Opinion

GOP Abandons Good Policy in Fiscal Cliff Deal

By Jedediah Bila

By now you’ve heard that the fiscal cliff deal passed. Does it address the real fiscal cliff we’re standing on, also known as our $16.3 T debt? Not in the least. Does it dismantle the divisive class-warfare tactics that are destroying our country? No. In fact, it supports Obama’s “fair share” campaign promise to hike taxes on “the rich” and makes some Republicans–I’m looking at you, Paul Ryan–look awfully silly for spending months campaigning against class warfare only to endorse it in the name of compromise. Grover Norquist even embarrassed himself by labeling the deal a tax-cutter because the Bush tax cuts had expired at midnight the night before.

You know, Republicans, if you spent half as much time marketing good policy as you do bending over backwards to please your ideological opponents, we might actually have a deal worth talking about.

In addition to the basics, there are some other interesting facts to note about this deal.

ABC News reports:

But it also includes these:

  • $430 million for Hollywood through “special expensing rules” to encourage TV and film production in the United States.  Producers can expense up to $15 million of costs for their projects.
  • $331 million for railroads by allowing short-line and regional operators to claim a tax credit up to 50 percent of the cost to maintain tracks that they own or lease.
  • $222 million for Puerto Rico and the Virgin Islands through returned excise taxes collected by the federal government on rum produced in the islands and imported to the mainland.
  • $70 million for NASCAR by extending a “7-year cost recovery period for certain motorsports racing track facilities.”
  • $59 million for algae growers through tax credits to encourage production of “cellulosic biofuel” at up to $1.01 per gallon.
  • $4 million for electric motorcycle makers by expanding an existing green-energy tax credit for buyers of plug-in vehicles to include electric motorbikes.

*Note the price tags above reflect estimated forgone tax revenue if current credits – which have been due to expire – are extended for one year as included in the Senate bill, per Joint Committee on Taxation.

Jim Pethokoukis writes:

What will Americans pay in taxes this year vs. last year in light of the fiscal cliff deal? Well, let’s run the numbers (with some help from JPMorgan):

– Payroll tax hike: $125 billion

– Income tax hike and the phaseout of exemptions: $35-50 billion

– Investment tax hike: $5 billion

– PPACA healthcare taxes: $38 billion

So that works out to roughly $220 billion, or 1.2% of GDP. It’s a deal that, as The Washington Post puts it, ”takes money out of the hands of many Americans, sucking it out of the economy and slowing economic activity.”

Obama made it clear last night that he has no interest in negotiating when it comes to the debt ceiling. He has also made it clear that this is the start of his tax-hike demands, not the end.

To those who believe that current GOP leadership–you know, the folks who pushed this horrific deal–will fight tooth and nail to oppose the debt ceiling hike and dig in their heels for real spending cuts (no baseline budgeting nonsense), I have a bridge to sell you. It sits above youth-restoring water and is inhabited by wish-granting unicorns.

Also, what happens when Obama asks for round two of tax hikes on the rich? Will the GOP suddenly decide they oppose class warfare again after backing it in this deal? Do tell me how that makes sense.

I understand the value of cooperation, but when you compromise all of your key principles and fight for none of the things you’ve claimed to care about, it’s safe to say you’ve lost.

Follow Jedediah on Twitter @JedediahBila

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Jeffey A Seibold

I think the tax’s should have been raised for everyone!Maybe then we as a nation can start paying down this debt!Also we should consider having a National sales tax?

Hans

Love your stuff, Jedediah. I agree with you 100%. I am so angry with the lies and deceit that comes out of the politicians mouths knowing they are immune to the laws they hold us to. The question I have is what are we going to do about it that will REALLY stop them? Armed conflict like they do in every other country of the world? That doesn’t seem like U.S. anymore since the (un)Civil War. What a sad, sad situation it was that such a scant percentage of Republicans voted in the last election. Had it been mandatory for every citizen to vote, would that have changed things? Will we be forced into anarchy to defend our principals and way of life as we knew it? I’m afraid these people can’t be stopped as long as there are lazy good people; too lazy to get off their fannies, turn… Read more »

Terry T

The Republicans got maneuvered into a corner where a “yes” vote would raise taxes on people with incomes over $400,000 and a “no” vote would raise taxes on everybody. There was no choice to not raise taxes. They also allowed Obama to bring the game down to the last seconds – giving them few options.
I don’t blame any of the conservatives for their votes, yes or no. I do chastise those who allowed Obama to control the “rules of the game”.
We must understand that we are not dealing with reasonable people who want to improve the economy. Obama is out to destroy the economy and the country. There is no compromise between big government socialism and a free market economy. It is time to dig in and take a stand.

jim

Can someone explain to me how a reduction in payroll deductions equates to a reduction in taxes at the end of the tax year. Seems to me that if they don’t get it by payroll deduction they will get it on tax day. So, in my opinion, payroll tax deductions are nothing more than a hollow victory shouted from the rooftops by republican closet progressives that function as enablers for the democratic progressives that are destroying this country. Overt and covert progressives are killing us. Vote conservative or die!

Clyde Mikkola

They should take all the politicians, stuff them in that can and kick it off the “fiscal cliff”. If all they want is money, they get their full pay if they retire after one term; if it’s power, how much power do you have if you compromise your principles? If they really believe in these America wrecking concepts, or if they are using their positions to profit themselves…they really should be in the “can”.

