The #FiscalCliff deal: What to like about it, and what to hate about it

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The Washington Examiner’s Philip Klein on the “good, bad, and ugly” about the fiscal cliff deal that will soon reach the President’s desk to be signed into law:

Conservatives believe that higher taxes are a bad thing, that the tax code needs to be dramatically overhauled and that the true driver of long-term debt is out of control spending, particularly on entitlements. For those who thought it was possible to emerge from the “fiscal cliff” showdown without tax increases, with genuine tax reform and with real spending cuts that made fundamental changes to entitlements, this deal is obviously a nonstarter.

For those who assumed that President Obama’s reelection and continued Democratic control of the Senate at a time when the nation was facing an automatic $4.5 trillion tax hike would inevitably mean higher taxes without actual tax or entitlement reforms, the deal is less bad. As the House considers the legislation today [now passed – ST], I thought it would be worth assessing the good, the bad and the ugly of the “fiscal cliff” deal.

The Good

At the start of 2013, income taxes were scheduled to go up on nearly every American, but if this deal becomes law, roughly 99 percent of taxpayers would be protected from those tax hikes. For over a decade, Democrats opposed the Bush tax cuts and prevented them from becoming permanent. Now, they have voted overwhelmingly to preserve about 84 percent of the dreaded cuts, which for years they demagogued as only benefitting the very rich.

Lawmakers also agreed on permanent changes that minimized the tax increases on estates and capital gains. In addition, the deal permanently prevented the Alternative Minimum Tax (originally passed in 1969 to capture a small number of rich households who were avoiding taxes) from hitting tens and millions of Americans. From a more technical standpoint, this also means that the deal locks in a Congressional Budget Office revenue baseline that will be as low as possible. So, if future Republicans propose real tax reform, we won’t end up with estimates saying that their proposals would cost trillions of dollars, because such proposals will no longer be judged against an unrealistic baseline that assumes all of the Bush tax cuts would otherwise expire and open the floodgates to new revenue.

A less publicized but still significant positive from the deal is that it formally repeals the CLASS Act, a long-term care entitlement that is part of Obama’s national health care law. Originally the brain child of the late Sen. Ted Kennedy, the program was slated to collect years of premiums before paying out any benefits, so Democrats cynically exploited this fact to claim twice as much deficit reduction through Obamacare as existed in reality. The Obama administration has already suspended implementation of the CLASS Act after conceding it is unworkable. But it still remains on the books, waiting to be reinstated at some point in the future. The fiscal cliff deal would put a stake through the heart of this program once and for all.

Read the rest for the “bad and the ugly.” And a lot of it is indeed bad and ugly.

The deal has understandably been dubbed a “crap sandwich” by many staunch conservatives who are very disappointed in the GOP House and Senate leadership for what they believe to be “caving” to Obama and Senate Democrats when it comes to raising taxes while at the same time not touching entitlement spending. Other staunch conservatives like yours truly also believe the fiscal cliff “deal” is indeed more or less a “crap sandwich”, but was also one GOP leadership in both chambers didn’t have much choice on in the 11th hour of negotiations, for sad but true reasons National Review Online’s Jim Geraghty explained well in his Morning Jolt newsletter from today (bolded emphasis added by me):

There’s a lot of anger, frustration, and disgust building in the righty grassroots in the past few weeks. Over the past week I saw a lot of comments on Twitter in the vein of “we have a spending problem! Why won’t Republicans insist we deal with that first!”

Fume at Speaker Boehner and Senate Minority Leader Mitch McConnell all you want, but here’s the problem: The chance to gain leverage in these negotiations was on Election Day, and the GOP came up with bubkes that day. Sequestration and the expiration of all of the Bush tax cuts presented an awful status quo to begin with, and there was really no better alternative that would get A) passed in a Senate controlled by Harry Reid and B) signed by President Obama. They don’t want what we want, and we don’t want what they want. And time was on their side in several ways, not least of which was that as of noon Thursday, a new Congress, with even more Democrats, is sworn into office.

