Debra J. Saunders

It tells you something about the news media that before the House vote Tuesday, talking heads were warning Americans that unless the GOP House voted for a bill to stall our going over the fiscal cliff, taxes would go up on 98 percent of Americans. President Barack Obama's big talking point matched the cable news narrative. Breaking news: Republicans were ready to raise taxes on the middle class to shield top earners from a tax increase.

Now that the cliffhanger deal is done, the old narrative has prompted many reports to bury the new lead: This package, which raises income taxes on households earning more than $450,000, also means that 77 percent of American households will be paying higher taxes, according to the Tax Policy Center.

An end to a two-year temporary payroll tax holiday represents a rise of 2 percentage points in the Social Security tax for folks who earn paychecks. (That's a $1,000 tax increase for the median family.)

The president's claim that he was trying to "protect our middle class" from Republican tax increases was -- how to say it? -- a tad hollow.

Don't get me wrong. I think Washington was right to end the temporary payroll tax holiday. I thought the "holiday" was a bad idea when it passed in 2010. It didn't stimulate the economy. It threatened to undermine public support for the Social Security system. And it added some $125 billion annually to the deficit.

That is, the 2 percent payroll tax holiday was completely irresponsible -- which is why I am happily shocked that the White House, Democratic Senate and Republican House let it sunset. It was the right thing to do, and Washington did it anyway. Oddly, it probably helped that this tax increase garnered relatively scant press coverage before the vote.

What's to like about the deal? Republicans would do well to adopt the attitude of Rep. Dave Camp, R-Mich., who told The New York Times that after more than a decade of trashing the Bush tax cuts, "Democrats are finally joining Republicans in making them permanent."

What's not to like? Given the shaky recovery, this is a bad time to raise taxes. But given that the Bush tax cuts were set to expire Jan. 1, this deal was better than nothing.

What's not to like, Part 2? For all of Obama's pre-election rhetoric in favor of a "balanced approach" to fixing Washington's budget woes, this cliff deal is all tax increases, no net spending cuts. Even the ethanol subsidy survived. There is no balance.


Debra J. Saunders


 
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