Tuesday, January 1, 2013

Middle Class - No Kids? Fiscal Deal was Not for You.

Middle Class?
No kids?

Middle Class?
No kids living at home?

Middle Class?
No kids going to school?
The fiscal cliff deal done in the middle of the night does nothing for you.
Absolutely nothing.

We weren't even considered in the process last night. 
We don't count, even though there are a lot of us in today's society.

Is the House going to pass it?
Frankly - I don't give a damn.
Republicans - Democrats - Independents - they are all the same to me today.  
   (Except - Democrats Thomas R. Carper (DE), Michael Bennet (CO), 
    and Tom Harkin (IA) who voted no)
First a snip from Krugman’s write-up this morning
It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.

If Obama stands his ground in that confrontation, this deal won’t look bad in retrospect. If he doesn’t, yesterday will be seen as the day he began throwing away his presidency and the hopes of everyone who supported him.
He has already thrown away the hope of this person who supported him - twice.  I'm tired of defending someone who says he will do one thing and then when elected does another.  I'm tired of listening to Dems defend him.  I have no hope left for this presidency from a progressive standpoint.  
From a progressive standpoint - we were stupid enough to believe he brought progressive beliefs to the table  - just even once in awhile - that if we voted for him,he would represent us - just even once in awhile.  No more.  We continue to get screwed  - not just once in awhile - all the time.
He negotiates at the extremes of the budget and society - and has made it perfectly clear he is willing to deal on Social Security and Medicare benefits (which by the way do NOT affect the deficit in anyway - they are only a bargaining chip - which he is willing to put on the table).
He has made it evidently clear that he is more concerned with bringing the Republicans to the table and being "their president too" - than standing up for the voters who put him in office - with an overwhelming win.

Then some snips from comment sections across the US
We had a good chance after 2008 to jerk this country back from the economic dystopian right wing lassiez faire policies of the last generation, and yet here we are negotiating from weakness even when we hold the better hand, and simultaneously lending unwarranted credibility to a failed economic philosophy that will eventually destroy us all.

We couldn't do what we needed to do, which was repeal all the Bush tax cuts and cut the military by the amount that it has been built up.

Republicans and their failed policies ran up most of the debt while decimating what made us a great country, and yet our policies continually move ever rightward regardless of who’s in charge.

    the worst thing about this deal is that the gifts to the wealthy are permanent, and the crumbs thrown to the poor and middle class will be gone in a few years at most. As far as I'm concerned, this is political malpractice. It's a crime that the crisis of unemployment is not being addressed, other than to sustain a minimal standard of living for the chronically jobless for a maximum of only one more year -- and for only relatively small group of people.

It is really no more complicated than simply reverse engineering that entire fiasco and making all Dick Cheney's disciples return the taxes they should have paid government.

This whole recent exercise was meaningless, a charade.

Then “The Deal” (from the front page of the Daily Kos)
Democrats Thomas R. Carper (DE), Michael Bennet (CO), and Tom Harkin (IA), who said the "White House had given away too much in the compromise," voted no.

The deal
does give away the leverage President Obama had on tax cuts,
doesn't resolve the looming debt ceiling fight,
and makes the Bush tax cuts permanent on incomes up to $400,000 for individuals, $450,000 for couples.

In return,
Obama got an extension of unemployment benefits and
five-year extensions of the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit.
Earned Income Tax Credit – only helps the “true middle class" if you have children
Child Tax Credit – only helps the “true middle class" if you have children
American Opportunity Tax Credit – only helps the “true middle class" if you have children
Here's a run-down of what else is there:
        The tax on capital gains and dividends will be permanently set at 20 percent for those with income above the $450,000/$400,000 threshold. It will remain at 15 percent for everyone else. (Clinton-era rates were 20 percent for capital gains and taxed dividends as ordinary income, with a top rate of 39.6 percent.)
This has no effect of the “true middle class”
        The estate tax will be set at 40 percent for those at the $450,000/$400,000 threshold, with a $5 million exemption. That threshold will be indexed to inflation, as a concession to Republicans and some Democrats in rural areas like Sen. Max Baucus (D-Mt.).
This has no effect of the “true middle class”
        The sequester will be delayed for two months. Half of the delay will be offset by discretionary cuts, split between defense and non-defense. The other half will be offset by revenue raised by the voluntary transfer of traditional IRAs to Roth IRAs, which would tax retirement savings when they’re moved over. [...]
This has no effect of the “true middle class” – in fact the Roth IRA transfer is a win for the wealthy
        The Alternative Minimum Tax will be permanently patched to avoid raising taxes on the middle-class. [...]
This has no effect of the “true middle class” – the AMT affects the poor
        Two limits on tax exemptions and deductions for higher-income Americans will be reimposed: Personal Exemption Phaseout (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000.
This has no effect of the “true middle class”
        The full package of temporary business tax breaks—benefiting everything from R&D and wind energy to race-car track owners—will be extended for another year.
This has no effect of the “true middle class”
        Scheduled cuts to doctors under Medicare would be avoided for a year through spending cuts that haven’t been specified.
This has no effect of the “true middle class”