Arthur Enolds

Jedediah:

Why don’t you comment more about getting more women to support the Republican agenda? It was the female vote that lost us this past election. It is remarkably striking how all the female conservative commentators are all knock-outs. Obviously the minority. If all the homely gals continue to vote Democrat, we’ll never win!!!
PS My wife is a Republican. Anyone want to guess what she looks like???

Arthur Enolds

Obama says he will not negotiatiate the debt celiling. Boehner should reply, “Good. We won’t either. Let the sequester occur. Spending cuts or else!”. And he should say it loud and clear in the national press. This time, the Republicans should stand firm and threaten to let the automatic spending cuts happen as the Democrats did on the fiscal cliff. The leverage is on our side this time. It’s a winning action plan. Anyone want to bet on it happening??

John Oliff

Your assuming the republicans have/had a good policy

Florida Jim

I love your work Jedediah and your name. Let us know when and where you appear on television I do not believe I have seen you.

Ron

GOP must hold to its principles in the upcoming fiscal cliff negoitations(debt ceiling) and outmanuver Obama in his lies to the public. Thanks Jedediah.

PaulE

Here’s what will happen in the debt ceiling talks: 1) The House Republicans will make a lot of noise above “getting our spending under control”. 2) The Republicans will parade the usual members before the public to make the usual “what we should do to fix our out of control debt problem”, all the while offering no specifics on what they would vote to cut. Lots of words, but not actually saying anything. No real unified strategy developed beforehand. Just each member shooting from the hip, trying to make himself or herself look good before the cameras. 3) Obama will sit back, as he did in the fiscal cliff talks, and watch the Republicans fight amongst themselves. He will of course schedule a few news conferences to deliver the same scare speech over and over again to the American people about the dangers of not increasing the debt ceiling to… Read more »

Charles Colburn

I live in Kansas and have notified our Senate & House members that any vote for debt ceiling increase is not acceptable and I will do my best to vote them out. If they vote for it I just as well vote for a Democrat.

Charlie

Great articial Jedediah.
I am a retired police officer, spent 35yrs in law enforcement, and at no point in my life have I ever felt so disconnected from my party,GOP, and government then now. My wife and I have joined our local Tea Party in the hopes we can find and support true Constitutional conservatives. I thank you again for keeping us informed. God Bless you and our country.

Joanne

Steve, Romney did better because MANY PEOPLE did what I did, pulled the lever for Romney as a vote AGAINST OBAMA. That is the only way I have been able to vote for years now, AGAINST NOT FOR and obama scared so many people that that is what many did in the last election. That was my last vote as a republican and I have notified them of this.

Michael Duncan

The Scripture says, “Wisdom is proved right by her actions.” Well, I must admit that I am a bit alarmed at how unwise many of our elected officials (from the White House down) turned out to be. Fiscal responsiblity has gone the way of the dinosaur. They may not have driven over the fiscal cliff, but they’ve just blown up the car!

Len Bliss

The next step is clear!
Vote NO to any increase in the debt ceiling. Allow the tax cuts via the sequestrations.
It was decided last year following the Super Committee decision (when Obama refused to
allow the consensus to be allowed ) that Obama will veto any and all cuts.
Vote NO to any other tax hikes!
Bring home our troops using Congress’ power ( and only Congress ) to declare war!
Close 10% of our overseas bases each year till it reaches 10% and require action by Congress
to return to higher levels AFTER that time.
Vote NO to any bill authorizing any foreign aid to any country or organization that is not on
the “friendly” list.
Vote YES to end the Fed.
Vote YES to going back on the gold standard.
There, that is a good start!

Len Bliss

Ron Paul for Speaker of the House!.
We cannot trust the standing options to keep their word. All the usual
suspects are suspect. At least Dr Paul has been consistent for 36 years.
We never faulted to see him repeat the same things he stands for in the last
4 decades.
Let us not do what Obama says is good for Americans; let us follow
Ron Paul to better freedom, better liberty, and the restoration of what
we know to be best for America.
All these numbers are interesting, but what is the point of those voting on
a bill that was not a compromise bill, but billed as one by Obama?
His speech today made it seem that the bill was non-partisan and the
Republicans will be blamed if it fails to perform well.
Let us save America!
Vote Ron Paul for Speaker!

Michael Lepp

Now that they have secured tax cuts for the middle class and abandoned the ridiculous ” tax cuts for the rich” stance, the GOP can hold Democrats on spending !!!

Jim Rotramel

Are you sure they’re bending over backwards? ;-)

Steve

This is my second attempt to post this, so forgive me if it’s a duplicate.

I’m not sure what you expected the GOP to do. You yourself tweeted more than once that the Republicans would have been crucified if we’d gone over the fiscal cliff. So, given that John Boehner couldn’t use the threat of going over the cliff as leverage, what should his negotiation strategy have been? Obama wasn’t going to give him anything.

At least with this deal, the Democrats must now admit that Bush tax cuts for 98% of Americans were valid/valuable. People like Howard Dean are livid about this deal, which means that it can’t be all bad.

You and many of my fellow conservatives need to remember that we need to win a few more elections before we can start negotiating budgets we like better.