For all intents and purposes the fiscal cliff deal that was reached in the baby blue eyed hours of the new year accomplished close to nothing.
A paltry kick of the can at best, it serves as a stop gap measure to merely save American face for a touch longer.
A brief refresher as to why; way back in August of 2011 and as a condition to raising the debt ceiling, the sun-setting Bush tax cuts were tied to deep/indiscriminate budget cuts (read: sequestration) that, in tandem, was meant to be so onerous and austere it would force the government to come up with a solution by January of 2013.
In other words, the whole point of the government self imposing this ‘fiscal cliff’ was to scare itself into making a real, tangible and rational deficit reduction plan deal by now.
Well now it’s now and that didn’t happen. The deal was a deficit dud.
The President signed a bill which consisted almost exclusively of tax increases. A rate increase on the top 1-2% and an increase on the majority of others, 77% of Americans to be somewhat exact, in the form of letting the payroll tax holiday expire.
The Congressional Budget Office says this 10:1 tax increase to spending cut deal actually increases the deficit by $330 billion in fiscal year 2013.
It’s important to note that Republican intransigence was the main reason there were virtually no spending cuts in this bill as compared to previous incarnations.
Great. Wonderful. So what happened to the over $100 billion in budget cuts that were supposed to go into effect?
They didn’t happen. The date for those has just been moved to 2 months down the road.
Our fearless leaders in D.C. failed to turn in their assignment on its due date…so they just changed the due date.
How luxurious.
And to think, it only took the U.S. government just north of 500 days to reach such a brilliant compromise.
Naturally this all has been branded as some sort of huge victory for the President/Democrats and a catastrophic loss for Republicans.
In truth, it’s far more likely that any ‘victories’/’loses’ that were doled out will be incredibly short lived seeing as how this cliff was merely the first in a series of worse and bigger cliffs. If you were a fan of this nauseating debate, you are knee deep in so much luck my friend.
Since we already hit the debt limit on December 31st (happy new year!), the government has until late February/early March to raise the debt ceiling before defaulting.
This is far, far worse than the fiscal cliff.
Apparently any serious curtailing or reform of spending has now been relegated to the land of unicorns and pot o’ gold leprechauns (End Of Rainbow Gold Appropriation Act of 2013?).
On that note though, since Republicans caved on tax increases in regard to the fiscal cliff, they might have leverage in getting spending cuts out of the debt ceiling negotiations. That’s the thought tactically speaking at least. Whether it works or not remains to be seen.
Either way, that should prove to be an even more fun conversation than it was 2011 when it ultimately led to a credit downgrade.
Just after backing away from that cliff”s edge, we’ll hit the newly minted ‘sequester cliff’, i.e., all those cuts we just put off by two months with this genius fiscal cliff deal.
We’ll have to either; re-put-off the cuts, come up with a better deficit reduction proposal most can agree on or just let them happen.
Again, good times to be had by all.
And finally, since we can almost never pass a budget on time or in it’s entirety (1997 was the last time) we have to go through the process of passing another Continuing Resolution so the government doesn’t shutdown on March 27th.
Of course by ‘we’ I mean ‘the government’ since we, the people, have no say in the matter. We’re merely hostages of the circus.
2013. Is. Going. To. Be. So. Awesome.
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