In a late night compromise the Congress voted to raise taxes on those making more that $400,00 (individual), $450,000 (household) but failed to cut spending by postponing for two months the $110 billion across-the-board cuts known as sequestration.
The vote in the House was 257 for, 161 against with 172 Democrats voting aye but only 85 Republicans.
Had it been up to the Oregon congressional delegation the nation would still be off the fiscal cliff. Three of the five representatives, Defazio (D), Walden (R) and Bloomenauer (D), voted against the compromise, saying it just kicks the can down the road. Bonamici (D) and Walden (R) voted for it.
In a speech Wednesday morning President Obama praised the Congress for their hard work in attaining the compromise and averting the immediate consequences of the fiscal cliff. But he warned that the country's fiscal problems remain unsolved.
According to McClatchy News, “Reluctant House Republicans, concerned the plan had too few spending cuts and not enough meaningful debt reduction, had threatened to stymie the plan. Their fury was fueled further by a new report from the nonpartisan Congressional Budget Office that the package would add $3.97 trillion to deficits over the next decade.”
The bill as passed will raise income taxes on the new top tax bracket from 35% to 39.6% and capital gains from 15% to 20%. In addition those earning over $200,000/$250,000 will see a 3.8% health care tax increase in 2013.
Fox News, citing a Tax Policy Center (TPC) analysis, reports that taxes on a household making over $1 million will increase as much as $170,341.
Those making under $200,000/$250,000 will see a modest tax hike due to the expiration of the payroll tax holiday. Households making between $40,000 and $50,000 will face an average tax increase of $579; households making between $50,000 and $75,000 will face an average hike of $822, according to that TPC analysis.
Fox News sums up, “The deal passed Tuesday night only tees up a new round of congressional battles in a matter of weeks over the debt ceiling and automatic spending cuts that would largely hit the Pentagon.”
In view of the government's inability to come to grips with its fiscal problems one can only wonder what it will take to jar it into a confrontation with reality. Its actions so far have left the nation in the throes of uncertainty about the future. It seems the best we can do is muddle through.