just look at northern Europe.) Coming out of WWII our debt was huge. Eisenhower spent us out of debt. The rise and fall in the nation's economy after the Depression track fairly closely the money injected into the economy, including the dip after the increased spending was trimmed too early.

Please show us where and when austerity has ever revived an economy. Please also tell us why austerity is supposed to be imposed upon the poor, and the working and middle classes - but somehow would be counterproductive if imposed upon those who can most afford a little belt-tightening. Please explain why the wrong-wingers - including some idiot Democratic wrong-wingers - want to attack the fully-payroll-funded Social Security program, which adds not one penny to the deficit/ debt (even Ronald Reagan proclaimed this truth), but get hysterical when anyone suggests trimming the DoD, which has so much money that they are capable of 'losing' a trillion dollars and have been incapable of producing a single annual internal audit in decades.

(When answering, please refrain from using the idiotic term 'job creators,' as said people have seen their share of the economic burden of paying for government consistently reduced, yet somehow have failed to create all those promised jobs. Please also refrain from abusing the deregulation argument - as that is mainly what brought us this financial crisis.)

(b) Ad hominems - particularly those with no demonstrated relation to reality - are the hallmark of weak arguments and weak minds. Please indicate this corruption or give a logical, fact-based reason to call those who rejected unpopular and unsuccessful governor Romney stupid. (By the way, there were plenty of giveaways of all sorts in the deal - including to NASCAR.)

Your 'conclusion' is based upon no demonstrable argument. (Here's an uncomfortable economic fact: most red states receive more from the federal government than they pay in taxes, while most blue states pay more than they receive. Perhaps you ought to think about that when 'analyzing' the supposed value of wrong-wing economics.)

You are in desperate need of a new user name. (Or your parents named you very wrongly.)

sigh----this author is so predictable. I could write his pieces. It's always the Republicans who are the problem. It's such an intellectually lazy argument. another angle on the problem is that we probably would have solved the current difficulties long ago if we had more women in Congress, say a 50% female Congress. Even Sen. Susan Collins of Maine said that if we had more women the fiscal cliff would have been put to bed long before Christmas:

http://www.womenwintoo.blogspot.com/2013/01/two-steps-forward-two-steps-back.html

Please be aware that there are a LOT of family farms in the midwest that are worth 3-5 million dollars in land and without estate tax relief, those farms would be split up or sold. These people are not rich in terms of spendable cash, they need the land to produce the things we eat.

Also, you complain of the payroll tax cut, you must be aware that those monies are for social security system. The SS system is in bad enough financial condition to keep the lower funding rate going.

Which brings us to the overall problem Liberals don't want to address. We are spending more money than we are taking in as revenue. You can tax the rich all you want but the only thing you will get out of that is a new definition of the rich. You've heard it before but we do not have a revenue problem, we have a spending problem.

I for one would be fine with paying more in taxes to get our debt under control. However, both parties seem to think that more taxes mean more spending opportunities. So until I see some cutting, I don't want tax increases for anybody. Put yourself in the place of someone making $500,000 a year. Your taxes just went up and in the SAME bill that increased your taxes, you are helping subsidize NASCAR racetracks and Algae producers. To me, that is the root of the problem.

No matter how you slice it, we are spending our childrens money. Someone will eventually have to pay these bills. As far as the eye can see, we are going to run deficits. How do you plan to take care of this problem for the long term without some austerity.

Neither part gives a damn about the country--their only objective is to beat the other party and "win."

"The Republican Party Is the Problem"

Every instance of "Republican" in this petty screed could be replaced by "Democrat," and vice-versa, and it would read the same. Both parties are to blame, both parties are equally contemptible, both parties cater only to their respective nut-case "bases" and neither party gives a damn about the country as a whole.

I think both parties are equally to blame. The Democrats got their tax increase. Now they want to raise the debt ceiling, increase the deficit, implement Obamacare, and refuse to cut spending. None of these things bode well for the economy and their is seemingly no comprehensive plan to improve the economy forthcoming from Obama or any of the Democratic leadership. We are now going into our fifth year and the economy is stuck in a quagmire of perpetual stagnation. I think the average American has lost all hope of the economy ever improving and getting back to normal.

Such an arrogant column -- to assume that all of the ills of the system lie at the feet of the GOP with the Democrats being covered in innocence and purity is naive.

Let's keep it simple. WHAT'S YOUR PLAN MY LIBERAL FRIENDS?!?! Democrats just "won" the fiscal cliff battle that is expected to raise around $60 BILLION per YEAR. Spending under President Obama has consisted of overspending at least $1 TRILLION per YEAR money we don't have. By my calculations the Democrat's victory has thus managed to close the spending/revenue gap by 6% per year with the fiscal cliff deal. Clearly this gap is not going to be closed by tax increases alone. Paul Ryan proposed a plan that would have cut the deficit by all of 17%. Even Ryan admitted this was abysmal but said it was the very most he hoped he'd get Democrats to go along with. What'd he get for his trouble? A label of "radical and extreme" by a liberals that appear to want no link whatsoever between revenue and spending. Or do you? I actually do try to get both sides of the argument and so I read articles like this one in the (absolutely unsuccessful) attempt hear the liberal plan to stop flushing QUARTER-TRILLION DOLLARS EVERY YEAR down the toilet in just the INTEREST PAYMENTS on our $16.4 trillion debt. Think how we could spend that if politicians hadn't been doling out goodies all these years. So my liberal friends, here's your big chance. WHAT'S YOUR PLAN?!?! Wanna bet $1 trillion I won't get an answer? Not the Tea Party's plan, your plan. WHAT'S YOUR PLAN?!?!

