With the news that both the U. S. Senate and House have now passed legislation beyond the eleventh hour to avert portions of the "fiscal cliff" from taking effect, I say with heavy sarcasm to our leaders, "Gee, thanks."
While many that would have been hit with huge tax increases can breathe a sigh of relief, the measure is deeply flawed on multiple counts. I would first note that an omnibus bill to address these matters should have been produced and approved long before now. No member of Congress can claim not to have known what was ahead, yet they chose to subject their constituents and the markets to uncertainty and anxiety.
The bill is a bare bones package which fails to address multiple issues. It does nothing to avert additional "fiscal cliffs" to come, most prominently including the looming need to increase the debt ceiling in order to avoid defaulting on the nation's obligations. Most disturbing is that the bill does not provide a net increase in revenue and the non-partisan Congressional Budget Office estimates that it will increase the national debt by a staggering $4 trillion over the next nine years.
President Obama has taken a hit and is seen as betraying his Democratic base because over a period of years, he has stood firm in his belief that the George W. Bush tax cuts must expire for families earning over $250,000 per year. He felt obligated to relent in a big way, allowing tax relief to continue for families earning up to $450,000 per year, which constitutes about 1% of our population. Staunch Republicans that had promised to maintain the Bush tax cuts for all also retreated and are seen as traitors by many for agreeing to increase tax rates for anyone.
There is plenty to hate in the bill that avoids the most immediate and onerous facets of the "fiscal cliff" and it does nothing to contradict the common knowledge that Congress is dysfunctional and the nation ungovernable. This bill may provide some ammunition to keep the stock market from sinking and to stave off a recession for the immediate future, but our stopgap, hyperpartisan, paralyzed government renders us the laughingstock of the world.