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Subscribe to RSSPresident Obama praised lawmakers and Vice President Joe Biden after the House of Representatives voted to pass a Senate measure to avert the most serious impacts of the so-called "fiscal cliff."
The last-minute deal-making on Capitol Hill may have helped avert the fiscal cliff for now, but many commentators expressed pessimism over the agreement and the distressing sight of lawmakers allowing the world’s largest economy to teeter near economic disaster.
“This is a bad bill that made a bad situation worse,” Richard Haas, the president of the Council on Foreign Relations, said Wednesday on MSNBC’s Morning Joe.
“The only thing it did was avoiding sending the signal (to the rest of the world) that we’re reckless and out of control,” he added.
Consumers, businesses and financial markets have been rattled by the months of budget brinkmanship. The crisis ended when dozens of Republicans in the House of Representatives buckled and backed tax hikes approved by the Democratic-controlled Senate.
But even with the agreement, more budget drama is expected on the way. In February, Congress will have to decide what to do about a slew of other spending cuts. Then, in March, lawmakers will decide on whether to increase the federal borrowing limit.
“We could see an early lift in the markets because of relief the deal went through,” Gary Thayer, the chief macro strategist at Wells Fargo Advisors, told The New York Times. “The response may be muted because the deal left out many long-term issues.”
'A missed opportunity'
Erskine Bowles and Alan Simpson, who headed a deficit commission for Obama, said lawmakers missed a "magic moment to do something big" for the American economy.
“The deal approved today is truly a missed opportunity to do something big to reduce our long term fiscal problems, but it is a small step forward in our efforts to reduce the federal deficit,” they said in a joint statement released Tuesday.
PhotoBlog: Deal done, Obama heads back to Hawaii with a weary wink
In a scathing editorial, the Wall Street Journal called for the parties to go their own ways in Congress and tried to rally Republicans against Obama.
“Having been cornered into letting Democrats carry this special-interest slag heap through the House, Speaker John Boehner should from now on cease all backdoor negotiations and pursue regular legislative order. House Republicans should pursue their own agenda and let Mr. Obama and Senate Democrats pursue theirs. Mr. Obama has his tax triumph. Let it be his last,” it wrote on the editorial page.
Economists had been warning that the tax increases and spending cuts could take a chunk out of the U.S. economy.
PhotoBlog: Behind the scenes as Congress works overtime
But early Wednesday, world markets registered relief over the deal.
Benchmarks in Australia and Hong Kong boomeranged on the first trading day of the year. Asian markets had slipped on Monday, fearing that negotiations over the measure might collapse.
Many analysts were gloomy about long-term prospects.
“The process was so chaotic and the outcome so unsatisfactory that we are likely to see a further U.S. downgrade at some point,” Steven Englander, fixed-income strategist at Citi, wrote in a research note.
The House voted Monday to approve the Senate's fiscal cliff bill by a vote of 257-167. Richard Lui, Luke Russert and Mike Viqueira report on MSNBC.
But China's state news agency Xinhua took a more severe view, warning the United States must get to grips with a budget deficit that threatened not a "fiscal cliff" but a "fiscal abyss." Most of China's $3.3 trillion foreign exchange reserves are held in dollars.
Bipartisan outrage after House skips vote on $60 billion Sandy aid bill
For the Washington Post, the entire episode was depressing.
The newspaper expressed discouragement for what the episode suggests for political compromise going forward.
“The United States will have to wait longer yet for its inevitable budget reckoning,” it wrote in an editorial.
“We hope the nation’s leaders will be able to accomplish in stages what they have been unable to do in a series of self-imposed crises: raise more revenue and significantly reduce future entitlement spending. But the fiscal cliff episode offers little encouragement,” the newspaper concluded.
Reuters and The Associated Press contributed to this report.
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of course nobody is happy simply because nothing has been fixed. we still do not have any sort of real spending cuts, no true tax reform, and no reforms to entitlements. we are still on the highway to h3ll.
right. driving cars with lousy gas milage,way overpriced,using fossil fuel with idiots at the wheel. Whats on the radio? Oh good, rush limbaugh.
joe donahue
It's funny that you should mention that... In my state they are trying to raise the tax on Gas...
They said that due to the fact that cars are getting better mileage and people are driving less that the income from the sale of gas in the state has declined so now they must raise the tax to make up the difference.
What a Crock!
cars get less gas milage now then they did in 1980.
NO they don't Joe. they get better then cars in the 80's The Auto industry lied about almost every number they had. We had a ram in the 80's and it got 6 MPG we also had a small car that got 18MPG and that was a small 4 cyl. Now I drive a heaver car that is all wheel drive and get 26MPG and it is a 4 cly. please tell me how is that worse?