There was and is no magic argument, anecdote, policy detail, or chart that could change that dynamic. What was worse — or perhaps, if you look at it a certain way, liberating — was that Republicans were and are just about certain to get the blame from most of the public for either the failure to reach a deal or for the unpopular parts of any deal reached. Some of this is because of the power of the presidential bully pulpit, and some of this reflects people’s enthusiasm for taxing somebody making more money than they do. But a lot of this dynamic is because a large segment of the public just doesn’t pay attention to budget fights and doesn’t want to pay attention to budget fights. So no matter what the numbers actually say, they’re inclined to blame the party they already consider to be the problem.

The bolded lines above can’t be emphasized enough. I primarily blame the mainstream media for every article written and every word uttered that insinuated or outright stated in one form or other that rising taxes on the middle class in the new year would be the “fault of the GOP members of Congress” if a deal wasn’t reached – when the House had already done its part ages ago, and when the Senate had and has stalled any House attempt at avoiding the exact scenario that would play out at the end of 2012. The damned Democrat Senate leadership, under demagogue Harry Reid, knew the “blame the GOP” narrative would play out to perfection courtesy of their banging the drum about how the GOP were allegedly being “obstructionist”, which of course their allies in the MSM picked up and successfully ran with. Not much of anything on Senate Democrats and their refusal to work with the House GOP. As a result – and Reid knew this would happen – the GOP would feel their backs up against the wall to compromise or if not, as Geraghty notes, lose what little political capital they have over something that, in reality, was the fault of Senate Democrats and our clueless celebrity President. Where has the MSM been when it comes to calling Senate Democrats to the carpet for their failure to pass a budget in over 3 years, and for their repeated attempts at stalling any House GOP attempts at avoiding a “fiscal cliff” showdown? They’ve been here: As usual, in the back pockets of Democrats, essentially being their puppets in painting the GOP as being the party who wants to “raise taxes”!

Now that this “deal” is out of the way, expect more big ideological battles ahead that the House and Senate GOP leadership must stay on the right side of – the fierce debate over spending cuts and raising the debt ceiling. Expect these battles to be especially bitter, considering how the two sides ripped each other to shreds during the negotiation process on the “fiscal cliff deal.” In particular, there is no love lost between Boehner and Reid, and I wouldn’t be surprised to see their animosity towards each other blow up in a very public way in the coming weeks.

The key for the GOP is to get AHEAD in the messaging war ON ALL FRONTS on this going forward as they can’t continue to allow the Democrats and their press pals to control the narrative in a way that puts the blame on the wrong side when it comes to wanting to combat this crisis in a meaningful way by having to make tough but crucial, critical choices on the issue of spending and entitlement reforms and taxes.

As they say, stay tuned.

Dear FLOTUS: Where exactly is this “huge recovery” you’re seeing?

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Really?

(CNSNews.com) – First Lady Michelle Obama said in a radio interview on Friday that the United States is in the “midst of a huge recovery” because of what “this president has done.”

Pablo Sato, co-host of Pablo & Freeon WPGC 95.5, a Washington, D.C.-area hip-hop radio station, asked the first lady:  “Mrs. Obama, you know what, in your words, tell us what you think the state of the union is in right now?”

Mrs. Obama said, “I mean, we are seeing right now that we are in the midst of a huge recovery. Right?  Because of what this president has done.”

[…]

Obama: “Pulled this economy from the brink of collapse when we were losing 800,000 jobs a month. Now were gaining every — throughout most of his presidency, we’ve been adding jobs to this economy because of what he’s been doing. The stock market has doubled. Housing prices are rising. Foreclosure rates are lowering. But in the face of that, you still have people trying to convince us that things aren’t better.”

[…]

Obama: “And that just doesn’t make sense. Now, Barack of all people knows that we still have a long way to go to completely rebuild the economy. But we’re headed in the right direction. And when you see all of that truth, it’s hard to understand why are people blocking this? Why are people talking about not raising taxes on wealthy people? Why is it that people don’t want to fight to make sure that veterans have job opportunities?”

Er, reality check, please.

Mrs. Obama  is either lying through her teeth or has been brainwashed from spending too much time in DC around the lying liars in this administration, including her husband. Take your pick.

