colorlines.com — By shifting the definition of who is rich, the “fiscal cliff” deal passed by the Congress this week extends many of the notions that have made the United States the most economically unfair it has been in almost 50 years. At first blush, the American Taxpayer Relief Act, as it’s officially known, makes a lot of progress on the changes required to bring racial and economic fairness to America’s tax code. For the first time in almost 20 years, tax rates on the wealthy will rise. The estate tax on inheritances over $5 million will go up. The capital gains tax, which is the cornerstone of preserving the wealth of the super rich, will edge upward. These are all all positive developments. But the trouble is not in the top line of the deal, it’s in the details.
washingtonmonthly.com — In the web-wide effort to identify winners and losers in the “fiscal cliff” battle, one of the arguments we’ve heard cited most often is that George W. Bush was the big “winner” because his signature tax cuts finally became part of permanent law, not some temporary budget measure. This conceit, in fact, has become a big part of the progressive case that Obama got rolled. Like Republicans rationalizing votes for the tax bill, these progressives are pretending most Americans got the Bush tax cuts all over again, shiny new and fiscally lethal as they were the first time around. And both sides are using the word “enshrined” to refer to the magical effect the vote had on the tax cuts first enacted in 2001. Sorry, I don’t buy it.
propublica.org — It's been a year of eye-popping records for student debt. Outstanding student loan debt surpassed credit card debt, with one government estimate pegging total student loan debt at more than $1 trillion. Such staggering figures drew renewed attention to the fact that rising higher education costs and falling government support for state colleges and universities has burdened individual students and their families with immense debt — all at a time when new graduates face anemic prospects for getting a decent job. Increasingly, the debt burden falls on parents, not just students.
nytimes.com — We have a deal. But please hold your applause, indefinitely. We momentarily went over the fiscal cliff but clawed our way back up the rock face. Unfortunately, we are most likely in store for a never-ending series of cliffs for our economy, our government and indeed our country. Soon we’ll have to deal with the sequester, a debt-ceiling extension and possibly a budget, all of which hold the specter of revisiting the unresolvable conflicts and intransigence of the fiscal cliff. Imagine an M. C. Escher drawing of cliffs. Be clear: there is no reason to celebrate. This is a mournful moment. We — and by we I mean Congress, and by Congress I mean the Republicans in Congress — have again demonstrated just how broken and paralyzed our government has become, how beholden to hostage-takers, how vulnerable to extremism.
washingtonpost.com — To be deemed a serious analyst at the moment seems to require a lot of hand-wringing and sneering over how awful Congress looked the past few days as it rushed a “fiscal cliff” deal into law. So permit me to burn my membership card in the League of Commentators and Pundits. Of course, there was much wrong about how Congress, particularly the House of Representatives, dealt with the best-known deadline in recent political history. A better deal was available weeks ago. But in the end, some very important and positive things happened. Democracy, in its messy way, worked. An election had a real impact on public policy, moving it in a more progressive direction. Thus, for the first time since 1990, a significant number of Republicans voted to raise taxes — and they raised them most on the very rich.
washingtonpost.com — The Perils of Pauline melodrama over the “fiscal cliff” will drag on as Washington heads toward another “debt ceiling” faceoff that will climax over the next eight weeks or so. This farce captivates the media, but no one should be fooled. This is largely a debate about how much damage will be done to the economic recovery and who will bear the pain. There is bipartisan consensus that the tax hikes and spending cuts that Congress and the White House piled up to build the so-called fiscal cliff are too painful and will drive the economy into a recession. So the folderol is about what mix of taxes and spending cuts they can agree on that won’t be as harsh. Largely missing is any discussion of how to fix the economy, to make it work for working people once more. Just sustaining the faltering recovery won’t get it done.
inequality.org — Who won in the fiscal cliff deal? The lawyers won. Well, not just the lawyers. The lawyers, the doctors, the dentists, the middle managers, the advertising executives, the whole MBA crowd. Who won in the fiscal cliff deal were all those individuals making between $113,700 and $400,000 per year. For couples the numbers will be slightly higher, but still in the lower six figures. They’re the ones who will pay the least in new taxes. The fiscal cliff deal is not a bad deal. But it’s not a progressive deal. It’s a deal for the comfortable, not a deal for the struggling and the poor. Those of us with good jobs and advanced degrees can be satisfied. For the 80% of Americans who don’t, it’s just more bad news.
thenation.com — If you had told me in recent months that on January 2, 2013, we would have unemployment insurance extended for a year, an improved child tax credit and earned income tax credit extended for five years and no cuts to food stamps (SNAP), Medicaid or Social Security—I would have told you that you were out of your mind. I understand that the criticism coming from the left about this deal is based largely on where things stand for the next round of negotiations, and also a concern that the deal didn’t raise sufficient revenues to avert substantial cuts down the road. But I’m troubled by the lack of attention being paid to how this deal benefits the more than one in three Americans living below twice the poverty line. So let’s look at some of the particulars of this deal and how they affect low-income Americans.
nextnewdeal.net — While we often hear critics decrying the redistributive effects of American social spending, government aid does not always benefit households of limited means. Often, aid looks more like a million-dollar vacation home or a luxury health insurance plan than housing vouchers and food stamps. American social spending is more complex than a simple redistribution from high- to low-income households. Over time, the country’s tax and transfer system has adopted provisions that reward specific high-income households. These programs contribute to deficit growth and detract from spending targeted at alleviating poverty among working families.
policyshop.net — This is the headline we should really be seeing after last night's fiscal cliff deal. As a result of the deal, the bulk of the Bush tax cuts will remain permanently in place, the AMT will be eliminated, and Obama's stimulus tax cuts, mainly aimed at the working poor, will live on for another five years (as well as stimulus tax cuts for business.) According to the CBO, the final bill will cut taxes by $3.6 trillion compared to current law. Most of that lost revenue is due to extending the Bush tax cuts for households making under $450,000. Now, it is certainly imaginable that President Obama and Congressional Democrats will ask for, and get, additional revenues down the line. But it's a good bet that such future revenue will be relatively in modest in scope and that the big tax cut enacted yesterday will largely live in on.