Nothing but a hoax. The rich came out on top like they have since 1776,and what was covered up and hardly discussed was Congress got a raise. Now they get to go behind closed doors slap each other on the back and talk about how the people of this country aint too bright.
They also had 517 days to work on this but the Republicans were so sure they would elect Romney that they did nothing. Obama also knew that debt reduction would occur during the debt ceiling talks. Obama caved in on the Bush Tax Cuts two years ago and apparently the Republicans planned on him caving in again.
joe donahue
The Pay Raise was obama's Idea and no one elses... He Signed and EO (something he is good at when he knows congress will say no).
where does it say the pay raise was Obamas idea? please send me the link.put up or shut up.
I'm totally frustrated. Our politicians just nudged the can down the road; if it was a kick the problem would have been pushed out more than 2 months.
What is worse, it was very clear that the president views more taxes rather than addressing over spending as the solution. In his remarks last night he was talking about closing loopholes next.
So the same battle plays out in Feb. Closing tax loopholes vs addressing spending - instead of both!
If we all did our jobs as badly as congress and 'O', we would all be FIRED. Hey there's an idea!!
OK, you're fired!
Remember when the tax the rich rhetoric started. Warren Buffet came out saying that he paid a lower tax rate than his secretary. He still dose. He earns his money through capital gains, taxed at 15% his secretary who according to Forbes earns between $200,000 and $500,000 may have gone up. So taxes went up on the wealthy but not the truly rich.
thats because the truly rich run this country,always have.
The capital gains tax was raised from 15% to 20%.
"The capital gains tax was raised from 15% to 20%."
Only for people making over 400 grand.
Sorry if I had the information wrong but that is still less then his sectary's tax rate.
Cowards! That's all we have in Washington to represent us is Cowards. When there is a surplus you can cut taxes. Actually, they should have adjusted the tax rates and then if they spend the surplus they would have to raise the rates. So, by not changing the tax rates to give us a tax holiday (because we are being over taxed) they leave them alone becuase when the surplus is gone so is the tax holiday. But, the cowards in Washington borrowed our future rather than do away with the tax holiday. Now we are buried in debt and yet they still continue the tax holiday for 99% of the population which is to be supported by taxing the 1% left over more. We all need to pay more in taxes, the government needs to cut spending and we need to get our debt under control.
If we are really serious of reclaiming our status as a world leader then we need to set an example and get our debt and wasteful government spending under control and eliminate our debt in 10 years or less.
No more tax breaks, no more tax holidays, no more borrowing, no more spending more then is collected, let's get out of this mess. Of course it means a leader must step forward with a brass set of hoo-ha's, not give a crap about getting re-elected and proposed legislation that tells it like it is. (fat chance such a person exists in nutless Washington)
And if I hear the Virginia Congress man complain one more time about the Federal Workers not getting a pay raise for 3 years and that it is so unfair that the budget is being balanced on their backs I am going to throw-up. If they don't like not having a pay raise then let them try and make it in the private sector. I lost 25% of my income in 2007 and have not had a raise since then. Yet, I am blessed to still have a job and I can pay my bills. If the feddies don't like their situation then quit! There are millions of unemployeed Americans who would love to have your pay check, your retirement and health care package aand your job security.
God help us in 60 days when this sad, guttless situation plays itself all over again. The only ones that feel entitled in this Country is the government. It feels entitled to our hard earned money with no ill feeling toward wasting it.
Just once I wish the government could feel the pain of not having enough money to pay the bills, with no where to turn. No more printing presses, no more loans and no more taxes. If you spent it all guess you need to shut down until next year or find a second job to earn some extra income to pay the bills. Oh, I forgot the government does not work, it does not produce anything of value, it just sponges off all it's parents until it drags them under too.
Well if few in Washington are satisfied ......That should be a good thing for the American people......But its not. They have just kicked the can again ....
First everyone complains there is no deal and then they complain because there is. Republicans did not get debt reduced that upsets them and Democrats had the taxes rate raised from $250,000 to $450,000 and made permanent that we do not like. Nothing should be made permanent, IMO. But for some reason, no matter what cuts are discussed, the Republicans "always" throw in Social Security when Social Security has nothing to do with our debt.
More needs to be done about Medicaid but it does not help that Bush signed a Bill for Part D prescriptions with NO MONEY to fund it and another Bill that prevents negotiations with drug companies for cheaper medications. That had to be very nice for the prescription lobbyists but not too special for the taxpayer.