Obama’s first big day as president-elect

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president-elect ObamaToday Obama held a presser (transcript here) on the economic crisis and discussed some of the plans he’ll try to implement to bring the economy out of the funk it’s in right now. Frankly, he looked like a deer in headlights. In the process, he made a ‘joke’ of sorts about seances and Nancy Reagan (and he said it after a remark he made about consulting with presidents who were “still living“) that didn’t go over well, for which he has apologized to her personally. I’ll cut him a break on it because he looked like a bundle of nerves. I would too if I had that thin of a resume and I’d just been elected president. Time for responsibility. No more “present” votes. No more skipping out on important votes due to “campaign responsibilities.”

During the press conference, Obama took questions from every network except …

Fox News.

On the same day he tried to ease the concerns the American public has about our struggling economy, two Iraqi insurgent groups called on Obama to pull US troops out of Iraq. See, Senator? When you repeatedly talked about how the war was a “mistake” and about how troop deaths were “wasted” on that “mistake” – and furthermore pushed for withdrawal, first by March 2008 and now a completed combat bridgade withdrawal 16 months from the time you take office, the American people weren’t the only ones paying attention.

In addition to Hamas, Hugo Chavez, and Fidel Castro, among others who praised Obama in the weeks leading up to the election, Iran’s prez made it clear earlier this week how excited he is by the fact Barack Obama was elected:

Iran’s Bush-bashing leader congratulated Barack Obama yesterday – the first time the fanatical regime has offered kind wishes to a US president-elect since radical Muslim clerics seized control in 1979.

“The great Iranian nation welcomes real, fundamental and fair changes in America’s behavior and policies,” President Mahmoud Ahmadinejad said, according to his state news agency.

Another senior leader – Prosecutor-General Ayatollah Qorban-Ali Dori-Najafabadi – said Obama can earn “the great Iranian nation’s forgiveness” by ending economic sanctions against Tehran, which has yet to apologize for taking more than 50 Americans hostage in 1979.

He arrogantly demanded “remorse for the past US government’s deeds.”

During the hostage crisis, from 1979-1981, the US severed diplomatic relations with Iran. They have never been re-established.

The Bush administration yesterday moved to clamp down on Tehran by barring financial institutions from routing certain money transfers through the United States for Iranian banks, its government and others there.

The move “will close the last general entry point for Iran to the US financial system,” the Treasury Department said.

At the United Nations, Iran’s mission released an unofficial translation of Ahmadinejad’s letter to Obama.

The world expects the president-elect to act so “unjust practices of the past six decades in the sensitive Middle East region are reversed in order to achieve the full restoration of the legitimate rights of nations, especially the aggrieved nations of Palestine, Iraq and Afghanistan,” the letter said.

Ahmadinejad also said he expects Obama will replace the US policy of “bullying” with “an approach based on justice and respect.”

The letters ends with blessings and warm wishes to “leaders of societies with the courage to learn from the mistakes of predecessors, and the ability to use every opportunity to serve the people.”

The article goes on to note how Israeli officials are urging Obama to continue the Bush policy of international diplomacy as it relates to Iran rather than the one on one heads of state unconditional meetings he has repeatedly pledged he would hold with some of the world’s most notorious despots, including Ahmadinejad .

Speaking of, a little further down in the article was an indication that another rogue “leader” was peerhaps ready to have direct talks with Obama: Kim Jong Il.

They’re just now figuring this out?

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Beyond his thin resume, his radical left associations, and the fact that he’s portrayed himself for the last two years as someone he’s not, what’s extremely worrisome about a possible Barack Obama presidency is the fact that not only would he implement a solidly liberal agenda – including tax and spend policies – but that he’d have a Democrat Congress, possibly a super-majority, in which to essentially allow him to do whatever he wants.

Today I read from three different people who either support an Obama presidency, or at the very least are not opposed to one, express concern that, well, having a Democrat president stand alongside a Democrat Congress in these uncertain economic times is … troubling.

Ilya Somin, Ross Douthat, and Mike Rappaport have all written in the last couple of days that an Obama victory next month could have long term economic consequences that would be harmful to the American economy, consequences that would be hard to turn back under a future Republican administration and/or Congress.

