Obama vanquishes his enemies. They never learn. And he will do it again with the debt limit, leaving the Republican party in ruins.

So a family of four making 60000 a year sees their transfers to the federal government go up 2% of their income while an individual making 400,000 sees their transfers going up 0.6% of their income. I think we need some training about putting to the man.

If establishment centrist, John Judis says that Obama won the negotiations, I am sure it must be true.

However, so many things didn't happen, which means the Republican congress will once again hold the country hostage in 3 months when with the debt limit issue.

@2 Are we assuming, then, that all four people are working? I don't get it.

it was a lot about naught - 5% of the deficit. only america got played, because that actually was the best they could do.

wake me up when they cut the DoD by 25%.

@4 He's yapping about a separate but related issue, the payroll tax (soc. sec. withholding).

Obama definitely won but I'm not so sure about America or anybody half-way progressive. Obama got most of what he asked for. The problem is what he asked for: not only preservation of the vast majority of the Bush tax cuts but making them permanent. Republicans have pushed the dialog on taxes so far to the right that the $250K limit is the only reasonable position for Obama to take apparently. In that sense, the Republicans won already years ago.

+1 for Max Solomon @5 and decidedlyodd @7. This fiscal cliff deal is like a treaty of surrender in the war over tax rates. Victory to Bush (tax rates), defeat to Clinton (tax rates). As decidedlyodd points out, the terms of the debate have shifted so far to the right that this bill became a Democratic victory muscled through with Democratic votes.

One can argue, as I would, that we should be shifting away from income taxes and to things like carbon taxes when it comes to raising revenue, but good luck introducing those new taxes now that you can't balance them out with cuts in the existing taxes.

And about the payroll tax hike, I've never been so relieved to know there's going to be less money in my paycheck.

Clarifying my comment @8. Considering the circumstances, I thought this was a deal worth making. Lawrence O'Donnell made a convincing case why last night on MSNBC. See "Fiscal cliff deal was the best deal possible."

@7 I agree. The fact is, raising taxes on everyone over $150K, and raising the progressive taxation curve, probably wouldn't hurt our private economy much, and it would not only curtail the annual budget deficits, but provide funds for large-scale infrastructure projects and other stimulative programs. If you did it right, you could even lower the tax rates on those below $50K, which would also be stimulative, since those folks actually spend the money they get rather than sock it away.

We're doing everything wrong. The Republicans can claim credit for this, since they changed the dialog from recession/recovery/stimulus to deficit/debt reduction, and some canard about "job creators."

Seriously, you can do both. We just need Reagan tax rates and Kennedy national goals.

And, the only thing that creates jobs is spending, either private or government, and right now neither is at sufficient levels.

Nice that taxes went up for wealthy households, but that 2% increase in payroll taxes will hit the poorest and middle classes much harder.

So once again, the poor and middle classes sacrifice so that the wealthy may sock away more money.

I guess it is really all we could expect from the negotiations.

Oh, and tax rates are never "permanent." They just get adjusted. These "permanent" tax rates could be changed tomorrow if congress wanted to do so.

That payroll tax cut should never have been put in place to begin with. This is a small step towards us becoming adults when it comes to taxation. What we should be doing is taxing the wealthy for being alive, doubling the estate tax, and starting a birth tax in an effort to avoid inbreds like the Walton Family and Paris Hilton.

Also, tax capital gains at the same rate as earnings, and make everyone pay into Social Security for every dollar earned.

http://therealnews.com/t2/index.php?opti…

http://therealnews.com/t2/index.php?opti…

@ 7 and others, there's only so much that can be accomplished so long as a) Republicans retain their gerrymandered majority in the House, and b) the GOP is controlled by its most radical element. Many of the worst come from absolutely safe districts, and who will only be thrown out of office if more moderate Republicans can challenge them in primaries. Given that the trend has been in the opposite direction until now (teabaggers defeating moderates), it's hard to say when that might happen.

I feel that Obama did the best that he could. Maybe going over the cliff, while painful for most Americans, would have been better in the long run, if they could be sure they'd fix it before it caused a recession. But there's no guarantee of that.