But we also have defense spending, aid to people that hate us, huge subsidies to Big Oil and other programs with wasteful spending and cuts that could be made. This is not all about Social Security and Medicare that is the targeted issues always with Republicans.
Carol O MI
Get off the Blame Bush wagon... If it was so bad why did Congress Approve it... Don't forget Congress has Both Dem and Rep... and for anything to pass as law, has to be voted on by BOTH. All the president does is sign it into law...
Carol O MI
A short and sweet lesson about oil subsidies:
That’s just not true, and a failure to understand this is why there is so much outrage over fossil fuel subsidies in the U.S. (As an aside, characterizing the oil companies as “the 1%” is also misleading, because oil companies are overwhelmingly owned by the 99%). During the course of the LinkedIn discussion, a link was provided to Oil Change International, an organization devoted to pushing a transition away from fossil fuels. On their site they have a page on fossil fuel subsidies, which includes a link to a spreadsheet from the OECD breaking down various fossil fuel subsidies. The summary of oil-related subsidies for 2010 totals $4.5 billion. That is a number often thrown out there; $4 billion a year or so in support for those greedy oil companies.
But look at the breakdown. The single largest expenditure is just over $1 billion for the Strategic Petroleum Reserve, which is designed to protect the U.S. from oil shortages. The second largest category is just under $1 billion in tax exemptions for farm fuel. The justification for that tax exemption is that fuel taxes pay for roads, and the farm equipment that benefits from the tax exemption is technically not supposed to be using the roads. The third largest category? $570 million for the Low-Income Home Energy Assistance Program. (This program is classified as a petroleum subsidy because it artificially reduces the price of oil). Those three programs account for $2.5 billion a year in “oil subsidies.” So the next time you hear someone express outrage over oil company subsidies, you may want to ask them exactly which ones they are talking about.
First of all, Obama did not tell the whole truth in his statement about the bill when he said taxes will only go up for the top 2% of wage earners. The fact of the matter is that taxes will go up for everyone. The social security tax rate, which applies to every wage earner regardless of the tier he/she is in, will increase from the current 4.2% to 6.2%. So lower and middle income earners, be prepared for a smaller pay check in the future.
Second, this bill is only a band aid to the problem. No that's wrong, it really isn't a band aid at all. The problem with our government is its spending. Not the revenues. Until a serious decision is made on the government living within its means, this country will continue to head down into the sewer of financial distruction. Obama and the democrats got their way to increase the revenues. The microscope will now be placed directly on the democrats and Obama. How serious are they on cutting the spending?
Until a balanced budget amendment to the constitution is in place, I see no hope for our government ever being serious about cutting spending.
Proof positive that no one in Washington truly represents the American people. Obama took a lot of heat for saying that he was going to raise taxes on everyone who clears more than $250,000 (AFTER deductions!), and still the wimpy spineless Democrats could not get that pushed through. Now only those who make over FOUR HUNDRED THOUSAND DOLLARS AFTER EXTENSIVE WRITE-OFFS AND DEDUCTIONS will pay a penny more in taxes.
Way to go, wimpy Democrats. The so called FIscal Cliff would have been more equitable. Now the brandy-snifter, cigarette holder crowd can keep laughing their way to the bank while everyone else struggles to make their car payments. Nothing's changed.
Tom Tom, you mentioned only revenues in your post. What about spending cuts? There's the real problem. This bill will increase revenues only I believe $700 billion or so over 10 years. That won't even scratch the surface on balancing the budget! What this country really needs is a balanced budget amendment to the constitution. Only then will the senate and house members (democrat & republican) become serious about the financial problems of this country!
TomTom in Miami
Please explain to All of Us, WHat is it that you have agaisnt the Rich?
You think that they should cover all of your free-bees?
You won't get genuine bipartisanship and a sustained willingness to work together as long as two-thirds of a group, in this case the moderates and those labelled as liberals, are continually rebuffed in their efforts by a stubborn, unyielding, mulish, inflexible conservative minority. And if that conservative minority does follow the Wall Street Journal's editorial suggestions and continues to try to shove its conservative agenda down Congressional throats and the country's throats rather than work for a bipartisan working relationship then the next four years are going to be exactly like the last four years and even if that conservative minority somehow manages to con enough of the American voters into giving up and electing another conservative President the situation will still continue until there are enough majority votes from one party or another to force a working relationship. If you only exchange a moderate President, like Obama, for another conservative leaning Republican or one leaning on the conservative or Tea party backed thinking to get elected like Bush then gridlock will continue. The only way this country can get out of the gridlock is to abandon the extremist positions of conservatism and move back toward the kind of moderate views that allowed Reagan and Tip O'Neill to work together and that Congress to at least get some things done despite idealogical differences and the moderate attitudes that allowed Clinton to actually get our economy growing. Conservatism doesn't foster growth or anything but gridlock.
