The shove over the edge of the economic cliff has begun. The Senate just reached a ‘deal’.
Other provisions of the deal include an extension of unemployment benefits, without corresponding spending cuts elsewhere. The payroll tax relief that wage earners have enjoyed for two years was not extended and will expire, meaning that many working Americans will still feel a bigger dent in their first paychecks of 2013, while those out of work may experience a lower incentive to seek new job opportunities, as federal deficits rise.
Capital gains tax will rise from 15 to 20 percent; the inheritance tax will rise from 35 percent to 40 percent on amounts over $5 million…The total revenue increase in the deal amounts to $600 billion…..The federal government reached its $16.4 trillion borrowing limit yesterday, according to the Treasury, and resorted to “extraordinary” measures to continue funding the government.
According to the Congressional Budget Office, the last-minute fiscal cliff deal reached by congressional leaders and Obama cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts.
Republicans gave into tax hikes twice before, with disastrous results. In 1982, President Reagan was promised $3 in spending cuts for every $1 in tax hikes. The tax hikes went through, but the spending cuts did not materialize. President Reagan later said that signing onto this deal was the biggest mistake of his presidency. In 1990, President George H.W. Bush agreed to $2 in spending cuts for every $1 in tax hikes. The tax hikes went through, and we are still paying them today. Not a single penny of the promised spending cuts actually happened. The Pledge kept the focus 100% on spending in 2011 and 2012.
Even President George H.W. Bush said that the 1990 tax hike deal was a mistake when he was running for reelection in 1992: “I’m very disappointed with Congress. I thought this one compromise – and it was a compromise – would result in no more tax increases. I thought it would result in total control of domestic discretionary spending. And now we see Congress talking about raising taxes again. So I’m disappointed, and given all of that, yes, a mistake.”
The GOP keeps making the same fucking mistake; making compromises without getting anything substantial in return. This country is in serious trouble, and all they can do is acquiesce to the Dems’ tax increases, federal salary raises, and refusal to do anything about the gargantuan spending. $16+ trillion in debt is no joke. Future generations will be saddled with this insanity until gawd knows when.
The bill now heads to the House for a vote.
This will end badly. Just like all the other ‘deals’.