The House passed the fiscal cliff legislation Tuesday night. There certainly was no surprise there. For all the sturm und drang surrounding the vote, the only question was whether or not the House would actually take the vote, and that was not much of a question. There was no way that the House Republicans were going to refuse to vote once the bill passed the Senate by a large margin.
So what does it all mean? Let's be clear. My question is not what will the pundits or the spin-meisters say it means. No, my question is what does this ACTUALLY mean. The answer is quite simple:
1) Almost all of the Bush tax cuts have been made permanent. No one ever discusses this, but at the urging of Obama and the Democrats, the folks who file 99.4% of all the income tax returns in America just had the tax cuts established by George Bush in 2001 and 2003 made permanent. The no longer is an expiration date for these. To be clear, not only are the cuts for 99.4% of the filers permanent, but these folks also kept the benefit of about 90% of the total Bush tax cut. So, after all these years of hearing how the Bush tax cuts were only for the rich, we now see that essentially all of them really were for those who are not rich. But I digress. With the Bush tax cuts permanent, the Congress will no longer be hostage to the periodic drama of impending tax doom when the rates will revert to some higher level for the middle income folks who pay most taxes. Republicans can now opposed higher taxes without being threatened with taxes rising just as a result of inaction.
2) Spending cuts are now front and center. The fiscal cliff deal does nothing at all to cut spending. The House, however, will now be able to assert its will to cut spending. That will require leadership, but it should be able to be accomplished without too much effort. Sure, Obama and the Democrats will opposed the cuts, but that is not truly a problem. If the House just passes spending bills that are for less than the current spending amounts, the Senate will have to deal with them. If Reid and the Democrats refuse to do that, then the House can pass continuing resolutions, department by department, and cut authorized spending levels to those in the bills approved by the House. That will give the Senate and Obama a choice: they can shut down the government or they can reduce spending. Will Obama really shut the government down because the House only approved spending on the Commerce Department at the rate of 97% of 2012? I don't think so. Will Obama shut down the government because spending on the Department of Education is set at the same level as 2012? Again, I don't think so.
3) Entitlements will now not be capable of being controlled. There will be endless discussions about them, but there will be no lever to achieve a compromise. Oh, maybe some small change could be achieved by linking the control of entitlements to the debt ceiling increase, but that is unlikely. The truth is that control of entitlements would require some guts and leadership from Obama, so there is essentially no chance for it to happen during the next four years.
Personally, I am glad this is over.
So what does it all mean? Let's be clear. My question is not what will the pundits or the spin-meisters say it means. No, my question is what does this ACTUALLY mean. The answer is quite simple:
1) Almost all of the Bush tax cuts have been made permanent. No one ever discusses this, but at the urging of Obama and the Democrats, the folks who file 99.4% of all the income tax returns in America just had the tax cuts established by George Bush in 2001 and 2003 made permanent. The no longer is an expiration date for these. To be clear, not only are the cuts for 99.4% of the filers permanent, but these folks also kept the benefit of about 90% of the total Bush tax cut. So, after all these years of hearing how the Bush tax cuts were only for the rich, we now see that essentially all of them really were for those who are not rich. But I digress. With the Bush tax cuts permanent, the Congress will no longer be hostage to the periodic drama of impending tax doom when the rates will revert to some higher level for the middle income folks who pay most taxes. Republicans can now opposed higher taxes without being threatened with taxes rising just as a result of inaction.
2) Spending cuts are now front and center. The fiscal cliff deal does nothing at all to cut spending. The House, however, will now be able to assert its will to cut spending. That will require leadership, but it should be able to be accomplished without too much effort. Sure, Obama and the Democrats will opposed the cuts, but that is not truly a problem. If the House just passes spending bills that are for less than the current spending amounts, the Senate will have to deal with them. If Reid and the Democrats refuse to do that, then the House can pass continuing resolutions, department by department, and cut authorized spending levels to those in the bills approved by the House. That will give the Senate and Obama a choice: they can shut down the government or they can reduce spending. Will Obama really shut the government down because the House only approved spending on the Commerce Department at the rate of 97% of 2012? I don't think so. Will Obama shut down the government because spending on the Department of Education is set at the same level as 2012? Again, I don't think so.
3) Entitlements will now not be capable of being controlled. There will be endless discussions about them, but there will be no lever to achieve a compromise. Oh, maybe some small change could be achieved by linking the control of entitlements to the debt ceiling increase, but that is unlikely. The truth is that control of entitlements would require some guts and leadership from Obama, so there is essentially no chance for it to happen during the next four years.
Personally, I am glad this is over.
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