Derrick, you made me laugh so hard that my side is splitting. Obama, a moderate? I'm laughing again! What color glasses are you looking through?
Yeah Harry ....I don't think in the history of the world was there ever a moderate dictator ....
The republicans stayed true to their number one priority - defeating Obama for reelection. That's why they pulled the stunt they did in 2011 over the debt ceiling. I'm guessing that right about now they are wishing they had worried more about country than party and taken that deal.
"The republicans stayed true to their number one priority - defeating Obama for reelection"
POTUS has only the power of veto and the authority to call in a police action....very close to being only ceremonial....you cannot blame our president. This Beltway conduct comes close to the employment of our supreme commanders executive power.......send them all home without pay.....and poll the commonweal by telephone in the safety of their homes, by the Million; three nights a week. Every vote circumvents the special interest feeding frenzy that now typifies the Beltway,and this odor masquerading as Democracy is relegated to its rightful office of mere ceremony.....
Boehner, his boneheads, and the baggers got nothing--zilch, zif, nada.
Joe Biden picked up everything the Democrats wanted: raise taxes on the top 1% (they were after top 2%), make the middle class tax cuts permanent, extend unemployment insurance to the 2,000,000 long term out of work, trade off the payroll tax cut on FICA withholding for 2 more months of full throttle stimulus spending, and make the GOP conference in the house look like the bunch of drooling idiots that they really are.
Obama now owns the future negotiations. There is nothing Congress can do to cut/slash/reduce actual Federal spending because in 60 days the sequester becomes effective again. The House Republicans are not even close to having the votes to over-ride the President's veto on any part of an overall deal. They will have to negotiate individual, incremental spending bills on each and every department, agency, and program.
The 151 rightwingnutjobz decided to hold their breaths, stamp their feet, and scream instead of doing their jobs. In the deal, Pres. Obama gave up higher taxes on the incomes between $200k/$400k and $250k/$450k in order to get everything else he wanted. And it's very likely that the Democrats will get a new tax code in 2015 by picking up 15 seats in the House in November 2014. Har-de-har-har.
About the only good thing to come out of this is proof that there seems to be a few progressives and or liberals that have a modicum of fiscal intelligence.
Raising revenue pays for wars, really long wars, really expensive wars.
Education and vocational training cost a little now and benefit more later.
Compromise, look it up in the dictionary.
A pathetic performance to obtain a minimal, marginal, but important first step. So, now that the Grand Obstructionist Poopies are on the ropes with respect to their pledges to the traitorous fool Grover, hit 'em again, harder. The Tea Party's grip as a "terrorist" organization may finally be weakening.
This is what I would have suggested in this compromise but neither side really wants to control spending:
1) All new revenue must go to paying down the prinicipal on our debt and not for continued spending or replacing what is already being spent to then use this money to increase spending in another area;
2) The percentage of the federal budget already paying the interest and principal on the debt cannot be reduced and must adjust based on inflation;
3) People cannot get more back when they file taxes than they pay in taxes. Currently many people get more money than they put in back.
4) Do away with baseline budgeting and that the federal budget can only grow at the same rate the economy grows.
5) Pension reform for federal employees.
6) Implement a federal sales tax of 5% on goods and services. This will be fair because the rich who buy more will pay more and the poor who buy less will pay less. Also everyone needs to understand government costs and until everyone starts paying, many people don't care because they don't contribute to the federal government to the tune of about 47% of the people. It is true that you don't care until you start having to pay. This will help those who get federal assistance understand that it is not free and that then they might start wanting a more efficient and effective government. This won't happen though until it hits them also in the pocket book.
Just some thoughts of a rationale person I believe and I wish the Republicans would put these things on the table.
I forgot to add to number 6 that the federal sales tax can also only be used to pay down the principal on the debt and nothing else.
How about instead of trying to "fix" our completely dysfunctional, overly-complicated (and burdensome), regressive tax code, we just eliminate it? With that out of the way we have no more loopholes, no more amendments to support "pork", no more lobbying from special interests. In its place, we tax CONSUMPTION, not WAGES...spend more (rich) pay more; spend less (poor) pay less.
Then we don't have to worry about the 47% (or whatever today's statistic of the day is) who don't pay income taxes, because 100% will pay tax on the money they spend - EVEN CRIMINALS have to eat, buy clothes, cars, electronics, etc!! I remember reading something somewhere that a tax of this kind, to the tune of about 23%, will effectively REPLACE, dollar for dollar, the amount collected in personal and business income tax, payroll tax, inheritance/estate tax, gift tax, etc. and so forth.
