America Dodges Fiscal Cliff
Barrington M. Salmon | 1/2/2013, 7:50 a.m.
Businesses meanwhile, would benefit from a range of extended tax breaks and millions of families will not have to pay the alternative minimum tax going forward.
A crucial sticking point was how best to handle the sequester or automatic spending cuts. Democrats ceded ground to the Republicans by agreeing to tackle the issue in two months. Democrats had wanted to "kick the can down the road" until 2015.
But even as the prospects of a deal hung in the air, neither side could resist falling back on the partisanship, bickering and brinksmanship that have characterized the negotiations.
Obama took some jabs at Congress that didn't go over well.
"My preference would have been to solve all these problems in the context of a larger agreement, a bigger deal, a grand bargain, whatever you want to call it," he said. "[One] that solves our deficit problems in a balanced and responsible way, that doesn't just deal with the taxes, but deals with the spending in a balanced way so that we can put all this behind us and just focus on growing our economy. But with this Congress, that was obviously a little too much to hope for at this time."
That led to criticism from Republican lawmakers, who themselves were being savaged by the public for waiting until the 11th hour to resolve an issue they had more than a year to deal with.
By dodging the bullet, the country avoided a jump in unemployment of more than nine percent; the economy will likely not grind to a halt; the stock market will settle down; and America's credit rating, status abroad and global confidence will remain unaffected.
Last year, the president and Republicans agreed to $1 trillion in deficit reduction. In addition, the GOP wants another $1.4 trillion in cuts. Recently, Obama agreed in principle to implement $400 billion in cuts to Medicare this year. His left-wing and progressive supporters have made it clear, though, that they don't support any cuts to "entitlement" programs.
Alton Drew, an Atlanta-based legal and policy analyst, said he was surprised that a deal was consummated because he'd deduced from comments made by Obama last Friday evening that both sides would not be able to forge a deal. He, like a number of Americans, is disgusted with the raw partisan nature of politics in the nation's capital.
Drew, a Libertarian, said both parties appear to still be contesting the general elections.
"[That's] a waste of time," he said. "I don't know which constituency they're trying to satisfy. The American people want a deal."
"[And] I don't know why [Republicans] are so intent on protecting the rich. Unless you're running for Congress in 2014, you can do what you want."
Republican commentator Crystal Wright says that the real issue politicians are grappling with is spending not taxation.
"We have a spending problem. We're going to fall off the cliff because the president is not serious about spending," Wright said. "We will arrive at a deal in the new year. Sadly, they are leaning toward a deal on taxing higher earners. The president is never satisfied. He won't be satisfied until top earners end up paying more."