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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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Capital gain rates rose 33% and the Rep. House got no spending cuts for the tax increases they gave Obama.
Big win for Big Government; big loss for the producers that are still left in this country who pay all the bills. Sad day for the America who once led the World.
How about both the Republicans and the Democrats pursue the agenda of the American people, something they swore to do when they took office. There will always be disagreement as to how to serve the US but this 'My Way or the Highway' attitude (agenda) taken by both sides has to stop if any progress is to be made, this deal doesn't address spending - just kicks it down the road a few months - making it the next congress's problem. The drama created by the 'last minute' dancing done by congress looks impressive on the surface but the congress had 16 months to address the fiscal cliff problem and did nothing until the last day - actually after the last day - and even then their deal doesn't address the real issues, the shine comes off rapidly.
The President anncounced that taxes are not going up on the Middle Class... His definition of middle class must be people who dont work.. Everyone that works their taxes are going up by 2% as the payroll tax was increased on Jan 1st... Maybe people will finally realize that the Presidents main objective is to increase taxes on anyone who works for a living and give the money to those who do not work
Ed...
Of course, that's the administration's goal. Sheesh...
You'd have to have been in a coma not to recognize how hard he's fought not to that...
Ed
President Obama's fight for the middle class and mission to "grow the middle class out" is alive and well. As the media pointed out, the Payroll Tax Holiday was a huge victory for the middle class. Yesterday is was small news; workers will see a slightly smaller paycheck. President Obama would tell you that the cut was temporary; disregarding that tax reform could have lowered the burder by increasing those bearing the load.
And apparently the numbers of the middle class has increased, "grown out" to include those making just more than twice our Congressional leaders.
The American Economy just avoided the cliff and fell into the abyss along with our freedom and what is left of our morality and justice. Enjoy your chains.
BobW...
Please provide us with the list of freedoms we've lost under this administraton.
Thanks...
Well, I would start with a serious assualt against our 2nd Amendment Rights. That fight should start brewing any day now.
The definition of compromise is that point at which everyone is equally unhappy. But this isn't compromise, it's just another failure of our Congress to do their jobs of representing the interests of the people.
They're not satisfied? Ahhh...my heart just pumps purple piss for them. Poor rich man's ass licking GOP shills. Not so much fun when they actually have to DO THEIR F$%&ING JOBS whether they want to or not. How terrible it must be tor them to have to actually SERVE the interests of their constituents, rather than just selling them down the river the obscenely wealthy plutocrats they are actually employed by.
Do you know what difference this little bit of actual legislating means to me? Absoeffinglutely NOTHING. I still intend to push for the removal of every F$%&ing obstructionist shill in congress in 2014, be they Republican OR Democrat. These jerkoffs are TRAITORS to the American people, and I for one intend to see EACH...AND,,,EVERY...ONE OF THEM removed from office.
And that tool Boner, and Eric @!$%#or, are FIRST on my list (Can't do Eddie Munster until 2016).
James Griffin-302437-330428
How many States do you live & vote in?
You know...we have this newfangled invention there Nugent, allows me to reach ALL 50 states...it's called the INTERNET.
"and the Rep. House got no spending cuts"
As I said --- Bohener is the worst speaker of the worst House of Representatives in the history of this nation. I almost feel sorry for Mr. Tan Man. He doesn't know if he should wipe his watch or wind his butt. But -- he invited the crazies (tea bag) into his tent in 2012 and now he's has to deal with them.
The few that pay most of the bills got a big tax just to take care of a bunch of free loaders and munchers. Where are the spending cuts. Dems looks like you own this one
This is just a rerun from months back. I say fire every last one of these losers.
Can you just picture what MAD Magazine will do with "Behind the Scenes, Congress works overtime? What, me worry?
More trillion dollar deficits, with plenty for blacks on food stamps, benefits for illegals and raises for government employees.
This country is so broken.....
keith-834246
Food stamps are not epidermally based. The passed bill nixed government raises.
But indeed, the country is broke.
MJ,
Blacks represent a disproportionate amount of those on food stamps. Federal employees are currently making more than twice the rate of those in the private sector.
Try to see things as they are...
To all working Americans, when you look at your paycheck in the coming months and see that more taxes are being deducted and the cost of your health care has gone up, just remember you can thank Mr. Obama for that, yes you can.
Everyone's payroll taxes will increase since the GOP refused to continue to the Payroll tax reduction that was passed in 2010 to help the economy. Economists predict that it will have a negative impact of 1/2 to 1 percent on the GDP. Great, we will have less to spend so the economy will suffer.
sie,
Those 40% deficits and trillions added to the national debt every year haven't started to register with you yet have they?
SIESTASIS
The Democrats gaveth & the Democrats tooketh away. The Payroll Tax Holiday was intended to a temporary stimulus.
