What to make of the House’s ratification this week of the budget package passed by the U.S. Senate just minutes into 2013? I had no doubt about what the House should do, and said so in this space on New Year’s morning, and it’s to reject a deal that did nothing on spending cuts. But while the House Republicans didn’t seem thrilled with the deal, they voted it in, and the reasons given for justification illustrate divides in the GOP coalition.
Let me begin by saying I don’t think “divides” in a coalition are alarming—any party that’s going to govern a country the size of the United States has to put together disparate groups who aren’t going to always agree. In this case, the divide was between those who wanted to protect the country from tax increases and those who wanted to see spending cuts.
The budget vote revealed a divide between tax-cutters and spending-cutters in the Republican coalition
If you’re in the former group, you have to be reasonably happy with this deal. Marginal tax rates only went up on people making over $400,000 annually. Furthermore, keep in mind that the current tax rates, set in place by the tax cuts passed in 2001—referred to as “the Bush tax cuts” were never permanent. This package locked in about 99 percent of those cuts as permanent.
Unfortunately, payroll taxes rose on millions of middle-to-working class people. But neither party showed any interest there—Republicans were apparently interested in living up to a stereotype, and Democrats define defending the middle class solely by whether they tax the rich, not whether they actually help the middle class.
But spending cuts, which would have gone into effect automatically, without a deal, were completely passed over. The official storyline is that dealing with them has been deferred for a couple months. Right. And two months from now it will be deferred again. Washington’s aversion to cutting spending can be seen in the fact that they chose to use the term “fiscal cliff” to define a process where automatic cuts would kick in. Only politicians would see having to constrain their budget as akin to the end of civilization itself.
House Republicans had a choice to make, between stopping tax increases or allowing spending cuts and they chose the former. It’s a defensible position, but not one I agree with. Out-of-control spending is the biggest problem this government faces and whatever your long-term priorities are—be they liberal or conservative—they are hindered by the rising national debt. Letting tax rates go up a few percentage points in exchange for real cuts was, in my view, a reasonable deal, given the current power distribution in the government. That’s why I still believe ratification of this deal was a mistake.
Dan Flaherty is the author of Fulcrum, an Irish Catholic novel set in postwar Boston with a traditional Democratic mayoral campaign at its heart, and he is the editor-in-chief of TheSportsNotebook.com