The White House is right to declare victory after Congress sent it the fiscal cliff “compromise” bill.
In what initially began as a debate over how best to reduce the budget deficit, Republicans ultimately agreed to a bill that actually increases spending by $330billion and adds $4 trillion to the deficit over the next decade.
Trading $1 in spending cuts for every $41 in tax increases for a deal that doesn’t reduce the budget deficit isn’t a compromise – it’s a flogging; an absolute capitulation.
The fact that the deal is full of new unfunded stimulus measures adds insult to injury. The bill provides $30 billion for the eleventh extension of the “temporary” expansion of unemployment benefits from 2008 in addition to $134 billion to extend three “temporary” refundable tax credits from 2009 for five years. Those refundable tax credits mean that millions of Americans will continue to receive “refund” checks from the government despite paying no taxes.
So what did Republicans get in return for supporting the largest tax hike in half a century? A two-month delay on budget sequestration to debate unspecified spending cuts that may never occur.
Both Presidents Ronald Reagan and George H.W. Bush got caught in the liberal tax hikes in exchange for future spending cuts trap. Reagan was promised $3 in spending cuts for every $1 in tax hikes and Bush was promised $2 in cuts for every dollar in hikes. In both cases, the promised cuts never materialized in the Democrat-controlled congressional chambers.
Given the heavy-handedness of the Obama administration and congressional Democrats during the fiscal cliff debate, there’s absolutely no reason to assume this time around will be any different.
In sum, the bill (ludicrously named the American Taxpayer Relief Act of 2012) is a liberal triumph of symbolism over substance. Liberals get to keep their campaign promise to soak the rich as part of a “deficit reduction” measure that actually increases spending and piles on to the deficit.
Liberals believe they have an electoral mandate to raise taxes on wealthy Americans, and perhaps to some degree they are correct, but defeatist Republicans seem quick to forget that Americans have been exponentially louder in demanding spending cuts the past four years.
The Tea Party movement, which swept Democrats out of control in the House just two years ago, was almost entirely spawned by outrage over the federal government’s failure to rein in spending. Gallup polling conducted just before the November election confirmed that only a very tiny minority of Americans believe that the deficit should be reduced mostly or entirely through tax increases. It’s safe to assume the fiscal cliff bill’s approach, with its tax increases and spending increases, would poll even worse.
Of course, congressional Republicans have the most to lose in the short-term by accepting such a terrible deal. State filing deadlines for entering Republican primary races might just become a busy time for election officials this cycle.
