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Tuesday, January 01, 2013

Cliffhanger!

Turd pies were served to the Republicans. President Barack Obama wins the battle. Closing out the 112th Congress, the lawmakers passed the fiscal cliff bill with pouting and bickering among leaders in the Republican Party.

The Republicans are fighting within their ranks. Congressman Eric Cantor (R-Virginia, Majority Leader) is coming out against the Senate proposal that starves off extreme tax hikes and spending cuts. He voted with a slight majority of Republican members against the fiscal cliff bill passed by the Senate.

The U.S. Senate passed a proposal that assures that the tax cuts for the middle class stay permanent and the rate of tax hikes go up for those making over $400,000. Spending cuts goes off the table for two months.

The House Republicans are once again jeopardizing their majority. The public supports higher taxes on the rich. The people voted for President Barack Obama to handle the economy. It's unfortunate that the Republicans played this all the way to the very end. Bitterly fought and now it's over!

The next controversy will be the debt ceiling. Another gridlock fight with new members of the 113th Congress.

It's just confirmed by the Associated Press that the House of Representatives passed the bill.

Republicans were upset the deal did not have cuts.

"We not only need to grow the economy but we also have to address the fundamental causes of our debts and deficits and that's out-of-control spending, obligations that we have not got the financial wherewithal the meet," said Congressman Dave Camp, (R-Michigan) the top Republicans on the tax-writing Ways and Means Committee.

"So this is a first step -- permanent tax policy that then sets the stage for comprehensive and fundamental tax reform and then addressing out- of-control spending. So this will be several steps. This an an important one."

Liberals were unhappy Democrats left out a number of their goals for the bill, and that they did not push for setting the upper limit for retaining the old tax rates at $250,000 -- a promise Obama campaigned and won on. Obama had hoped to raise $1.6 trillion in revenue over 10 years. The bill only raises $620 billion, suggesting to many Democrats that future deficit reduction could come from cutting cherished programs.

"We're going to look back on this night and regret it," said Congressman Jim Moran (D-Virginia).

Congressman Charlie Rangel (D-New York) said passing the legislation was as if, "someone stopped hitting you in the head with a hammer, and you're supposed to say 'Thanks so much!'"

Yet most Democrats were willing to back the measure.

"Yes, to all of those who say all the other things that don't happen in the bill -- I don't know any piece of legislation I've ever voted for that did everything that I thought it should do," House Minority Leader Nancy Pelosi (D-California) said. "While this bill doesn't accomplish all that we need to do … it is a good way for us to have a happy start to a new year by taking this first step."

Democrats also were pleased that for the first time in decades Republicans signed onto a measure that leaves taxes higher this year than the the year before.

"This legislation breaks the iron barrier that for far too long has prevented additional tax revenues from the very wealthiest," said Congressman Sander Levin (D-Michigan) "It raises $620 billion in revenue by achieving the president's goal of asking the wealthiest 2 percent of Americans to pay more while protecting 98 percent of families. That's right -- that's what it does. I want to emphasize this contrary to propaganda coming from the other side -- it prevents 98 percent of businesses from another tax increase."

Despite the general unhappiness with the measure, which President Barack Obama has said he'll sign, it does achieve some major policy changes, chief among them making permanent the Bush-era tax cuts for couples earning under $450,000 and individuals earning under $400,000.

The bill also keeps the estate tax threshold at $5 million, extends emergency federal unemployment benefits for one more year, and delays for two months the "sequester" that made up the spending cut portion of the cliff. It also extends the stimulus-boosted child tax credit and the college tuition credit for five years, individual and business tax breaks for two years, and the Medicare "doc fix" for one year, preventing a 27 percent payment cut for physicians. The Alternative Minimum Tax will be permanently fixed, and the the farm bill will be extended for one year.

Republicans in the House spent much of Tuesday threatening to blow up the bill over the the lack of spending cuts. They went so far as to propose amending the measure with a $328 billion package of budget reductions, but facing the likelihood that a revised measure would fail muster with Democrats, caved in after two lengthy meetings behind closed doors.

Having lost a battle that many of them fought for years, the GOP was looking forward to future chances to extract cuts, likely setting up more last-second showdowns in March. That's because the two-month delay of the sequester ends March 3, right around the time the nation is expected to reach its borrowing limit -- which Congress has to extend to pay the bills. Funding for the federal government also runs out on March 27.

The GOP sees each of those as leverage points.

"We still have more opportunities. We've got the debt ceiling coming, sequestration," said Congressman John Fleming (R-Louisiana) among the first in his party to acknowledge that with the Bush tax cuts having expired at midnight, there was little else the GOP could do beyond take the senate deal.

"So we're going to get taxes off the table," Fleming said. "The president can't say, 'We've go to raise taxes first before we get to spending cuts.' We will have already done that. Now the topic will be spending cuts, from this point out."

The disarray on the Republican side had many wondering if House Speaker John Boehner's job was in danger, but most members said it was not, and that Boehner ably managed the eruption of discontent in his ranks.

"I think he showed he's trying to listen to the conference in regards to giving everybody an equal shot at moving something forward," said Congressman Richard Nugent (R-Florida), who opposed the bill. "But you also have to be pragmatic about what's going to pass."

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