The President and Congress managed to make a deal in the nick of time and the Senate approved it. Well, technically we did go over the fiscal cliff because no deal was made until New Year's Day, which was past the deadline. So, in all reality, we went over the fiscal cliff, hit the bottom, and then they decided to (temporarily), put aside their petty differences) and put the pieces back together. This has become typical of our government. Most decisions are reactive instead of proactive, and far too cautionary to do much good when it is needed. Add a touch of ego, and a lot of posturing and the results are often indecipherable laws and proposals full of supposition and rife with jurisprudence.
Here are the terms of the "new deal".
1. Higher taxes on individuals earning $400,000 and on families making $450,000 or more. Under that threshold, the Bush-era tax cuts will be permanent for all but the wealthiest households.
2. Higher tax rates on capital gains and dividends for wealthier households. Capitol Gains are taxes paid on the returns or profits made from the sale of real estate, stocks or other investments. Taxes on capital gains and dividends will be held at their current levels of 15 percent for individuals making less than $400,000 and households with income of less than $450,000. They will rise to 20% for individual taxpayers and for households above those thresholds.
3. Automatic spending cuts have been delayed for two months. This measure which would impose steep, across-the-board cuts to domestic and defense programs, will be delayed for two months.
4. One-year extension to unemployment insurance. Emergency unemployment benefits will be extended for a year. The extension was a priority for President Obama and congressional Democrats to give the average American help rebuilding their financial foundation in the wake of the economic down turn.
5. A one year "doc fix." This would put off scheduled cuts in physician payments under Medicare. In the absence of an agreement, the payments were going to be reduced by 27 percent in January.
6. A nine month farm bill extension. Cereal lovers, rejoice. A much-feared spike in milk prices, dubbed the “dairy cliff” because it was also set to kick in abruptly on Jan. 1, will be averted through a nine-month extension of certain portions of the farm bill. So have no fear! There will be no Corn Flakes without the milk.
7. Personal exemptions phased out for individuals making over $250,000. Personal exemptions will be phased out and itemized deductions will be limited for taxpayers making over $250,000 and families earning more than $300,000. No more loopholes to help the rich get richer.
8. A permanent fix to the Alternative Minimum Tax. The alternative minimum tax was designed to ensure that the wealthiest Americans paid a fair share of taxes. It was not adjusted for inflation but is usually “patched” annually to prevent an increasingly large segment of middle-class Americans from being caught in its net. As part of the fiscal deal, the AMT will be permanently indexed to inflation.
9. Tax breaks for working families. The deal includes five year extensions of the American Opportunity Tax Credit, which can be claimed for college-related expenses, the Child Tax Credit, and the Earned Income Tax Credit, which is a refundable income-tax credit for lowi to moderate income working Americans.
11. Business tax breaks. The Senate Finance Committee passed a package in August that tackled a variety of routinely expiring tax provisions known as extenders. These popular tax provisions include breaks for research and development. That package passed as part of the broader cliff deal.
Last but not least my personal favorite part of the deal.
12. A Congressional pay freeze. President Obama recently authorized a congressional pay raise. Under the New Year's cliff measure, members of Congress won't see their pay increase.
Given the fact that most of them are millionaires this is perhaps the most appropriate measure for the greater good of the country.
Although an agreement has been made. There are some major issues that have not been addressed. Such as;
An agreement to raise the debt ceiling. The nation reached its borrowing limit on Monday and the United States Treasure Department is trying to decertify going into default at least through February. Then it will be an issue that Congress will have to contend with again. The previous negotiation resulted in the US credit rating being downgraded.
Extension of the payroll-tax cut. A temporary, 2-percentage point cut to the payroll tax expired at midnight on Dec. 31, 2012, and was not renewed. If you make $50,000, that’s an extra $1,000 in taxes you will be paying this year.
All and all this deal sounds fair and rational. Those who earn more money pay more taxes, and those who need help are getting help.
The thing that disturbs me is the fact that the President won the election, and is still facing opposition concerning issues that were once routine for other President's. Things that never made news in the past are now laid out between the sheets of just about every newspaper, as if they were matters of spectacle. Part of a GOP vs. Obama theme. Cooperative bipartisan measures which were once common place have turned to political brawls fueled by an us against them mentality in a way that has never been seen before and there is always and underlying tone of disdain for President Obama. They call him cocky, arrogant, and elitist. Code which basically says who does this "black guy" think he is? This is nothing more than subtle racism served with a beeping portion of disrespect.