I haven’t been able to digest all the features of the fiscal cliff deal as yet. The White House has put out a fact sheet on what the deal contains. My initial reaction is disappointment that does not seem to go nearly as far in taxing the rich as I would have liked but also relief it did not hammer the poor and the safety net as much as I had feared.
Paul Krugman’s informed take on such matters is always worth considering, both on the practicalities and what it says about politics.
So, what are the two sides really fighting about? Surely the answer is, the future of the welfare state. Progressives want to maintain the achievements of the New Deal and the Great Society, and also implement and improve Obamacare so that we become a normal advanced country that guarantees essential health care to all its citizens. The right wants to roll the clock back to 1930, if not to the 19th century.
Krugman is pleased, as I am, that Social Security and Medicare benefits were not touched. While I would have liked to have seen taxes raised on incomes over $250,000, rather than the $450,000 agreed to in the present deal, that change does not reduce revenues by too much. But he notes once again the disturbing signs of president Obama’s willingness to capitulate too early and too often, promising trouble ahead in future staged crises.
So why the bad taste in progressives’ mouths? It has less to do with where Obama ended up than with how he got there. He kept drawing lines in the sand, then erasing them and retreating to a new position. And his evident desire to have a deal before hitting the essentially innocuous fiscal cliff bodes very badly for the confrontation looming in a few weeks over the debt ceiling.
If Obama stands his ground in that confrontation, this deal won’t look bad in retrospect. If he doesn’t, yesterday will be seen as the day he began throwing away his presidency and the hopes of everyone who supported him.
I found the whole process by which the deal was arrived at to be disturbing. On this issue the US government acted like bunch of high school slackers. They knew they had this deadline coming for a long time and yet they waited until the last minute, pulled an all-nighter, turned out a mediocre product, and then congratulated themselves for having worked hard.
This is not the way to run a country.