Hold the high-fives. President Obama’s apparent victory on the fiscal cliff is more like a late-game touchdown that is still being reviewed by replay officials.
For one thing, Obama’s decision to agree not to impose higher taxes on incomes between $250,000 and $400,000 will result in far less revenue than he needs to get. There were similar concessions on dividends and capital gains, and a huge giveaway on the estate tax, which will benefit only the richest of the rich. As a result, Obama’s deal will bring in just 40 percent of the planned revenue.
Secondly, it was troubling that Obama was willing to compromise despite his recent election mandate. During the negotiations, he reportedly offered up a new formula for calculating the Consumer Price Index, which would have resulted in a decrease in Social Security payments. This inclination to abandon his base and core principles of his party is not promising.
There are positives to the fiscal cliff deal worth noting, though.
Pressure from labor and other progressive groups helped save Obama from himself. This coalition advocated hard for a deal that did not trade away key parts of the social contract in cutting the deal. In the end, this worked. Unemployment compensation was extended for those in temporary need. The earned income tax cut for the working poor was bolstered. Medicare, Medicaid and Social Security also were not traded away for weak tax hikes. The package, to a small extent, addressed even alternative energy.
The real key, however, was decoupling the Bush-era tax cuts. The fact that the middle class and the wealthy were financially linked in the tax code never made sense anyway because of the nation’s huge wealth gap.
But no one should sleep. There are more battles waiting on even more important issues, including a battle again over spending cuts to the social contract.
Compromise is part of politics, but the social contract — that bedrock principle of a humane existence and democracy in the United States — must be preserved above all. Too many have fought for it for too long for a Democratic president to give it up now.
Brian Gilmore is a poet and public interest lawyer. He can be reached at email@example.com.
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