As the clock counted down to midnight on New Year’s Eve, congress and the Senate rushed to come to an agreement to avoid the feared fiscal cliff that was months in the making. The deal was signed at about 2 a.m. that morning.
However, not everyone is satisfied with the new deal. Many congressmen and women are dissatisfied because it really isn’t the end to this crisis at all. There was no clear winner because the deal was filled with compromise, which may not necessarily be a bad thing.
Had the deal not been resolved the taxes would have increased, and military and domestic spending would have decreased by $110 billion, but the deal delayed this until March 27.
The fiscal cliff was originally supposed to be a way for Washington D.C. to confront its long term debt problems. Essentially, the deal was agreed to in order to give another two months to resolve the big issues.
It extended the deadline for the Bush-era tax cuts for Americans.
Because the Senate did not address the expiration of payroll tax cuts, most Americans’ paychecks are likely to shrink. Americans making $30,000 per year will take home $50 less per month.
Taxes will also rise on individuals making at least $400,000 per year and households that have incomes of at least $450,000 per year.
Democrats are unhappy because vital federal programs will stop.
The end to government spending would also hurt businesses and damage the nation’s economic recovery.
“I voted against the fiscal cliff deal because it left too much uncertainty for government programs, lacked a realistic path toward deficit reduction and fell short in providing necessary revenues to effectively move toward fiscal responsibility,” said Democratic Congressman Adam Smith.
Others were happy to see some progress made.
“This compromise is a first step, and we must take a bigger second step that puts an end to out-of-control federal spending,” said Republican Congresswoman Herrera Beautler.
It seems that the deal was rushed. Consequently, it did very little to reduce the nation’s budget deficit and will hinder growth.
There was a lot of tension and disagreement between congress and the Senate in the weeks leading up to the deal, and a lot of those feelings still remain.
The separation between the leaders of the two parties doesn’t bode well for the conflicts that lay ahead.
America is far from being out of the woods.