I was really disappointed that tax reform wasn't embraced. President Obama and the Republicans both spoke for expanding the burden of the tax load upon more, while decreasing the share for many.
SIESTASIS,
You just wrote in this same story how you paid in SS for 50 years and you deserve that money. Since Congress spent all the money you put in over the years, how do you expect to be paid if the government continues to discount new contributions to the system?
I don't like the payroll tax increase more than anyone, but people need to open their eyes and figure out how much the government really takes from them to provide these programs (even while the employees have had a tax holiday of 4.2% the employer has still had to make a 6.2% match, and that doesn't include Medicare, 1.45% additional that both the employer and employee pay), and decide whether if given back that part of their pay, they could do better to provide for their own retirement. People like you demand that you get your money back because you paid in, heck, for what they have taken from you over the years you should be demanding a lot MORE than you paid in, but the reality is that won't happen because Congress spent it all, on both sides of the asile! So now you need today's incoming workforce to bail our your retirement, and that sure as heck isn't going to happen with discounted contributions. I hope you enjoy your retirement check out of my paycheck, and I hope by the time I retire I don't have to ask my children and grandchildren to pay for mine!
The Republicans missed a big opportunity to propose a fair flat
rate tax. Rates $0-20K 0%, money above $20K 30%; couples freely
share; all income bundled and taxed together, no exemptions. The
effective taxation is less for the under $250K income. To provide
business relief with no business taxation: provide a means for the
'partnership and disregarded' businesses to transfer funds into
personal accounts as taxable income. Ends family business inheritance
taxation, except when sold for increased value.
Furtherance of
this approach using additional $200K 60% flat-rate surtax for paying down
the debt, and/or unification of State and Municipality revenues and
debt payback. Thus the governments efficiency reaches single payer
synergism. Resolvable over the next congressional term.
Clamor over the compromise highlights its fiscal irresponsibility. Next up, Congress and the President face a government shutdown when the Continuing Resolution expires on 3/27/13. Stay tuned for more irresponsible brinksmanship followed by hubris. Congress and the President should lead: set a budget, then appropriate FY14 funds by 10/1/13!
J1Scott
No budget in 3 1/2 years & probably none for the next four years. Reid & Obama are required by law to have a budget every year but they are above the law.
This "Great Divide" among the the (rich?.. anyone over 1 million?) The middle class anyone making 75k to 1 million and the poor who make 75k down to government hand outs is " Is an imaginary enemy created by Obama for class warfare. If you took all the money of the rich and all their holdings and distributed among the poor, this country would cease to be in less then 30 days. Without anyone with any money to work for your little bit of money will be spent in no time. You must live off the land or die. No strong and agressive country is going to hold back as a county withers and dies... they will just take it! The simple fact is you (most of you) cannot survive on your own without a parent, job or the government paying your bills. your very survival depends on them having enough to pass down to you. If you demand more then they can give you then you must go get it on your own. There will always be the poor and the under paid. The same as there will always be those who are lazy and prefer to steal rather then work.
Nobody created these classes. It is the will of the human that they depend on their security by agreeing to work or accept something from someone. Without the agreement to work you have to do it on your own. When you start owing what you can't pay your class status falls. Are we ready to once again become a 3rd world country?
keri,
too deep for most. still true, unfortunately nothing has appeared which might change the current destructive path this country has set itself upon. As you mention the country is very divided, Those paying no taxes, relying on or working for government are the majority now. Until such time as the country finally defaults on its entitlement binge things cannot get better...
This country is sooooo broken.....
Keith-834246 and Keri,
Fairness requires top earners pay more
Citizens need to know the truth about government budgets — national, state and municipal. The federal budget is $2.3 trillion, the expenditure is $3.8 trillion. Federal plus state plus municipality is $8.06 trillion. The sum total of all personal income is $12.98 trillion. Thus, the governments are operating at 62 percent of total personal income.
The transaction (sales) tax rate has hidden components, business taxes are hidden as production costs. Industry must do this to balance their budgets or go broke. With a centralized banking system, the federal government can print more money than collected in revenue; states and municipalities cannot. Taxation at state and municipal levels is less progressive than federal, which burdens the lowest income levels with the highest effective rate; and the upper 2 percent with the lowest effective rate. Thus, municipalities borrow more in a recession, as the lower
quintiles' wages are more diminished. We have cities falling into bankruptcy. The solution is national income taxation, and fairness requires top quintile to pay more taxes, using a progressive tax rate.
And here in is a mathematical solution. Incomes less than $20,000 are not taxed, surtax is used for $20,000 through $200,000 at 35 percent, and surtax is used for above $200,000 at 90 percent. Couples freely share incomes. All other forms of taxation are not allowed, including business taxes. With this taxation method, the citizen tax rate is less than the 2011 federal income tax for incomes less than $250,000. This, with the bonus of no state and municipality taxation.
