Senate Passes Fiscal Cliff Deal: The (Biden) Deal, Its Supporters and its Opponents

Rainer Hachfeld, Neues Deutschland, Germany

It almost looks like normal. The Senate got its deal and the dissenters (few) were three Democrats and five Republicans. An “overwhelming” approval is what the New York Times calls that. Just about anything the Republicans don’t filibuster is a flamin’ triumph! Maybe 2013 is a year of fear for the right?

The Senate, in a pre-dawn vote two hours after the deadline passed to avert automatic tax increases, overwhelmingly approved legislation Tuesday that would allow tax rates to rise only on affluent Americans while temporarily suspending sweeping, across-the-board spending cuts. ...NYT

It was Joe Biden’s success, one in which Mitch McConnell had a share. It probably strikes an awful lot of us as comical that the person we can thank for this may be Ashley Judd? And, of course, market-driven terror:

Quick passage before the markets reopen Wednesday would likely negate any economic damage from Tuesday’s breach of the so-called “fiscal cliff” and largely spare the nation’s economy from the one-two punch of large tax increases and across-the-board military and domestic spending cuts in the New Year. …NYT

The dissenters included Senator Harkin who thinks the President gave the Republicans more than he should have.

Next hurdle is, of course, the House.

The House Speaker, John A. Boehner, and the Republican House leadership said the House would “honor its commitment to consider the Senate agreement.” But, they added, “decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members – and the American people – have been able to review the legislation.”

Even with that cautious assessment, Republican House aides said a vote Tuesday is possible. ...NYT

In the meantime, Harry Reid managed to put the Republicans in a vise with respect to congressional pay raises.

To secure votes, Senator Harry Reid, the Senate Democratic leader, also told Democrats the legislation would cancel a pending congressional pay raise — putting opponents in the politically difficult position of supporting a raise — – and extend an expiring dairy policy that would have seen the price of milk double in some parts of the country. …NYT

Unemployment insurance continues. The 2% cut in payroll taxes does not. And the problems don’t go away. Agreements on spending cuts will have to come before mid-March.

It’s not over until it’s over.

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As NPR points out, those of us whose income doesn’t exceed $250,000 will not be affected by this deal, in terms of taxes. And, of course, government spending is not addressed. Yet. The Times’ editorial board is dismayed by much of the agreement and ends with this: “…A cleareyed look at the deal’s limitations shows how much Republicans have gotten for their intransigence.”

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As the Washington Post’s Chris Cillizza points out, it’s Joe Biden’s triumph. Long deserved. “Winners” begin with Biden. Then McConnell. And President Obama. “Losers” include John Boehner (of course), followed by Congress and … President Obama.

Obama’s handling of the fiscal cliff talks felt pitch perfect up until his Monday event with “middle class” citizens. The rally felt too much like a campaign rally — Obama was repeatedly cheered — and the president himself was in a joking mood that didn’t seem to fit the moment. Will it be overshadow the fact that he got a deal? No. But it was an off-key note from the country’s top communicator. ...WaPo

There seems to be some agreement in the media about Obama’s “rally.” It didn’t seem that way to me. Were the media sidelined? That could explain the sour grapes flavor of their complaint and Cillizza’s sour inclusion of Obama in his “loser” as well as his “winner” list.

Oh, and the final loser was/were the people of Washington’s in-group. Their New Year’s Eve was spoiled by the timing of the agreement. Aw gee.

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The Economist apparently updated its assessment of the deal early this morning and has this to say:

… While Republicans will try to use the sequester and debt-ceiling negotiations to secure the spending cuts that this week’s agreement omitted, Mr Obama signaled today he was equally determined that taxes have to rise further, too. “If Republicans think that I will finish the job of deficit reduction through spending cuts alone…they’ve got another thing coming,” he said in a brief public appearance Monday that riled Republicans with its partisan, combative tone. It may be that Mr Obama was mostly trying to reassure his own liberal base that it was the opposition, not him, who caved in this time. But it may also be a sign of the tone likely to prevail in coming months. …Economist

Of course, your friendly pedant here zeroes in on Mr Obama’s language. Got another “thing” coming? That’s “got another think coming.”

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Business and economics commentator John Cassidy is quietly disgusted with what appears to him as a weakened Obama.

As the details of the agreement leaked out on Monday, there was a rare consensus among liberal and centrist economic commentators that it was a pretty putrid one. Robert Reich, the former Labor Secretary, called it a “lousy deal.” Marc Goldwein, the policy director at the Committee for a Responsible Budget, favored an excremental adjective. Even Jared Bernstein, a liberal economist who until pretty recently worked for Vice-President Joe Biden, was skeptical. “But jeez,” he wrote on his blog. “This meets the R’s further on their side of the field than one might have expected given the White House’s leverage.”

Perhaps there is something about the deal that these folks are missing. I hope so. For now, coming just two months after Obama was reëlected with a handy majority of the popular vote, it all seems pretty depressing. ...New Yorker

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Over at American Conservative, Ron Dreher seems just as depressed by the deal as Obama supporters.

