The Budget Battles Ahead

Two months after the president handily won a second term and the Democrats increased their numbers in both the House and Senate, GOP congressional leaders were in no position to negotiate a good “fiscal cliff” resolution. So it’s not at all surprising that what emerged from the Biden–McConnell negotiations has satisfied almost no one, and certainly not many conservatives.

That being said, the January 1 tax deal needs to be put into proper perspective. The media are fixated on what is being called an Obama victory: He forced the GOP into retreat on the top income-tax rate. Yes, that was certainly a win for the president, something that was all but inevitable after November 6. But, despite what the president (and his apologists in the media) say, the top individual income-tax rate is not the sum and substance of the Bush-era tax policy. The benefits of the tax cuts enacted in 2001 and 2003 went overwhelmingly to the American middle class, not high-income households, as the tables summarizing the deal from the Joint Tax Committee and the Congressional Budget Office have made clear. Compared with what would have happened if the Bush-era tax schedule had been allowed to expire entirely, the deal is a net $3.6 trillion ten-year tax cut.

Read more: http://www.nationalreview.com/articles/337025/budget-battles-ahead-james-c-capretta