That's somewhat beside the point, which is more about the political victory. Assuming it's as clear as Judis and Eli are presenting, then the significance is that Obama begins his second term with the upper hand and, more importantly, is likely to be conduct it with more authority and confidence than he displayed in his first term. It's hard to say how far he'll get with the next session of Congress, especially if they teabaggers continue to control things in the House, but they'll have to contend with a president whose authority is now confirmed and who can bring pressure to bear upon them. Long term, it's going to be key to rolling back their policies and passing sensible ones in their place.

Theodore Gorath:

Nice that taxes went up for wealthy households, but that 2% increase in payroll taxes will hit the poorest and middle classes much harder.

So once again, the poor and middle classes sacrifice so that the wealthy may sock away more money.

This may come as a shock to you, but that 2% increase in payroll taxes is going toward the programs that are the foundation of our middle class. But something tells me you already are aware of that, considering that most of the people who are out there complaining about the burden of payroll taxes on the middle class are the same people who are pushing policies that would dismantle the middle class.

Everyone's still making lame excuses, I see.

Obama didn't do anything terrible in negotiations here because he's on the Republicans' side when it comes to market supremacy. Isn't that obvious by now since he accepts their premises when "debating" with them? The deficit is not a problem when we're in a liquidity trap and have 15% unemployment.

This is simply a rouse to introduce the idea of chained CPI as something that needs to be done. Medicare is next.

Catalina @13 raises a point that has been on my mind: Also, tax capital gains at the same rate as earnings,...

Yesterday on the NY Times web site, I went digging around for what this bill does for capital gains and dividends rates. Eventually I found a story in the business section reporting that it raises the rate from 15% to 20% but only on income over the $400K/$450K threshold.

I have to blame Obama for focusing the debate on "earned" income and not investment income. When Warren Buffett keeps talking about his paying a higher rate than his secretary, he's talking about the preferential rates for investment income, and yet, in this whole fiscal cliff debate, it's like that issue never existed.

And while I'm not sure I agree with Catalina that investment income should be taxed as high as earned income, 15%/20% strikes me a really low in comparison, especially considering that AFAIK (someone correct me here) investment income is not subject to payroll taxes.

I don't care if Obama "won." I care about entitlements and tax breaks that students, the poor, the elderly, and working people rely on. When are we going to hear about likely cuts?

@17: Damn, you should call Guinness and see if that huge leap you took is a world record.

The point is that we can make up the revenue we desperately need to run the nation from taxing the wealthiest another 1% percent, rather than tax the poorest another 2%. The poor need the money to stay out of poverty, feed their children, and spend to keep the economy moving.

The rich "need" the money in order to make their bank statement higher. I am not advocating for lower taxes, I am advocating for a fairer tax burden on those who can easily afford it. The wealthy have had it too easy for too long as far as tax burdens go.

Cressona dear, how about a compromise of sorts? Regular people pay less for capital gains, the rich get soaked?

Yes, I am hard on the rich, but the rich are parasites. Plus, they have the resources to protect themselves against draconian laws.

@20 You should be hearing about them right about now that Republicans have begun to regroup for the debt ceiling battle. Expect to hear a lot about "debt", and "irresponsible spending", and "passing the buck to our grandchildren", and "spending is the problem" and a whole lot of that trite cannard. Lots of chest pounding. I'm guessing the new phrase will be "spending cliff".

My hope is that Americans are now getting tired of that song and Obama will, as the featured excerpt states, campaign and frame the issue. Republicans come into the debate already looking bad from the fiscal cliff battle, so Obama already has an advantage. If the poll numbers are bad enough - meaning that Obama is winning the message - then we may not see a drastic slashing of government assistance... er, I mean entitlements.

