Part 1 of the Fiscal Cliff Is Over. Now Gird Yourself for Part 2.
Two more good things about this:
the Hastert rule (a.k.a. majority of the majority rule) was tossed aside by the GOP to pass the bill, I think that’s a first for the 112th tea party congress & Wikipedia has already been updated.
The Obama middle class tax cuts and top earner tax increases are permanent, unlike the previous temporary Bush tax relief.
Republicans split the difference on dividend taxation, raising it to 20 percent too, rather than the 39.6 percent Obama wanted. The working class got an extension of the stimulus tax cuts, but lost out on an extension of the payroll tax holiday. The deal also includes a bunch of other miscellaneous provisions (Suzy Khimm has the details here), and the end result is a revenue increase of about $600 billion over ten years.
In bonus news, the milk cliff was also averted. At the last minute, the Senate added a nine-month extension of the current farm bill to the legislation. This means we won’t be reverting to the 1949 law, which would have doubled milk prices across the country. Lactophiles can now breathe as easily as millionaires in hospices.
But it’s not over til it’s over, and the fiscal cliff is far from over. First, the House still has to vote on the deal. They’ll probably approve it, though. [Late night update: They did.] More importantly, negotiators punted over the debt ceiling and the sequestration cuts. That’s the $1.2 trillion in automatic spending cuts that emerged from the 2011 debt deiling debacle, split evenly between domestic programs and defense programs. Congress now has two months to hammer out a deal on that front, and Obama held a press conference yesterday warning Republicans that he wouldn’t accept a deal that was all spending cuts and no revenue increases. If this sounds like the exact same thing they’ve been fighting over for the past year, give yourself an A.