NEVER SATISFIED

The news is full of statements of how the Republicans were taken by the President.  If they regret there were no big budget cuts, I can understand, but the tax situation seemed to fulfill all they wanted.  The $5 million estate tax was retained (but at 40% rather than 35% for excess over that) when the president wanted $3.5 million and 35%.  Everyone gets a tax cut on the first $400,000 ($450,000 for couples) of income with the wealthiest paying what they did in the nifty nineties at 39.6%.  Except for the wealthiest 1% of Americans, the Bush tax cuts were made permanent.  I thought the Republicans were angling to make the Bush tax cuts permanent for this for years.  Because Obama campaigned on making the level $200,000 (and $250,00 for couples), it would seem he lost this battle and Republicans won.

Individual tax extenders for individuals, business, and energy also add to the deficit.  This may be a draw as I believe both sides wanted at least parts of this.  Republicans may not have wanted to extend the unemployment insurance so count this as an Obama win.  The "doc fix" also was included and costs an amazing $25 billion over the 10 years.  I think this was also a draw.

Were Republicans really against restoring the 2% cut in payroll tax?  I would count this as a Republican win though there is a tendency to call it a tax increase.  Is no temporary tax cut temporary?  I thought Republicans feel that Social Security is in trouble.  Oh, they want to do away with it entirely and make it a 401-k.  Still I think Republicans won this.

Now there is a lot of brave talk about how much making the Bush tax cuts permanent will contribute to the deficit, but it turns out that all depends on how you start.  If you assume that the Bush tax cuts would be fully suspended, there would be close to $4 trillion added to the deficit, but if you count where the budget was in 2012, there is actually a decrease in the deficit by, I think, something like $760 billion.

Unfortunately the Sequester was kicked down the road, but it seems to me that both sides don't like it.  The Republicans don't like the cut in defense and the Democrats don't like the cuts in non-defense.  The Republicans can never seem to spend too much on defense, even though we spend more than the next 10 largest defense spending countries combined.  So both sides have oxen that they don't want gored.  That is why we have a deficit problem.

Over all, it seems to me that the Republicans won on the tax compromises.  They just never seem satisfied.

I don't see much happening to Medicare unless both sides agree to jump off a cliff together.  After all, Obama has paid politically for every modification he has proposed as things as "Death Panels" and "Rationing."  There is a lot of rationing in Medicare today.  For example, I recently found that Medicare does not cover shots for shingles.  As I know of five people who have had it (one losing and eye and another taking large doses of pain killers for a year), including my wife, I got it and paid the $225 myself.

Some figures in this post are from http://www.outsidethebeltway.com/congress-jumps-off-fiscal-cliff-pulls-parachute-rip-cord/?utm_source=twitterfeed&utm_medium=twitter&utm_campaign=Feed%3A+OTB+(Outside+The+Beltway+%7C+OTB)