Some on the left are already griping that the White House gave up too much by raising the income limit on the Bush tax cuts to $400,000-450,000, but here is what the president got in return for his minor concession:
– A permanent rise in tax rates to the Clinton era levels for all individuals making over $400,000 a year.
– A return to the Clinton era rates on capital gains.
– The Estate Tax will be set at 40% for those at $400,000 threshold with a $5 million exemption.
– A 5 year extension of the Earned Income Tax Credit, the Child Tax Credit, and the American Opportunity Tax Credit for low income Americans.
– All Obama small business tax breaks extended for another year.
– A full year extension of unemployment benefits.
– A nine month Farm Bill.
– A permanent patch for the Alternative Minimum tax.
For what was supposed to be a short term deal, the president got a lot of long term changes. Those on the left who feel “betrayed” because Obama moved off the $250,000 number, and believe that the president should have done nothing need to consider what the fiscal cliff cuts would have meant to some important social programs.
If the country would have gone off the cliff, Medicare would have faced an $11 billion cut. Falling off the cliff could have killed the entire Meals on Wheels program in many parts of the country. Programs ranging from Head Start to AIDS drug assistance programs, and Veterans aid and training would have all been slashed if some on the left would have gotten their way.
The move from $250,000 to $400,000/$450,000 was more of face saving gesture for Republicans. In reality, the GOP got their clock cleaned on this one. President Obama got several concessions out of Republicans that they swore they would never do. (Permanently raise taxes on the wealthy, and extend unemployment benefits for a year to name just two things.)
Obama campaigned on raising taxes on the wealthy, and that is exactly what he has done. Anyone who feels like the president caved is not looking at the full picture. The president gave up a little, and got a whole lot in return.
It has been almost 20 years since this country raised taxes on the wealthy. President Obama took another step towards making history. Who knows what the Republicans in House will do, and we learned before Christmas to never trust Boehner and Cantor when they say they have the votes. Things might fall apart in the House later today, but the president and vice president got a very good deal for the country through the Senate.
Even if some on the left refuse to admit it, Republicans know they got owned on this one.