Er, hate to burst your bubble, but we really don't know if Obama 'won' or not until two months from now. The New Republic is more pro-dem party than pro-liberal, so I don't really trust their analysis. My question to all the Obama cheerleaders and apologists out there is whether his 'deal' represents good policy or is still bad policy, just not as bad as republican policy? In two months Obama will be urging dems to cut social security and medicare benefits, in order to 'strengthen' those programs. (Kind of like having to destroy the village in order to save it...). All you Obama-bots will be cheering him on too and when the dust settles, claim a huge victory for liberals.I think the radical republican extremism has blinded most of you to how anti-liberal Obama really is.

Cutting the military would be foolish at this time since the military has historically been the biggest stimulus package the government has. Cuts need to go to stop having multinationals do the jobs the military members used to do and let them start doing them again. Bring home that cash by giving it to military members who spend every dime of it. No more $100k mercenaries with off shore accounts. Then we can slowly shrink the size of the military and prevent the horrible effects of a radical cut.

I thought the rate would go up like 4.6% on people making over 400k, and only on what they made over the 400k line, so yay?

@24 Obama did say he supports the chained CPI, so you're probably right about Obama rushing to cut Social Security and Medicare.

Theodore Gorath @21: The point is that we can make up the revenue we desperately need to run the nation from taxing the wealthiest another 1% percent, rather than tax the poorest another 2%.

Catalina Vel-DuRay @22: Yes, I am hard on the rich, but the rich are parasites.

I think we're getting to the essence of how the Republicans won the rhetorical war, even if they don't realize it. Progressives, as much as conservatives, have come to believe that we can continue to get all the government we want without paying higher taxes ourselves. We just have to find someone else to tax. And yet, dollar-wise, we've recovered only a minor portion of the revenues from restoring the Clinton tax rates for incomes over $400K/$450K. And good luck with Medicare now that the baby boomers are retiring.

The politicians, including Obama, have been so busy pandering to the middle class that the poor, suffering middle class has come to believe that it deserves the lifestyle it used to have during the halcyon days of American empire without having to make any smart sacrifices (as opposed to the sacrifices that have already been forced upon us).

Yes, I believe in Social Security and Medicare and Medicaid and Obamacare, I believe in slashing military spending, I believe in a progressive tax system, I believe that balancing the budget at a time like this is nuts, but the only way we're going to get a real progressive moment in this country is when the 98% or 99% realize that collective sacrifice starts with us.

@29 Everybody knows it's easier to force the poor to make do with even less than to get the wealthy to pay their share.

Well gang..cutting Social Security or Medicare IS passing the burden off to our children and grandchildren. When those get cut or tied to the CPI expect more seniors to have to live with their children in the coming years. They won't be able to live on their own and since the 401K's are turning out to be nothing but a ponzi scheme they can't well live off of those. (And remember what your employer won't tell you: 4001K's are only tax DEFERRED, not tax free...you pay income tax when you start to draw money out of your fund)

AND since we are a society that is driving the wages of the 99% downward those children and grandchildren are going to have an even harder time taking care of themselves let alone their parents and grandparents.

@27, "everybody knows" no such thing. Social Security costs are not the problem. In fact, the real problem is that income inequality has lowered revenues so that 100% of benefits won't be payable after 2034. But that's a long way out, and it's a simple fix and good deal just to gradually raise Social Security taxes (including raising the cap) to meet promised benefit levels. But even if we did nothing we'd still pay out around 80% of benefits forever (sometimes more, sometimes less). So nothing needs to be done on the "cost" side. In fact, I'd say we should use the experimental inflation index for the elderly, which would actually increase annual COLAs for beneficiaries, and seriously consider just raising benefits overall now that private pensions and 401(k)s have tanked and more people will rely on Social Security in the future. The rise in payroll taxes would be worth it.

Medicare's rising costs to now and in the future are all the result of high overall costs because of private insurance wrecking how we pay for health care. The fix is to simply kick out private insurers from the system as quickly as possible. In fact, some indications are that medical costs have already slowed and that the pessimistic projections for Medicare won't happen given the trends of the last few years and the implementation of Obamacare. But if we want to be sure, we just need to expand Medicare to include younger people in the pool, and move away from fee for service for everyone. Again, the problem isn't with benefits, but with the waste in our current system, thanks to private insurers and overbilling by providers.

