Both houses of Congress and the president reached a deal that avoids Washington’s self-imposed fiscal cliff of automatic tax increases and spending cuts. A compromise between Democrats and Republicans locks in Bush tax cuts for Americans earning less than $400,000 and raises taxes for incomes above that figure. It also extends unemployment benefits and ends the payroll tax cut, meaning more than three-quarters of U.S. households will see a slight jump in taxes.
If compromise is a bargain that leaves both sides feeling they gave too much, then this fiscal cliff-avoidance bill is one for the hall of fame. A majority of House Republicans voted against the plan in a marathon session on Tuesday. Democrats are grousing that President Barack Obama caved too easily.
These are arguments for another day. Our concern is that the so-called fiscal cliff we appear to have avoided is but one in a series of challenges. In other words, Americans may have crawled in midair back to safe ground, a la Daffy Duck, but there’s an ACME safe headed straight for our collective heads.
It’s expected by March that Washington will commence a fresh set of brinksmanship. This time the argument will be over raising the debt ceiling. Republicans have signaled they will not raise the debt ceiling unless they extract massive spending cuts from the Obama administration. Not this time, comes the response from the White House. Playing around with the nation defaulting on its debt isn’t something Obama is apparently willing to discuss.
These are proxy fights over a bigger ideological struggle. Should government grow or should it shrink? An even more important question is who will feel the most pain from the shrinking?
Democrats have voiced support for a stronger and smarter government. Its actions have often not matched its rhetoric. Yet, there’s little argument that a more reliable social safety net and investment in the nation’s economy are the keys to greater prosperity. Democrats seem willing to play along up to the point its supporters on Wall Street raise the red flag.
The Republican side says it is dedicated to drastically shrinking government. It has rallied a dedicated base of supporters who say that’s what they want. A closer inspection finds the cutting is highly specific for the GOP. Cuts to the Defense Department are generally off the table. Despite the bluster of the Tea Partiers, very few on the GOP side want to see Medicare or Social Security on the chopping block.
Don’t expect this cartoon to end any time soon.