The House has passed the “fiscal cliff” deal the Senate passed early this morning. The media, of course, is reporting this as “crisis averted.”
Which is an absurd notion. Via Zero Hedge, here’s a chart showing the CBO’s projected annual revenues from these tax increases (assuming “the rich” sit still for them and don’t move their money to avoid the tax increases) pitted next to the 2011 budget deficit:
Does that look like we’ve solved anything? Does that look like “crisis averted?”
And keep in mind that, in addition to these new tax revenues, the “fiscal cliff” bill also includes $330 billion in new spending, and is projected to increase the deficit projects for the next ten years by nearly $4 trillion.
At Powerline, John Hinderaker points out that Republicans will be able to say “we told you so.”
…what happens now that Obama has gotten his way? It will soon become apparent that the fiscal cliff deal, including precisely the tax increases that Obama has been demanding for four years, makes hardly a dent in the deficit. At best, it will reduce the deficit by five or six percent. We will continue to run up deficits of close to $1 trillion a year, and the national debt will continue to grow, as Obama has always intended. This fact can’t be hidden; it will be reported. Journalists who have pulled their punches in the past because they wanted Obama to be re-elected will now begin to ask, what are we going to do about the deficit and the debt? At some point, perhaps sooner rather than later, interest rates will begin to rise, at which point the debt issue will become a crisis. And Republicans will say: we told you so.
Hinderaker is a bit more optimistic than I am. When the revenue from this bill doesn’t manifest itself, because the economy will likely react to tax increases in ways that produce less revenues, and when we realize that the debt and deficit problem isn’t really improving all that much the left/media will just say we haven’t gone far enough.
Republicans caved to tax hikes once, they’ll say, and they’ll cave again.
In related news, Grover Norquist is saying Republicans haven’t actually violated their “no tax hikes” pledges because both the Senate and House votes took place in 2013, after the Bush tax cuts (among others) had technically already expired.
So, according to Norquist, technically what Republicans were doing is cutting taxes again after they had automatically increased. Which sort of ignores the fact that some 77% of households will now be paying more in taxes.