Excerpt
Just a few years ago, the tax deal pushed through Congress on Tuesday would have been a Republican fiscal fantasy, a sweeping bill that locks in virtually all of the Bush-era tax cuts, exempts almost all estates from taxation, and enshrines the former president’s credo that dividends and capital gains should be taxed equally and gently.
But times have changed, President George W. Bush is gone, and before the bill’s final passage late Tuesday, House Republican leaders struggled all day to quell a revolt among caucus members who threatened to blow up a hard-fought compromise that they could have easily framed as a victory. Many House Republicans seemed determined to put themselves in a position to be blamed for sending the nation’s economy into a potential tailspin under the weight of automatic tax increases and spending cuts.
The latest internal party struggle on Capitol Hill surprised even Senate Republicans, who had voted overwhelmingly for a deal largely hashed out by their leader, Mitch McConnell of Kentucky. The bill passed the Senate, 89 to 8, at 2 a.m. on Tuesday, with only 5 of the chamber’s 47 Republicans voting no.
Twenty-one hours later, the same measure was opposed by 151 of the 236 Republicans voting in the House. It was further proof that House Republicans are a new breed, less enamored of tax cuts per se than they are driven to shrink government through steep spending cuts. Protecting nearly 99 percent of the nation’s households from an income tax increase was not enough if taxes rose on some and government spending was untouched.
COMMENT: The Republican Party of the past is gone, they have essentially become the Tea Party. The party of no compromise and our-way-or-no-way. The party of non-governance.
"On the Left, Seeing Obama Giving Away Too Much, Again" by PETER BAKER, New York Times 1/1/2013
Excerpt
For President Obama, the fiscal deal passed by Congress on Tuesday finally ends four years of debate with Republicans about raising tax rates on the wealthy. But it seemed to reopen a debate within his party about the nature of his leadership and his skills as a negotiator.
While Mr. Obama got most of what he sought in the agreement, he found himself under withering criticism from some in his liberal base who accused him of caving in to Republicans by not taxing the rich more. Just as Speaker John A. Boehner has been under pressure from his right, Mr. Obama faces a virtual Tea Party of the left that sees his compromise as capitulation.
The main difference is that in the Obama era, the Democratic establishment has been less influenced, or intimidated, by the left than the Republican establishment has been by the right. Liberals have not mounted sustained primary challenges to take out wayward incumbents the way conservatives have. All but three Democrats voting in the Senate and 16 in the House supported the compromise on Tuesday, even as most House Republicans balked, giving Mr. Obama more room to operate than Mr. Boehner.
But the wave of grievance from liberal activists, labor leaders and economists suggested that the uneasy truce between Mr. Obama and his base that held through the campaign season had expired now that there was no longer a threat of a Mitt Romney victory. It also offered a harbinger of the president’s next four years.
"Even With Fiscal Agreement, Investors Facing Imminent Obstacles" by NATHANIEL POPPER, New York Times 1/1/2013
Excerpt
With the House of Representatives approval of a fiscal agreement late Tuesday, investors were expecting a rally in the markets to start the New Year. But the surge was not expected to last long, with investors and economists quickly shifting their focus to several hurdles the economy faces in the coming months.
“We could see an early lift in the markets because of relief the deal went through,” said Gary Thayer, the chief macro strategist at Wells Fargo Advisors. “The response may be muted because the deal left out many long-term issues.”
Market strategists were forecasting that even the deal approved by the Senate early Tuesday and by the House late Tuesday night would reduce economic growth by as much as 1 percent in the first quarter of 2013. Much of this would come from a rise in payroll taxes on incomes under $113,700 that would affect about 77 percent of American households.
Then there are the fiscal disagreements that Congress did not try to address in its negotiations this week. Spending cuts of $110 billion were delayed for two months, and politicians have not come up with a long-term solution that would allow the government to get past the borrowing limits reached at the end of the year — known as the debt ceiling.
“We keep stumbling from patchwork solution to patchwork solution, without getting us to the longer term solutions we need,” said Michael Gapen, the head of economic research for the United States at Barclays.
Technically, the country went over the so-called fiscal cliff on Tuesday, when markets were closed for the holiday. But the compromise reached later Tuesday should retroactively cancel the tax increases that began.
No comments:
Post a Comment