It's also worth pointing out that all of the proposed methods of cutting these programs actually either cost money to the federal government (such as by shifting people from Medicare to Medicaid, or by increasing health costs as people lose coverage and get sicker) or just shift costs to individuals from government. It's all just making things worse for lower-income old people (and old people in general, which will eventually include all of us who don't die at a younger age), so that rich people don't have to pay their fair share. It's not an intergenerational issue. It's an issue of inequality across all generations.

@29 Keep saying that often enough, and... you know what? It still won't be true.

Social Security is paid for by its eventual recipients, with surplus tax collections held in a trust fund. As of today, it's sitting on a sea of cash (forced by law to be invested in Treasury "nonmarketable securities") of over $2.5 Trillion.

(Don't believe it? Go poke around on the Treasury's website, find the latest MSPD and look at the line "Federal Old-Age and Survivors Insurance Trust Fund.")

Medicare, too, is self-funded. It's surplus/trust fund is over $60 Billion right now, also invested in Treasury bonds. It's the line right after the Old-Age & Survivors one.

The only way either of these affects the federal budget is through the accounting canard of counting these separate programs as part of the national budget for income purposes. Sure, it was fun while they were accumulating their surpluses. Conservatives, who hated the social programs they represented anyway, could use those surplus collections to pretend that the rest of the budget was balanced enough that they could afford giant tax breaks, especially for the rich. But now... Now that we not only aren't accumulating such large surpluses, but have to start tapping those surplus funds for the purpose intended (i.e. the intergenerational population dip), the budget not only looks more awful, but it's exacerbated by needing to pay it back.

So, fuck you and that stupid lie you're repeating. They're "entitlements" because we fucking paid into a system designed and fully funded to provide those benefits.

Sorry, I meant @29.

Cressona. I love you. Thank you for your comments.

@28: So you think the middle class has been robbing the rich for years in order to pay for their opulent and unsustainable lifestyles? My god, where have you been living?

Yes, we all need to make sacrifices, but for some reason you think it is best that the people who have been sacrificing nonstop since the 70s, should sacrifice even more so that the top earners can sacrifice even less.

We are talking about payroll taxes, the largest tax burden carried by the lower classes (sales tax is too variable to use here). So when you are talking about raising them 2%, that is around $500-$1,000 a year for poorer households. That is the difference between making rent, affording medicine, or feeding your children.

So pardon me if I think it is better for the nation that the rich pay an additional 1% so that poor people can eat and have medicine. I know having to go without that new luxury car or having to only travel for a few months a year is a real tragedy too, but the rich need to start shouldering a fair tax burden.

When we ask 16% of people living in poverty, and 15% of people earning $2,000,000 a year of capital gains, there is a serious problem. Hell, I pay over 33%...not that I mind funding my government, but why should I pay that much while people much richer and more comfortable pay less? It is baldly unfair.

But hey, you aren't poor so who gives a fuck if they starve or get sick? The richest among us need a few tens of thousands more dollars a year to send to the Caymans, right?

@25 Yes, the privatization of the military should be reversed, and yes, the military spending is stimulatory. But military spending as stimulus is typically described as less effective than civilian spending (sorry, I don't have links) and our military spending leads the world while our tax revenue is relatively low. We either need to shift military spending to civilian infrastructure spending, and/or raise total taxation to cover the cost of our ten carrier battle groups trying to control the whole world.

We can't have low taxes while also having a huge military (and a highly inefficient for-profit health care system). That's what budget hawks should be fighting about, not Social Security.

@29 Everybody else knows that we are paying fucking BILLIONS of dollars into the (illegal) Iraq and Afghanistan (and Pakistan) (and Yemen) (and Iran) wars, --($3.2-4 trillion," no kidding? that's a lot!)--, to say nothing of the various 'black budgets' and covert wars that we're engaged in, as well as the cost of maintaining all our 800+ bases around the world, also all that VA care + pensions for veteran soldiers. And I'm SURE that military contractors actually charge a completely legitimate and reasonable price for their goods and services too.

