The budget deal reinforces GOP positioning on taxes

The Wall Street Journal points out that by retaining tax cuts for incomes up to $400,000, “Democrats aren’t just accepting, but embracing and extending, at least 98% of the 2001 Bush tax cuts.”

Throughout the run-up to the budget deal, I received emails from the White House emphasizing the reasons why the President would have to compromise, including this one:

Here’s the situation: If Congress doesn’t act, a typical middle-class family of four will pay about $2,000 more in income taxes starting on January 1. President Obama is asking folks to add their voice to the debate and tell us what that money means to their families. And across the country, hundreds of thousands of people are speaking up.

The President should have emphasized the dangers from cutting Social Security or Medicare, the injustice of the Bush tax cuts for the rich, and the outrageous defense budget. Instead, the President emphasized why he’d need to compromise.

John Burbank of Economic Opportunities Institute agrees that going over the so-called “cliff” would be a good things. Let’s Go Over That Fiscal Cliff!

The President had proposed cuts to Social Security, but — thankfully — the Democrats held firm on that issue.  But Obama may have more attacks in store. As reported in Counterpunch’s Fiscal Cliff Averted, Now the Attack on People Begins,

Economist Jack Rasmus highlights Obama’s comments after passage which signal what we can expect: “I am very open to compromise . . . Medicare is the biggest contribution to the deficit.” In fact, Medicare does not contribute to the deficit because it is funded by a separate tax, but Obama has signaled – expect cuts to Medicare and Medicaid. Obama has been laying the ground work to cut social insurances since 2010.

As Paul Krugman said, “Obama gave every indication of being more or less desperate to cut a deal before the year ended.”

After the budget deal was signed by the GOP House, the White House sent out an email with a link to The Seven Things You Need to Know About the Tax Deal, wherein it says, “Under this law, more than 98 percent of Americans and 97 percent of small businesses will not see their income taxes go up” — again reinforcing the GOP anti-tax message — and “Individuals making more than $250,000 will be asked to pay a little more to help reduce the deficit through a combination of increased tax rates and reduced tax benefits.” But, in fact, the deal makes permanent the Bush tax cuts for incomes up to $400,000.  On the other hand, the new rules do eliminate some deductions and exemptions for high-income earners, so its effects are hard to predict exactly.

But even the Huffington Post is reinforcing GOP talking points about the budget.  In How The Fiscal Cliff Will Leave You With Less Money Starting January 1, the Post lists the ways in which taxes will go up for (upper) middle class tax payers. “a household earning around $75,000 may pay as much as $3,700 more for their 2012 taxes.”   $75,000 may not seem like a lot of money, but to many Americans it’s a fortune.

From Progressives: Washington’s Fiscal Deal a Predictable, Terrible Mess:

Obama not only failed in his promise to raise taxes on the top 2 percent of taxpayers, he couldn’t even raise taxes on all of the richest 1 percent. Only those with individual incomes above $400,000 ($450,000 for couples) will face higher tax rates. The threshold for the top 1 percent starts at $369,691. The tax cuts for the richest Americans are permanent, while the child tax credit, college tax credit, and earned income tax credits that benefit Americans of more modest means expire once again in five year.

And from Paul Waldman, American Prospect:

Remember that there are two main things Republicans want: They want to keep taxes low on the wealthy, and they want to cut domestic spending. Obama’s leverage in the current negotiations came from the fact that if action wasn’t taken, all the Bush tax cuts would expire—i.e., there would be a large tax increase, including on the wealthy. Because Republicans really didn’t want that to happen, he could force them to accept some of his other priorities, like an extension of unemployment benefits.

But now the tax issue is settled. So when the debt ceiling comes up in a couple of months, there will be nothing Republicans will be afraid of. They’ll have no reason to give an inch. And they’ll be emboldened by the fact that every time we’ve had one of these crises, Obama has drawn a bunch of lines in the sand that he eventually backtracked right over.

Permanent tax breaks for incomes up to $450,000?  http://www.opednews.com/articles/Fiscal-Cliff-Scam-Congres-by-Ruth-Hull-130101-870.html

An Ugly, Ugly, Ugly Deal

In New Era for Progressives and Obama, Normon Solomon writes:

Democratic leadership makes cutting Social Security doable, puts a bull’s-eye on Medicare, protects the military from major cuts, takes a dive on climate change, reinforces perpetual war in sync with “kill lists” for routine drone attacks across continents, throws habeas corpus and other civil liberties under the bus and promotes far-reaching austerity measures.

With the threat of a President Romney gone and the continuing scarcity of a progressive moral core in the Oval Office, millions of progressives who understood the tactical wisdom of supporting Obama’s re-election should now recognize that the time has come to renounce his leadership.

That leadership has become so corrosive that the House Democratic leader, Nancy Pelosi, last month declared a cut in Social Security’s cost-of-living allowance would “strengthen” Social Security. This is typical of the doublespeak that continues to accompany a downward spiral — underscoring the great need for progressive insurgencies against what the Obama administration has become.

“A higher threshold is a good compromise.” — Rep. Steve Israel, DCCC Chair (gov’t pay $174K, earmarked $490K to fix his neighborhood’s traffic). Huh? With workers to receive 2% pay cut from expiring payroll tax break, there is nothing in the fiscal “deal” for REAL middle class . . . who do not make $450K, or $200K, but more like $50K. Only 10 million households nationwide have income above $150K, so how can even $200K be the “middle”?!   But there is a $78 million tax break in the “deal” for NASCAR (motor sport parks).

Williams again:

Thanks to Rep. Adam Smith, and Oregon’s Democratic House members, for voting against the fiscal “deal” that, among other things, eliminates Affordable Care Act funding for nonprofit health care options — while somehow giving $9 billion to GE and JP Morgan to offshore jobs, extending NASCAR’s tax loophole, and giving Goldman Sachs tax-exempt financing for its NYC HQ. The things we can afford and not afford.

The budget deal fails to address the greatest sources of budget deficits — the out-of-control military and security state, and the inefficient profit-based health care system.  As RootsAction sent out this email:

The “fiscal cliff” deal was not all bad. Social Security and Medicare weren’t cut. Unemployment benefits were extended. Taxes went up a tiny bit on some of the wealthiest.

But Pentagon spending remained outrageously high, giveaways to corporations were enormous, the President went back on his commitment to end tax cuts for more of the wealthiest, the deal raised taxes on people making $20-200K per year more than on those making $200-500K, and the debt ceiling limit remained — setting up a big push to cut Social Security and Medicare in the coming months.

No deal at all would have been better than this one. Had the “Bush” tax cuts expired, the good parts of this deal could have been passed next week.

We must now work to take the focus off the deficit and put it on jobs and smart public investment.That means moving the money away from war preparations

As Obama recently said of himself, “My policies are so mainstream that if I had set the same policies … back in the 1980s, I would be considered a moderate Republican.”