Oh, that's right, it's called the FairTax. Maybe we the people should learn more about the options we have to make our government work for us, and then let our elected officials know what we want, not giving up until they get it through their heads!
That ass wipe toomey was just on Morning Joe threatening to shut down the govt. over the debt ceiling.
Hey, I'm happy! As long as my taxes don't go up, I could give a s**t about that other crap!
For now, eventually they will. It is inevitable at the rate we are spending. Think about this, what they get in new revenue only lasts about 8-10 days of the federal budget. They are just placating people like you until they then say they have no choice. We are headed in a Greece like direction. Do you know what a 50,000 dollar a year person is going to be paying in taxes in Greece about 50% under their current restructuring being proposed. Unfortunately, we are all idiots and only thinking about today and not tomorrow and that is why other countries will pass us buy because they think about 50 to 100 years in the future unlike our culture as it is all about today and me.
Sorry everyones taxes went up.They let the payroll tax cut expire.Its immediate and you will see it in the first paycheck you earn this year.
who knew-899304,
Hey, I'm retiring next year. I already knew my taxes would increase about 2% even if they avoided the "fiscal cliff" and it will only amount to a few hundred bucks for me, and for only one year at that.
When I retire my taxes will be zero - no family, no additional income, no nothin' - so screw it!
I'm so glad the 112th congress performed this final act of "kicking the can" in the same manner as everything else they have done so that there is not doubt in anyone's mind that the congressional leadership, the gridlock, and not only the partisanship, but the uncompromising devotion to an ideology, must go. The thing that astonishes me is that all of the wounds we have suffered through in the past 4 years, all of the deadlines, credit defaults, cliffs, and buzzer-beaters, are all self inflicted. Setting the house on fire and then saving your children, does not make you a hero.
This congress was useless but the great intelligent people voted to put the same idiots back in office along with odumbo. We deserve what we get because of all the give me people out there who just want someone else to give it to them with out their working for it.
Just shows again how splintered the Republican party really is. There was no way to get a "majority of the majority" when the majority dosen't even have the same principles.
Pathetic Republiclowns.. soon to be extinct. Thank God! Anyone who watched that sideshow in the House yesterday, could see the redundancy of their rhetoric. Each took the podium, and basically echoed the previous speaker. If this is "Parliamentary Procedure" we need to try something else. What a waste of time.
Time to get rid of Douche-bag Pelosi, Mighty Mitch McConnell, Boo Hoo Boehner, Cantor, Harry Reid, and about 100 other Senators and Congressmen, on both sides of the aisles. What a crew of losers.
God help the next Congress, if they act like this last one, we are all doomed.
Problem: Voters think it is everyone else's congressman is the problem and vote to retain their congressman. Me I voted against that sleazeball Buchannan but too many others voted him back in even with his breaking every election rule known to man. Living in his district I have seen what a real sleaze he is but for some reason all the old blue hairs think he is great. Ycck.
And sometimes, those who do "the right thing" and vote in the best interests of their constituants, rather than along party lines, you get thrown out. Look at Republican Senator Scott Brown of Massachusetts. He voted Bipartisan on almost every vote taken, and lost his seat to a true Liberal Party Loyalist Democrat, Elizabeth Warren. She wouldn't vote against the party doctrine, if her life depended on it. Jeeeeze.
Damned if you do, damed if you don't!
So, Shawn, with the extinction of the Republican party we have.....what exactly.....a single party system? Good for you Comrade.
People will get what they want and that will be the collapse of the U.S., we will become the next Greece if we continue to spend what we do not have, you can't keep taxing the "rich" because if they are businessmen they will just say to he!! with it and close their doors, they have enough money and leave. If this happens there will be millions more un-employed. Where does odumbo expect to keep getting the money he is giving away and waisting on stupid projects like Selinda. If he really wanted to help Legal Americans then he should build The "GREAT WALL OF AMERICA" along our border. Build it 30 feet deep and 30-40 feet high, 12 to 14 feet wide. This will put thousands upon thousands of LEGAL AMERICANS back to work overnight in many fields, steel, cement, sensors, masons, carpenters, electricians etc. It will then keep out the hords of ILLEGALS AND DRUGS FROM COMING INTO THE COUNTRY.
It would hurt relations with our dear friend Mexico!! Did you know how Mexico handles prison overcrowding?? The Mexican military escorts busloads of felons to the border and secures their crossing into America!! Now aint that special?
Immigration the Democrats can believe in!
Wow we raised taxes and increased the deficit.Damn,everyone should be proud of thier elected officials.