Oh, but the gentile aristocracy objects. After all, they have invested millions in lobbying to reduce the 1960 91.5 percent at $400,000 to the present 15 percent at infinity, while all lower incomes' top rate is 35 percent.
And Grover Norquist, neither elected nor popular, has effectively filibustered corrective revenue measures. To the founders of the Constitution, he is the sum of all fears. The time for corrective action for the aristocratic theft has arrived. Fairness requires the top quintile pay more taxes.
Cut, cut, cut...every program, every department, every entitlement except Social Security and Medicare for those who paid in all their lives. Get everyone out of Social Security that has not paid in all their lives. Finally, cut the pay of congress by 50%. If they still get nothing done, cut it the other 50%. We should make their pay based on performance. Please write your senators and congressperson to make that happen. :)
I cringe when politicians on either side of the aisle use the word permanent. Things are only "permanent" until a later Congress decides to change things. How permanent to you think an estate tax exemption of an escalated $5MM is going to be when the greedy hand of Washington DC realizes it needs more money to pay for its habit--spending. Legions of people with no net worth will vote for a president campaigning on a platform of making the rich pay their "fair share" above and beyond the already high marginal rates. And some future gang of thieves down there will cut the exemption back to, say, $3MM. I can see any of number of liberal/progressive types arguing it's unfair for people to die with more than $3MM and pay no tax. So spend it while you are alive, gang, because you are never safe from the greedy hand. You all need to go out and reed Amity Schlaes' book of about 10 years ago called The Greedy Hand.
This is almost exactly the deal that the President proposed as a compromise weeks ago thjat the GOP said was "outrageous". What a bunch of losers.
willie,
When you talk about losers in washington, you'll need to be way more specific. You did mean all of them didn't you?
J. Willard...
Not to mention the Speaker rejecting the deal giving them even more than they got on this swing and more than they'll likely end up with.
And all of this just because they do not want this President to succeeed. They not only shot themselves in the foot, they emptied the magazine.
They basically voted on how much more money the Fed was going to print. What a joke they accomplished nothing just kept kicking the can as usual.
If congress has no interest in budgeting their spending then W T F is the point in raising taxes on .6% of people just to generate a measly 60 billion a year?
That's LESS then what they want to spend on FEMA alone!
Talk about ice skating up hill, I've seen special Olympic athletes with more common sense then all of congress and 53% of typical voters
"a measly 60 billion a year" That attitude is exactly what got us into this mess. Every billion dollar counts.
Ah Crap so this is what it looked like on the bridge of the Titanic..
Want to know what I find more and more ironic by the day about Democrats on this board? Apart from their "tax the rich" mantra, their two biggest repeated goals are that the government needs to create more jobs, and encourage American manufactuering, and their greatest hate is directed toward the Defense Department. Why that is ironic is the vast majority of money spent by the defense department is to provide for the pay of our service members, and other things Democrats claim they want people to have such as free college education, and then on military hardware, the vast majority of which is designed and built by American countries, providing American manufacturing jobs, and the profits go to American shareholders and business owners. But the money is being spent on "being the world's police" in their words, so it is evil.
But if the Democratic party were to propose cutting spending from defense to spend it "creating" jobs, I don't know, planting trees or something, they would be just thrilled, even though at the end of the day that money is employing people and creating American manufacturing jobs.
Edit
That was supposed to say "designed and built by American companies,..."
This solves our problems like duct tape would have saved the Titanic.
The tax code needs a complete overhaul to make it a fair and simple revenue system, not a quasi-welfare/economic stimulus program.
Government spending needs to be reined in, but over time, as an immediate chop would send us back into deep recession. They should have thought of this years ago, like maybe when we got into multiple wars.
timmy, et al...
This deal was not designed to solve the spending or deficit problem.
For those not paying attention, the deal was meant to put off sequestration, avoiding damage to the economy by reducing middle class and lower class spending power with the provisions to address what needs to be done later.
I understand. I just don't understand the celebration of some people, nor do I have any hopes that the real problems will be addressed within in the next 2 months so we'll be up against yet another deadline, creating anxiety for the markets/economy.
Woke up this morning and found that the fiscal cliff is gone...........OK ......now I can up my hours from 70 hrs a week to 75 hrs. 4 more years and I can go on soc sec......I am going to attempt to go for the gueiness record for the longest person on record to receive soc sec.......OH YEA...joining the AARP which will rival the gun lobby shortly.......yeeeeeeeeeeeeeeeeeeeeee haaaaaaaaaaaaaaaaaaaaaaa suckers!