Wednesday, January 9, 2013

Fiscal deal means little sacrifice


By CHARLES BABINGTON

Associated Press

The U.S. Congress’ frantic resolution of the “fiscal cliff’’ crisis is the latest in a long series of decisions by lawmakers and the White House to do less than promised—and to ask Americans for little sacrifice—in confronting the nation’s growing debt. 

The deal will generate $600 billion in new revenue over 10 years, less than half the amount President Barack Obama first called for. It will raise income tax rates only on the very rich, despite Obama’s campaign for broader increases. 

It puts off the toughest decisions about more than $100 billion in spending cuts for military and domestic programs. And it does nothing to mitigate the looming partisan showdown on the $16.4 trillion debt ceiling, which must rise in the coming weeks to avoid default on U.S. loans. 

In short, the deal reached between Obama and congressional Republicans continues to let Americans enjoy relatively high levels of government service at low levels of taxation. The only way that’s possible, of course, is through heavy borrowing, which future generations will inherit. 

“It is a huge missed opportunity,’’ said William Gale, co-director of the nonpartisan Tax Policy Center and a former Republican White House adviser. “Going over the cliff would have put us on a better budget path.’’ 

The point of the congressionally created cliff was to force the government—which borrows about 40 cents of every dollar it spends—to begin a fiscal diet that would spread the unpleasantness widely. Instead, Congress and the White House did what they almost always do. At the last minute, they downsized their proposals, protecting nearly every sector of society from serious pain. 

Every federal dollar, and every federal program, has avid supporters who can defend their functions. And every sector can explain why higher taxes would burden struggling people at the lower end, and “job creators’’ at the higher end. 

High levels of government service. Low levels of taxation. Big deficits to make up the difference. That’s what Americans have demanded and gotten from their federal government for years. The agreement by Obama and Congress to spare Americans the pain of a fiscal cliff is right in line with that tradition.




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