Blog

Lucky 113th?

fortune.jpgThe 112th Congress, otherwise known as the least popular Congress in history, gaveled out for the final time last night. Before finishing up, they narrowly managed to solve a problem they themselves created by passing the tax package without any spending cuts, yet were apparently too exhausted from actually working to pass a measure aimed at getting more federal money to the super storm Sandy victims.

Perhaps this is as it should be. Not because I don’t think Sandy victims don’t need the help (they really do), but because it perfectly illustrates how utterly dysfunctional this Congress has become. I’m really hoping for a change in the 113th, and with a relatively healthy turnover, it’s at least nice to think we will see some movement on otherwise intractable issues.

Unfortunately, the major issues facing the incoming Congress next year will be almost an exact replay of the issues facing Congress in 2011, specifically spending cuts and raising the debt ceiling, which lead to months of gridlock, which caused the fiscal cliff scenario we just experienced. As Yogi Berra is fond of saying, it’s déjà vu, all over again.

So, what did they actually pass last night? You mean you weren’t following developments minute by minute, with C-SPAN on one screen and Twitter on the other? Fine – here’s a breakdown, in a simple “Pro-Con” format :

Pros:  It lets the Bush tax cuts expire on the wealthy, raises the estate tax marginally and increases taxes on capital gains and dividends a bit.  Unemployment benefits are extended for a year.  Tax boosts for the low paid workers – the child tax credit, expanded earned income credit, refundable tuition tax credits – are extended, if only for five years.  Social Security, Medicare and Medicaid are not touched.

Cons: The deal makes no provision for lifting the debt ceiling.  It postpones the sequester (automatic cuts in domestic and military spending) for only two months.  It is a smaller deficit reduction package than that originally sought by the president. It allows the payroll tax cut to expire, thereby effectively giving every working American gets a tax hike of 2% of their income (up to about $113,000 in income). 

This deal is a mixed bag – no doubt about it. And if it were the end of the story, I would be much more optimistic. But since it just kicks the proverbial can down the road on the sequester and debt ceiling, it therefore sets up the right-wing House zealots to hold the economy hostage once more, while demanding deep cuts in public services backed by another media frenzy about deficits.  And while Social Security, Medicare and Medicaid escaped unscathed in this deal, they will be the prime targets in the coming debate.

So stay tuned folks – I’m hoping for a lucky 113th. And you should be too.