WASHINGTON — Congress at midnight Thursday approved an $801 billion package of tax cuts and $57 billion for extended unemployment insurance. The vote sealed the first major deal between President Obama and Congressional Republicans as Democrats put aside their objections and bowed to the realignment of power brought about by their crushing election losses.Read the rest here.
The bipartisan support for the tax deal also underscored the urgency felt by the administration and by lawmakers in both parties to prop up the still-struggling economy and to prevent an across-the-board tax increase that was set to occur if the rates enacted under President George W. Bush had expired, as scheduled, at the end of the month.
Administration officials said Mr. Obama would sign the package into law on Friday.
The final vote in the House was 277 to 148 after liberal Democrats failed in one last bid to change an estate-tax provision in the bill that they said was too generous to the wealthiest Americans and that the administration agreed to in a concession to Republicans. The amendment failed, 233 to 194.
Supporting the overall measure were 139 Democrats and 138 Republicans; opposed were 112 Democrats and 36 Republicans.
The bill extends for two years all of the Bush-era tax rates and provides a one-year payroll tax cut for most American workers, delivering what economists predict will be a needed lift. The Senate approved the package on Wednesday by 81 to 19.
The White House and Republicans hailed the deal as a rare bipartisan achievement and a prototype for future hard-bargained compromises in the new era of divided government.
But the accord also showed that policy-makers remain locked in an unsustainable cycle of cutting taxes and raising spending that has proven politically palatable in the short term but could threaten the nation’s fiscal stability in years ahead.
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Deficit spending during a recession and war is actually no problem. It's what's supposed to happen.
ReplyDeleteThe problem is that we have been deficit spending regardless of debt, regardless of bull or bear markets, regardless of war, and in an accelerating way, since either the 60s or 80s (depending on where one wants to begin the clock). On top of that is the fact that neither the electorate nor the major political parties seem to be willing to do anything about this deficit and debt spiral. That is, no one wants to increase revenue on anyone or anything or decrease spending on anyone or anything. The about face Republicans did from running against deficits to demanding tax cuts for the rich is but an example of how both parties (and their electorates) have addressed the deficit and debt, tax and spend problems the country faces.
We want to have our cake and eat it, too. We want a free lunch. We all want the other guy to pay for what we want for ourselves. At the same time, we've bowed down to the rich and powerful (and their corporations) and are looking more and more like an banana republic oligarchy. Financially, we are fiddling while Rome burns.
Deficit spending during a recession and war is actually no problem. It's what's supposed to happen.
ReplyDeleteSounds good on paper. The problem is getting future taxpayers to agree to pay debts they didn't incur.