As the clock struck midnight on January 1, 2013, America technically went over the so-called “fiscal cliff.”
Within hours, the Senate voted 89-8 for a deal negotiated by Vice President Joe Biden that extends the Bush-era tax cuts — which had expired at midnight — on all incomes under $400,000 for single filers and under $450,000 for joint filers, while delaying the sequestration budget cuts for two months until just before America hits the debt limit.
The bill also includes a one-year extension of emergency unemployment insurance, and tax credits that help the poor and green energy development.
The Senate vote puts America out on the “fiscal ledge,” as the House still needs to approve the bill. House Speaker John Boehner is set to meet with his caucus Tuesday at 1 PM EST.
The speaker reportedly feels that he will have a hard time selling the bill. Rep. Tim Huelskamp (R-KS), one of the members who helped kill Boehner’s “Plan B” budget proposal, has already said he will oppose the bill.
Despite the fact that Republicans have allowed tax rates on the richest to rise without demanding cuts to Medicare or Social Security — establishing the most progressive tax code in generations — some liberals like Senator Tom Harkin (D-IA) are furious that the president is cedeing nearly $200 billion in revenue by raising the threshold of the top tax rate from $250,000, a number he campaigned and won on.
They also believe that the president has allowed Republicans to set up another “hostage situation” in just months.
“Republicans haven’t conceded anything on the debt ceiling,” former Secretary of Labor Robert Reich wrote, “so over the next two months — as the Treasury runs out of tricks to avoid a default — Republicans are likely to do exactly what they did before, which is to hold their votes on raising the debt ceiling hostage to major cuts in programs for the poor and in Medicare and Social Security.”
The president has claimed that he will not let the debt limit be held hostage again, but he hasn’t made it clear if he’d go as far as to invoke the 14th Amendment to avoid a standoff. In a statement Monday, he suggested that more revenue from the richest would have to be part of any deal to reform Medicare. His only leverage to secure a “balanced” deal by March are the defense cuts in the sequestration, which the GOP adamantly opposes — and the popularity of Medicare, which has an approval rating that even the Clintons might envy.