Winners and Losers in the Fiscal-Cliff Deal
Clearly, Obama won. Guess who lost in the deal on taxes and spending cuts?
(The Root) -- Update: Tuesday, Jan. 1, 11:05 p.m. EST: After hours of wrangling, the House passed the Senate's fiscal-cliff bill, averting a host of automatic tax increases, loss of unemployment benefits and more.
While most Americans were New Year's Eve party hopping, the president, the vice president, members of the U.S. Senate and their aides were ringing in 2013 in a slightly less festive fashion. Still, it's very likely they finished off the night with a champagne toast or two.
The reason? The president and GOP leaders finally reached a deal to protect America from the looming fiscal cliff of automatic tax hikes and spending cuts that would have affected most Americans at the dawn of the New Year.
The Senate overwhelmingly passed the deal by a vote of 89 to 8 in the early hours of 2013. "While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country, and the House should pass it without delay," said President Obama in a statement this morning. The House convened at noon. As the nation waits to find out what action House members will take on the bill, below is a look at the winners and losers from the fiscal-cliff deal, and the debate that led to it so far.
The American people: To read the recent nonstop fiscal-cliff coverage, it was easy to see it as a battle of wills and egos among the president, House Speaker John Boehner and a few other key players. Often overshadowed were the story's most important players: the American people, who would face real loss and suffering had a deal not been reached.
Among those most directly and immediately affected would have been the more than 2 million Americans whose unemployment benefits were set to expire. This deal is not only a welcome, belated Christmas gift for many of them but in some cases will also serve as the only lifeline keeping them from beginning 2013 in poverty.
President Obama: Polls have consistently shown that Americans blamed the GOP for the fiscal-cliff standoff much more than they blamed the president. His fiery appearance on Meet the Press this past weekend, and a tough-talking press conference featuring middle-class families, made it clear that he knew he was winning the public relations battle. Even a high-profile Republican said so.
Whether or not the nation had gone over the cliff, frankly, the president would have won. But he will likely now enjoy the added benefits of any credit Americans are willing to give to leaders for finally passing a deal.
The upper middle class: Though he is already facing criticism from progressives that he compromised on tax hikes for the wealthy, President Obama is sure to have earned a round of cheers, from many self-identified middle-class Americans living in high-cost locales. One of the uncomfortable truths that had hindered negotiations in the tax-rate debate is that raising a family on $250,000 goes a lot further in Fargo, N.D., where median rent is $600 a month, than it does in New York City, where the median rent is $3,200 and the average home value is nearly $1 million.
So there were plenty of Americans in places like New York who disputed the notion that $250,000 made them wealthy. Thanks to the fiscal-cliff deal, those Americans will get a reprieve and taxes will instead be raised on Americans making more than $400,000 a year (or $450,000 for a household).
Heirs: Though people may quibble over which number between $249,999 and $400,000 officially equals "wealthy," most Americans agree that $15 million is pretty firmly in the neighborhood of wealth. According to the Washington Post, "the White House made a major concession on the estate tax, agreeing to terms that would permit estates worth as much as $15 million to escape taxation by the end of the decade, Democrats said." So along with those making between $250,000 and $400,000, those anticipating inheriting big estates anytime soon are probably celebrating today, too (despite how morbid that may sound).
The Tea Party: Despite the best efforts of the most extreme, anti-tax zealots within the GOP, there were concessions made on tax rates for the wealthy. More important, when push came to shove, Speaker Boehner was not ousted; nor is he likely to be. He and Senate Minority Leader Mitch McConnell were able to get a deal -- one with which the most diehard conservatives are unlikely to be pleased.
Progressives: Much like their conservative counterparts in the Tea Party who believe that the fiscal-cliff deal's tax hikes go too far, plenty of progressives believe that they don't go far enough and have expressed displeasure with the president for allegedly caving. But in the end, it doesn't really matter. Plenty of high-profile Democrats expressed support for the deal, and don't care whether every single activist and elected official is happy with the deal -- just that there is a deal.
Sen. Mitch McConnell: The general consensus is that he and his party got -- for lack of a better term -- the short end of the stick on this deal. Besides the concession on the estate tax, there is very little else in the fiscal-cliff deal that McConnell can claim as a legitimate victory for the GOP. Hence the vocal criticism by some members of his party.