What it doesn't do, and what will immediately hit millions of wage earners, is extend or replace the payroll tax cut with an equivalent tax break. That means that all wage earners will see an immediate hit in their paychecks, with a two percent payroll tax increase. That's a two percent tax hike on 98 percent of the nation, a larger increase by percentage of income than many in the top two percent will hit. A reinstatement of the Making Work Pay tax cut that was enacted for a year under the stimulus bill should have been included as a replacement for the payroll tax cut to avoid this hit on the middle class. It wasn't.
This does effect of the “true middle class”

So, in 60 days, when your read the defenses to the President's concessions on spending, acknowledge that they are valid, but remember that it was the President who decided to abandon the favorable bargaining ground to fight that battle on unfavorable ground. It was incredibly poor negotiating.

And to answer an anticipated question, what if the President had not budged until he had agreement on spending and the debt ceiling into, say, February, what then? Well, in the worst case, the deal he got today would certainly be available. In late February the Bush tax cuts would have expired. The discussion would have been entirely about how much to cut taxes, not about tax increases.

One final note, while there are virtues in the deal the President cut, most importantly the extension of UI, the President got no concessions on tax revenues. I've read some misinforrmed comments that the President got the Republicans to agree to tax increases that would not have occurred otherwise. This is simply false. There is not even one tax increase in the deal that would not have occurred or in most cases, been larger, without the deal.

When evaluating the deal, my view is that you have to consider what it, necessarily in my view, portends for the spending deal 60 days from now. Because it portends a very bad deal on spending, due to relinquishing the leverage of tax policy, I believe the President has negotiated a very bad deal on the fiscal cliff.

Another piece from a different diary on Daily Kos
If I wanted to live in a fantasy world where my leaders are never wrong I could go join the Tea Party tomorrow, so please don't tell me that I am not smart enough to fully appreciate the awesomeness of chess or checkers or chutes and ladders or whatever. This isn't a game. It is people's lives we are talking about, and this deal merely maintains the status quo for the majority of working class Americans without fighting for anything better for them while leaving their fates up for grabs in future hostage taking demands, and on top of that we will be giving the GOP and the wealthiest Americans who caused this economic disaster a bigger piece of the pie than they had before. If that's what you call a victory I would hate to see what enabling a nihilistic hostage taking GOP looks like.

I don’t know about you, but a 2% payroll tax increase for Main Street versus a $205 billion sweetheart deal for Wall Street and corporate America sure as hell doesn’t look like “shared sacrifice” to me! Frankly, it looks more like bipartisan business as usual.

Check the article out and see how Wall Street / Corporations benefited from this deal to the tune of $205 billion in corporate tax giveaways and related subsidies

In the Senate, where the vote for the measure was a lopsided 89-8, the one progressive "no" vote was that of Iowa Senator Tom Harkin, who echoed the view of grassroots groups such as the Progressive Change Campaign Committee, which argued that: "The president ran on and won on $250,000 twice. Voters across the country overwhelmingly agree with the $250,000 threshold (see here). And in real human costs, the billions lost by raising the threshold to $400,000 will come out of the pockets of grandparents and working families across the nation."

Harkin, an old-school populist who worked closely with former Minnesota Senator Paul Wellstone, outlined his opposition in a statement of principle. Issued at the time of the Senate vote, it read:The deal also makes tax benefits for high income earners permanent, while tax benefits designed to help those of modest means and the middle class are only extended for five years.  In essence, this agreement locks in a tax structure that is grossly unfair to middle class Americans, one which provides permanent tax assistance to wealthy Americans, and only temporary relief to everyone else.

Every dollar that wealthy taxpayers do not pay under this deal, we will eventually ask Americans of modest means to forgo in Social Security, Medicare, or Medicaid benefits.  It is shortsighted to look at these issues in isolation from one another, especially when Congressional Republicans have been crystal clear that they intend to seek spending cuts to programs like Social Security just two months from now, using the debt limit as leverage.

I am all for compromise, but a compromise that sets a new tax threshold for the wealthiest Americans while neglecting the very backbone of our country – the middle class – is a compromise I simply cannot support. This is the wrong direction for Iowa and our country, and at a time when our fragile economy cannot sustain further damage.

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