Liberals squandered a lot of their leverage on the fiscal cliff
If even under the conditions of the past month — with a very liberal president just re-elected, Republicans in disarray, public opinion on taxes seemingly friendlier to them than it has been in decades, and higher tax rates automatically taking effect — the Democrats can’t get more than a tiny pittance of revenue and no chips to use later, then their basic approach to fiscal issues just won’t work. The idea that they will raise rates again in the Obama years when they don’t have all these factors working in their favor is a fantasy. And the notion that the politics of taxes has decisively changed in their favor has been disproven by their own behavior: Many Democratic senators were as relieved as Republicans to see the threshold for higher rates rise well above $250,000, and would not have stood for it dropping below that level to where their upper middle class voters are. Having discovered an effective political wedge in the tax debate, the Democrats have now basically used it up and gotten awfully little in return. They can’t begin to acknowledge that the levels of spending they want to sustain will require a far greater tax burden on far more people (and in a far more regressive way) than today’s code, and if they can’t even state what they want out loud then they’re not likely to get it. Their bluff has been called. The welfare state they want to retain and expand cannot be funded, and they apparently have no way to do anything about that…
The fiscal trajectory of our welfare state is not sustainable, no matter how much taxes go up. That is the truth at the heart of our budget crisis. The fiscal-cliff debate ignored that truth from start to finish, and so has achieved nothing worthwhile for anyone. The Republicans know why they got nothing out of this: The expiration of the tax rates meant they could only contain their losses here. But what about the Democrats? Now they have gotten their tax increase, and what has it gained them but the prospect of an even slower economy? What’s their game plan?
Blowback
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No, Boehner will give them more leverage.
Oil Can on January 2, 2013 at 1:43 PM
The democrats could care less about how something is paid for. The tax increases were about optics, not revenue.
Rocks on January 2, 2013 at 1:44 PM
The Republicans gave up their trump card and got nothing in return.
Taxing the rich will always be popular. The liberals can go to that well forever even if it doesn’t begin to address our debt problems.
Just today 62% of Americans support across the board cuts. Right, as soon as they find out what that entails they’ll abandon it.
The Republicans control the House. That’s it. The Senate, the White House, the press, academia, Hollywood/TV our culture, are largely controlled by the left. And the public is incredibly ignorant about the budget.
That’s not a weak hand, that’s not even in the game.
SteveMG on January 2, 2013 at 1:49 PM
BTW, I think that the fact that 98% of the tax rates re now permanent with no expiry date probably justifies any deal the Republicans made. Allowing this to be up for a vote every few years was downright idiotic.
Rocks on January 2, 2013 at 1:52 PM
Bingo.
“squandered a lot of their leverage” Pfft. They’ll act like it never happened and the press will back them up.
And when the economy slows and the defecits increase? “We need more taxes!” will be the Dem reply.
WisRich on January 2, 2013 at 1:54 PM
I know we conservatives love to claim defeat at all times, but I think Yuval is right on this. The permanence of current tax rates for 98% of tax payers as well as the AMT is huge. It changes the playing field going forward. It used to be that any continuation of existing rates was a “tax cut” both rhetorically and in congressional scoring. Made it almost impossible to do any serious tax reform in the future. Now in order to pass Congress’s “revenue neutrality” bar, it can come in nearly $4 trillion lower than was the case a few days ago. That considerably increases the chances that tax reform, when it happens, can actually close loopholes while lowering rates. It doesn’t make it PROBABLE but it greatly increases the chances. And the left has lost a big pressure point now that they no longer have the pending expiration of existing rates to hold over conservatives’ heads.
Chuckles3 on January 2, 2013 at 1:54 PM
La la la
-lsm…. dems
cmsinaz on January 2, 2013 at 1:56 PM
They have an infinite amount of leverage and if by some freak of nature they loose any then the repubs will fall all over themselves to make up the loss.
Yup and the repubs refuse to fight or even look like they are willing to.
Dr. Frank Enstine on January 2, 2013 at 2:02 PM
That’s only because the GOP has beaten us over the head with defeat for so long that we see no other option.
Dr. Frank Enstine on January 2, 2013 at 2:05 PM
There game plan is to print money. Inflation is in effect a stealth tax on anybody with any savings.
Fenris on January 2, 2013 at 2:07 PM
Frankly, if the GOP is going to continue to do absolutely nothing to cut back spending, I’d rather see taxes go up. $1.6 trillion in deficit spending every year is a freaking time bomb with a very short fuse.
Clark1 on January 2, 2013 at 2:08 PM
they still can demand defense cuts
They “balance” will be 1:1 tax increases to defense cuts
thurman on January 2, 2013 at 2:09 PM
What makes you think raising taxes will have any effect at all on the deficit?
Fenris on January 2, 2013 at 2:14 PM
Levin gets it. This is a decent win for the GOP, but a huge loss for the left. I’ll take that.
Mr. Arkadin on January 2, 2013 at 2:24 PM
American politics will now take an immediate conservative turn to sanity.
Heh.
DarkCurrent on January 2, 2013 at 2:29 PM
This is ridiculous.
The Dems print leverage, like the Federal Reserve prints money. The only difference is in the presses they use.
Dusty on January 2, 2013 at 2:30 PM
Behold yon Obama:
Why, man, he doth bestride the narrow world
Like a Colossus, and we petty men
Walk under his huge legs and peep about
To find ourselves dishonorable graves.
Julius Caesar
Act 1, Scene 2
claudius on January 2, 2013 at 3:07 PM
I’ve been saying this in threads all day. YOU WON. Quit your complaining.
libfreeordie on January 2, 2013 at 3:19 PM
Exactly right. No, nothing in legislation can truly be described as “permanent,” but allowing the rates to expire every so often just created that many opportunities to hold the Republicans over the barrel and force them to accept bad deals.
The bill is bad in a lot of ways, but making the tax cuts permanent and adding a permanent fix to the Alternative Minimum Tax for the first time ever probably makes this overall a very good bill. We’re still kicking the can down the road on spending, the “doc fix,” and sequestration, but at least something was accomplished. Which is honestly much better than I expected.
tom on January 2, 2013 at 4:20 PM
FTFY, libtard.
MelonCollie on January 2, 2013 at 8:01 PM