I'm quite certain all that was very carefully budgeted for and wasn't done basically off the books by a previous president, getting us into a budget deficit "crisis" years later, from which we now need "austerity" from the lower classes to fix.

Yep, nothing to balance from that end of the spectrum; better to screw the little people again by reducing social security and medicare. Reducing the... --oh what are they called again?, ah yes: "entitlements". Such a lovely loaded word.

Sorta like the "entitlements" of paying very little (or nothing) in taxes that the rich & corporations seem to get.

Obama once again demonstrates how he can take a mandate and turn it into milquetoast.

To be sure, I - a middle-class mannequin if there ever was one - have absolutely no problem paying more in taxes, even though I am not exactly swimming in cash. That's because I believe in paying my part.

But I think we need to absolutely soak the rich. It's for their own good: Throughout history, when we have had great economic inequality, the rich are the ones who end up missing their heads or lined up against the executioner's wall (along with their lackeys, usually)

Greed is one of the worst human impulses, and Reagan put a kindly face on it. It's time to reign it in for the sake of the nation.

@29,

Yes, we need to reign in the cost of Social Security so it can exist in perpetuity. But you know what won't do that? Changing the cost of living increases to chained CPI so the federal government can raid the Social Security trust to close the deficit. If we switch to chained CPI it should be *solely* to ensure Social Security's longevity, but your buddies in the Republican Party are too busy salivating over stealing our money.

@38,

The payroll tax "cut" was actually a tax holiday, which means it was always going to go back up eventually, although ideally once the economy had actually recovered. And, that, my friends, is why the Republican anti-tax orthodoxy and "temporary" tax breaks they keep introducing are so toxic. Even when it's made crystal clear that a tax break is temporary and is only being offered as a temporary stimulatory measure, people expect it to last in perpetuity. And, here we are, with the "temporary" Bush tax cuts enshrined into law.

And, yes, our tax code is insanely unfair, and anyone who claims otherwise (like that worthless troll "You Gotta Be Kidding Me") is invited to suck my dick, but the solution for that isn't to starve Social Security.

The Rs in the House lost because their standards are so much different than the rest of the world. The Rs in the House are bought and paid for by the rich with the express concern to not raising taxes on the rich.

When they go back to their constituents, what can they say? "We only failed in our single mission a little?"

The Ds in the Senate and Executive are the party of reasonable people. Read these comments. Almost everyone agrees with the premise we all need to pay our fair share. Almost no one feels terrible about ending the payroll tax holiday.

Obama campaigned: "I will be much more effective at managing the do-nothing Congress in my next term."

Obama showed he has the chops to deliver on this promise.

As far as deficits and spending cuts are concerned: Our debt is growing in relation to our GDP. Make our GDP grow faster than our debt, and suddenly we don't have a recession. So long as world-wide interest rates are low, our debt problem isn't that much of a problem.

The only R victory here is convincing the country our major problem is debt instead of slow-growing GDP.

Obama and the Ds understand this. They will frame every spending issue from now on against the Rs (look at the hurricane relief vote). They will push social issues (immigration reform) instead and split the Rs in the House like my uncle splits 8s in blackjack.

Why don't the rich give us things like Carnegie gave us all those Free Libraries way back when? What happened to that kind of philanthropy?

There is great economic inequality on par with the worst of the Great Depression... and lawmakers want to take another pound of flesh from the bottom 2/3rds? The fix is in, isn't it? This is neoliberalism come back to haunt the capitalist nation that started it.

@21 It's impossible to get the kind of new revenue we need from the poor (they don't have any money) or the rich (they have money but there are comparatively very few of them). The tax portion of the deal just passed is expected to raise $620 billion over 10 years. Compare that to the estimated $5 trillion over 10 years that would have been raised if nothing was done about the fiscal cliff. It's only about 12% of the revenue that would have been raised by increasing taxes on everybody (mostly the middle class) back to pre-Bush rates.