Also please remember that this was not just a bill to raise some taxes, there was spending in this this bill. The CBO estimates the Bill would COST or put us in a deeper deficit of 4 trillion dollars over 10 years.

I agree with you.....Where's THE BEEF? Show us a plan. The Republicans plan was sketchy and not that great but it was at least something. What else should be expect, Obama spends 18 months burning political capital on a health care plan few want and totally ignores the economy. We expect leadership from someone like that?

I know what I say will be totally lost on the readers of this liberal porn mag. However, I will just give it one little try just for fun. First the problem is not republicans. The true problem is that democrats will not face the fact that we are out of options and there is no way we can continue to pay for our current welfare state. They are in a state of denial and all one hears is articles like the present one which tried to blame the republicans for resisting tax increases. They continue to think that all will be well with the welfare utopia, if only we can squeeze a little more juice from the "greedy rich". The lesson of this last fiscal cliff episode is that after much labor you got a little more money from the super rich but in general people are already paying about all that they can afford and the amount of new revenue to be had is paltry compared to our debts and deficits. If we try and squeeze more we will tank the whole economy and kill the goose that lays the golden eggs. In the mean time, our spending problem grows and we do nothing. Spending on medical programs and (to a lesser degree) social security has to stop growing or we are cooked. It would be wonderful if we could afford to actually pay people what we have promised them but we can't. If prior years we could have solved the problem by inflating our currency but unfortunately all these unfunded obligations are indexed to the cost of living so that is not possible unless we first end the indexing. That means we actually have to cut medicare and social security in real terms. To give some idea of the urgency of this problem, the CBO calculates that if noting is done, then the retirement of the boomers will mean that interest on the national debt plus medicare and social security, will together eat the entire tax income of the government by 2023 (i.. in ten short years from now). This means that unless we borrow enormous sums, nothing will be left for any other functions of government.,. No welfare, nor military, not medical research, nor education, ... nothing. Now this is an argument by "reductio ad absurdum" which should serve to demonstrates that something must happen and happen soon or we face social disaster. An yet the democrats are i n total denial! They refuse to talk about the problem. Anyone who says anything is accused of being greedy or of "obstruction" or a radical conservative. This kind of reaction has driven people to see the coming disaster into a state of absolute despair. Is it any wonder that conservatives are willing to force the government to default. Such a default would be child's play compared to what will happen to us otherwise. The reason they are willing to take dramatic steps to force the issue is because liberals need shock therapy. They need to wake up and stop the denial NOW before it is too late. We need Obama to explain to their people that medicare and social security need to be cut. Instead he acts like a petty demagogue and continues the playing his silly games.

This article demonstrates the intellectual and moral rot that besets the Democrats, liberals and leftists -- especially their unwillingness just to view what's happening without their red-colored lenses.

To do justice in a response would take more time and character space than respectively, I'm willing to commit and, I'm guessing, American Prospect would supply.

That said, This is what Pravda said, on Nov. 19, 2012, about those who voted for Obama and Obama himself:

"Recently, Obama has been re-elected for a 2nd term by an illiterate society and he is ready to continue his lies of less taxes while he raises them. . .

"He is a Communist without question promoting the Communist Manifesto without calling it so.

"How shrewd he is in America. His cult of personality mesmerizes those who cannot go beyond their ignorance. They will continue to follow him like those fools who still praise Lenin and Stalin in Russia.

"Obama's fools and Stalin's fools share the same drink of illusion."

The Republican Party is done. It was a party patterned after the Whig Party of England which has failed three times before in American government, as the Federalist Party, as the National Republican Party, and as the Whig Party. The Whig Party of England itself failed and was replaced in English two-party government by the Labor Party. The reason why the English Whig Party could not overcome the English Tory Party was because the English Tory Party was established on the divine right of kings, while the Whig Party was founded on economic and political principles. The reason why Republicans have failed is because the Democratic Party is founded on control of the judicial branch of government enabling Democrats to impose slavery on Americans for thirty more years after Whigs in England had abolished slavery in the British empire in 1834 by a vote of Parliament. Democrats made the Supreme Court more powerful with regard to legislation than Congress with the Supreme Court decision Marbury v. Madison in 1803, losing that supremacy only for a brief period of time during the Civil War when Lincoln re-asserted the power of the Presidency and Congress with the Emancipation Proclamation and the 13th Amendment. Today the Presidency has little power except the appointment of Supreme Court justices and federal judges, and Congress has almost no power except confirmation of the same.

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