Dionne, Spitzer weigh in on the Cliff Deal

[Jackpine Radical]

In celebration of my own mixed feelings, I post 2 diverging opinions on the Fiscal Cliff deal from (what passes for) the Left:

http://www.alternet.org/news-amp-politics/president-obama-just-lost-his-leverage-debt-ceiling?akid=9892.187861.VV5wGv&rd=1&src=newsletter771009&t=8

Slate / By Eliot Spitzer
President Obama Just Lost His Leverage on the Debt Ceiling
Why did the president agree to a fiscal cliff deal without the debt ceiling being lifted?
January 3, 2013 |

Second guessing is oh so easy, and I always looked askance at those outside the negotiating room who had wisdom after the fact. But having said that …

Why did the president agree to a deal without the debt ceiling being lifted? Didn’t we play this script out once before? And didn’t the president, since he needs to be reasonable, in the end cave to Republicans who used the debt ceiling to extract concessions that shouldn’t have been granted?

This was the president’s moment of greatest leverage. The White House could have said to the House: Take us over the fiscal cliff, go ahead and have all taxes go up. You will suffer the wrath of the public—and for what? All we are demanding is that you eliminate a negotiation that will do enormous harm to the nation, a negotiation about the debt ceiling that merely authorizes us to borrow to pay for the expenditures you have voted for.

Having won the rhetorical debate about raising taxes on the wealthy, the president could have framed the debt-ceiling argument in an equally compelling way. All eyes would have been on the House of Representatives.

http://readersupportednews.org/opinion2/277-75/15371-the-deal-is-better-than-it-looks

Democracy, in its messy way, worked. An election had a real impact on public policy, moving it in a more progressive direction. Thus, for the first time since 1990, a significant number of Republicans voted to raise taxes - and they raised them most on the very rich. House Speaker John Boehner allowed a bill to become law on a vote in which far more Democrats (172) than Republicans (85) said "aye." The old rule that Republicans would only allow floor action on bills that could pass with GOP votes was swept away, at least this time.

The cliff deal made our tax code more progressive. The top income tax rate is back up to 39.6 percent. Capital gains taxes, cut repeatedly since the 1970s, were raised. Consider: The provisions enacted Tuesday night combined with the tax hike in the Affordable Care Act mean that capital gains taxes will now be 18.8 percent for couples with annual incomes of more than $250,000 and 23.8 percent for couples earning over $450,000.

True, Democrats caved in by failing to tax dividends as ordinary income, as they used to be. Capital gains should also be taxed as ordinary income, or, at the least, at around 30 percent. But is this progress? The answer is yes.

There are other pieces of good news in the bill, including an extension of unemployment benefits and the various refundable tax credits that are especially helpful to lower-income people. The estate tax rises to 40 percent on fortunes of more than $5 million. Yes, it's still too low. But at the end of George W. Bush's term, we were looking at a complete repeal of the estate tax. Isn't 40 percent better than zero?