Cross-posted from Prairie Weather

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Author: PRAIRIE WEATHER

  • SteveinCH

    Not to join the chorus but this was a bad deal on policy grounds. The politics is not something I much care about but seems to be what a lot of people are talking about.

    http://uspoliticaleconomics.blogspot.com/2013/01/the-not-quite-worst-deal-imaginable.html

  • zephyr

    I agree with Robert Reich. It’s a lousy deal. What on earth does it take before democrats show some backbone??? Republicans in the House will be fools not to jump at this. Of course they ARE fools, so who knows how they will respond.

  • KP

    SteveinCH, that was a brilliant article you linked to. Full of objective observation and fact. Is that your article? Well done.

    My view, it’s going to get much uglier in the next two months. I am depressed by the deal and disgusted by congress. They waited 17 months for that?!

  • slamfu

    It would seem the GOP succeeded in holding their breath long enough to get pretty much what they wanted. Did anything happen to Cap Gains? Is that still the same? If so I think the GOP can consider this a huge win for their future talking points and big backers.

  • sheknows

    I agree, it is a lousy deal. Very dissappointed in Obama.
    Has everyone forgotten the 2011 Budget Control Act? Obama already agreed to a 1.5T reduction in spending cuts over the next 10 years! Boehner should remember this since he gloated how the “deal was all spending cuts”. Add interest to that and you have about 1.7T in cuts…almost 2T. That hardly stacks up against $600B in tax hikes for the wealthiest. Now he is about to give them MORE?
    I am disgusted too.

  • ordinarysparrow

    After listening to the streaming of the House fiscal cliff debates it does not sound like it will get through the House, or perhaps all the blustery opposition at this point is just so they will be on record for saying; but i said____________.

    Live Streaming of House
    http://www.cnn.com/video/?/video/cvplive/cvpstream1&hpt=hp_t1#/video/cvplive/cvpstream1

  • sheknows

    Whatever happened to ” I am the president” and ” they’ve got another think coming”? If he agrees to one more dime in cuts to entitlement programs, he will be hurting a majority of the very people who elected him.
    It will not be the middle class working families he has “saved”. It will be the lower class and seniors he has sacrificed.

  • ordinarysparrow

    What is, is and what is not, is not when it comes to the wrangling…But, i am thinking this year they will come together and pass Ground Hog Day as a National Holiday based on the movie.

  • sheknows

    LOL OS. The Reps will take the $400k income level. That’s a far cry from the 1.6T Obama promised in revenue… like less than half! Such a deal. AND they still get to take more cuts. Can’t beat it.

  • dduck

    It’s a deal. Is it perfect, no. Everybody lost something, so it will do for a little while. Stay tuned, more drama to follow, and follow and. ………………

  • SteveinCH

    Sheknows…

    The President never promised $1.6 trillion in revenue. He campaigned on raising the tax rates above $250K. That produces about $800 billion in revenue. He then said he wanted $1.6 trillion in the negotiation. That’s not a promise.

    Second, there are no cuts in this bill. In fact, ex-interest, it increases spending.

  • sheknows

    What bill…the Budget Control Act? The proposal called for was a 1.6T in revenue over 10 years from taxes on the wealthiest. ( WAPO…Fox News…a dozen other sources)
    THIS time around, the Reps are most definetely seeking spending cuts.

  • SteveinCH

    The bill passed by the Senate last night has no spending cuts…it increases spending ex-the interest savings from tax increases.

    The BCA never called for tax increases at all.

    The only time the $1.6 trillion was mentioned was as the President’s opening proposal in the negotiations over the fiscal cliff. He didn’t promise it. He didn’t run on it. It wasn’t in the BCA. It’s a number that was an opening offer in a negotiation, nothing more.

  • ordinarysparrow

    Just tweeping here..House will not pass this, as it is now… Cantor and Ryan are going to use this to bring a coup…once again following their motto: WWHKD…What Would Harri-Kari Do? Why would be expect them to change colors just because it is 1-1-2013

  • sheknows

    No, I know the one last night has no spending cuts. That comes later.
    And yes he opened his fiscal talks with the 1.6T in revenue, you are right, not a promise.( My exaggeration). However, it is still a far cry from the original proposal… which many who recognize the need for more revenue thought realistic. Like a trillion less.

  • sheknows

    Thanks OS for monitoring the fiscal fiasco. Well NOW what?

  • ordinarysparrow

    … the pork was too expensive so it was taken away… now they are playing chicken…Isn’t that what they want to do with the CPI adjustment?

  • sheknows

    Guess Ryan and Cantor won’t approve it until it contains spending cuts.
    (But they already GOT them, 2011 with the BCA)
    The farm bill was part of this package too. If they don’t get these guys to act rationally, we will all be paying $7 a gal for milk soon too.

  • Dr. J

    No, I know the one last night has no spending cuts. That comes later.

    Uh huh. You know, my friends told me I was gullible…and I believed them! :-(

    But after years of this fiscal soap opera, even I don’t see how anyone can believe spending cuts will come later.