My response to this is: Welcome to the club! I have to wonder, though, what took these writers – all clearly smart and sharp individuals – so long to come to this conclusion? The subprime lending issue has been brewing for several years now, and the economy has been wobbly for the last year, with ‘experts’ predicting – and in some cases already calling it – a recession. With that in mind, and knowing that Barack Obama is a typical liberal in terms of never finding a government program he didn’t like and wanting to create more, right along with creating unnecessary tax burdens on the so-called “rich” – this in addition to his universal healthcare plan, it’s been a no-brainer for nearly two years now that in these uncertain times, both domestic as well as foreign, that Barack Obama would bring exactly the wrong type of “leadership” this country needs. No, McCain’s not perfect, but giving the Democrats unfettered control of the Congress and the WH, especially with knowing and understanding that their typical plans they propose to get to us out of an economic jam always revolve around spending massive amounts of money in order to pad existing entitlement programs and create new ones, while taxing successful people even more than they already are, would be bad news for America.

Glad these guys have joined the minority view in America right now – too bad it’s probably too late to convince more people to think the same.

Oh, and speaking of the subprime lending issue and the warning bells Republicans were ringing the last several years? In addition to trying via legislation to fix the problem, 19 of them wrote a letter in 2006 expressing their view that Congress needed to act and act swiftly to avoid a potential catastrophe down the road. McCain was one of the Senators who signed it. Barack Obama did not – nor did any other Democrat Senator. Surprise, surprise.

Billout bill fails in the House

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Via AP:

WASHINGTON – The House of Representatives rejected a $700 billion bailout today following extended debate where many members, including some who brokered the deal with it, was highly unpopular.

The preliminary vote was 185-197. Members had a limited amount of time to change their votes. Following the deadline, the margin was growing for those opposed to the measure.

Even as the electronic roll call began, Democratic and Republican leaders were uncertain about having enough votes to pass the politically unpopular plan. It’s the most sweeping government intervention in markets since the Great Depression.

The bailout puts in place an unprecedented federal program to buy up rotten assets from cash-starved firms. The goal is to free up choked credit that was threatening to cause broader market turmoil.

“Many of us feel that the national interest requires us to do something which is, in many ways, unpopular,” said Rep. Barney Frank, the Financial Services Committee chairman, before the vote. “It is hard to get political credit for avoiding something that has not yet happened.”

The bill was the product of marathon bargaining over the weekend among various House and Senate representatives.

Hot Air’s tracking the latest developments (more here).  I’ll be back later tonight to catch up on all this.

Unemployment At Lowest Point In 5 1/2 Years

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You probably won’t see this on the nightly news, and you sure as heck won’t hear it from any Democrat:

The U.S. unemployment rate dropped to its lowest in nearly 5-1/2 years during October as 92,000 more jobs were added and hiring in each of the two prior months was revised up, a government report on Friday showed.

The October new-jobs figure was below Wall Street economists’ expectations for 125,000 but the Labor Department said a total 139,000 more jobs were created in August and September than it had previously thought. It revised up September’s job-creation total to 148,000, or nearly three times the 51,000 it reported a month ago, and said there were 230,000 new jobs in August instead of 188,000.

The unemployment rate fell in October to 4.4 percent from 4.6 percent in September. It was the lowest unemployment rate since 4.3 percent in May 2001 and was likely to fan concerns that labor markets are growing tight and could contribute to inflation pressures.

Average hourly earnings rose 0.4 percent to $16.91 – higher than the 0.3 percent that analysts had anticipated – while the average work week edged up to 33.9 hours from 33.8. Over the year, average hourly earnings have risen by 3.9 percent, the department said.

Most of the new hiring in October was in service industries, where 152,000 new jobs were created, while goods-producing industries shed 60,000 jobs.

It just kills the media to have to report on how the economy is in such great shape, so they have to throw in those other figures, despite the positives they just mentioned.

“Oh, it’s all burger-flipping jobs” is what they’re trying to say. Nevermind that earnings are up and have been going up for some time. Nevermind that we’re nearing a point that could be considered “full employment”. Nevermind that the stock market is at an all-time high. That all means nothing. It goes against the Democrat’s meme, that the economy is terrible and people are hurting, selling their bodily fluids to pay their gas bills, what have you.

The fact is that the tax cuts worked, the economy is humming along, and everyone, regardless of politics, should be happy about that.

Brian runs the website Iowa Voice, and is filling in for ST for a few days.