By Matthew Rothschild on Jan 6, 2013
Pres. Obama managed to hang-glide over the fiscal cliff, and was fortunate that a progressive wind blew him back to safety.
Because of pressure from his base, Obama resisted his own temptation to cut back on Social Security.
And because of pressure from his base, he succeeded in raising taxes on the rich.
And because of pressure from his base, he extended much-needed programs that help the needy, like unemployment insurance and the earned income tax credit.
It wasn’t a perfect deal.
As Robert Reich and others have pointed out, it left the President and the country in a potential hostage-taking situation in just a matter of months, as it did nothing to increase the debt ceiling.
But I was frankly surprised that Obama didn’t give more ground, since he had signaled a willingness to do so.
I wasn’t surprised, though, that the super-rich got a big part of what they really wanted: which is a huge break on the estate tax.
If there hadn’t been any deal, the wealthiest Americans upon their deaths would have been able to give their heirs only $1 million tax-free. Now they’ll be able to give their heirs $5 million tax free, as they were able to last year (though the rate on anything above that will rise from 35 percent to 40 percent).
That’s one Bush tax cut for the super-rich that survived virtually intact.
And that’s the one they cared about most.
But on balance, the agreement was a net plus.
It restored some progressivity to the income tax code, both by lifting the marginal income rate on those above $400,000 and by increasing the rate on dividends and capital gains for that same group.
It helped out the unemployed and the working poor.
It at least postponed sharp spending cuts, which would have put growth on the skids.
And it contained no cuts in essential programs like Social Security, Medicare, and Medicaid.
So I agree with Sen. Bernie Sanders. This deal was “a small step forward.”
And Sanders and other progressive leaders, who pressured Obama to hold his ground, deserve our thanks.
If you liked this story by Matthew Rothschild, the editor of The Progressive magazine, check out his story “Farewell to Four Progressives Who Died in 2012."
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