Late on New Year’s Day, the House of Representatives voted to pass a bill that will technically prevent the nation from going over the “fiscal cliff.” The president and his acolytes in the press are gloating that he took Republicans to the cleaners. Even conservative commentator Charles Krauthammer concedes Obama’s skill at forcing the GOP’s hand by attempting to divide the party into two warring factions — the more moderate members in the Senate who backed the legislation and the more conservative members in the House (read: the Tea Party), who did not.
So how big a victory is this for the president? Maybe the more critical question is how big a defeat is this for the American public, 77 percent of whom will see their taxes rise in 2013 according to the Tax Policy Center, a nonpartisan Washington research group. USA Today crunches the numbers:
Households earning between $40,000 and $50,000 a year face an average tax increase of $579 in 2013, according to the Tax Policy Center’s analysis. Households making between $50,000 and $75,000 a year face an average tax hike of $822.
The reason: the legislation does not prevent the expiration of a temporary reduction in Social Security payroll taxes. Last year, a 2 percentage-point temporary cut in federal payroll taxes was worth about $1,000 to a worker making $50,000 a year.
But the president’s triumphalism may be short-lived in any case. True, the market is up today, having breathed a collective sigh of relief that the fiscal cliff skirmish of 2012 is over. Yet, the fallout from raising tax rates permanently on the segment of the population that produces jobs is yet to be experienced. The president’s theory of a “middle-out” and “bottom-up” economy is yet to be tested.
What’s more is that the GOP may have bent under the pressure he exerted but it didn’t break. By signing off on the benighted bill last night, House Republicans hewed to the party line, presenting a united front as they head into the next fiscal cliff battle, which will take place presently. It will also give the party renewed vigor and added capital in demanding needed spending cuts in exchange for agreeing to raise the debt limit.
The year may have started with a bang for the White House. It’s anyone’s guess how long it will be before we start hearing the whimper.
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