Local Politics

'Cliff' deal produces more frustration than relief

Posted January 2, 2013

— Although Congress was able to pass legislation in a rare New Year's Day session that will prevent most Americans' income taxes from rising, politicians said Wednesday that they were frustrated and upset with the process.

The bill will boost the top 35 percent income tax rate to 39.6 percent for incomes exceeding $400,000 for individuals and $450,000 for couples while continuing decade-old income tax cuts for everyone else. In his re-election campaign last year, President Barack Obama had vowed to boost rates on earnings at lower levels – $200,000 for individuals and $250,000 for families.

The compromise hammered out by Vice President Joe Biden and Senate Minority Leader Mitch McConnell also raises taxes top earners pay on dividends, capital gains and inherited estates; permanently stops the alternative minimum tax from raising levies on millions of middle-income families; extends expiring jobless benefits; prevents cuts in Medicare reimbursements to doctors; and delays for two months billions in across-the-board cuts in defense and domestic programs slated for this year.

Thirteenth District Congressman Brad Miller was among 16 House Democrats to vote against the deal. He said it didn't address spending cuts and the federal debt ceiling, other than to delay the debate on those issues until March.

"This melodrama is going to go on. This self-created crisis is going to continue," Miller said. "Over the next two months, we’re going to see this again with even higher risk involved. If we don’t have the debt ceiling agreed to, we could default on our debt."

People on both sides of the debate lamented their failure to reach a significant deficit-cutting agreement.

"It's not uncommon to expect to see partisanship. It's going to rear its head time and again, as it did with this issue," 6th District Congressman Howard Coble said. "When you get a controversial piece of legislation as this one is and you have both sides not embracing it in toto, maybe we did the right thing."

Congressman Howard Coble Lack of comprehensive plan disappoints most on Capitol Hill

Coble and U.S. Sen. Richard Burr were the only Republican members of the North Carolina delegation to support the bill. Seventh District Congressman Mike McIntyre joined Miller as the only Democrats from the state to oppose it.

"I think the winners were 98 percent of American taxpayers," Coble said, adding that he decided at the last minute Tuesday night to vote for the bill.

Miller said taxpayers also are losers in the deal because it doesn't extend a cut to the payroll tax, meaning most Americans will see their paychecks shrink.

Economists told members of the North Carolina Chamber and the North Carolina Bankers Association on Wednesday that increases in payroll taxes might slow the state's economic recovery, but they still predicted slow but steady growth in the coming year.

Lew Ebert, president of the N.C. Chamber, said just having a deal in place should help the economy stabilize.

"To begin the year knowing what the effective tax rates are going to be for 2013 is an important degree of certainty, of predictability," Ebert said. "It's one less thing to factor into the economy, so I think, on balance, it's a positive for North Carolina business."

Gov.-elect Pat McCrory was less enthusiastic about the deal, saying Congress "has a lot of work to do."

"We need to come up with long-term solutions, and that's what I'm going to try to do for the state of North Carolina," McCrory said.

The looming debt ceiling deadline again threatens automatic spending cuts, as well as a default, credit downgrade or government shutdown.

"It can’t be ignored. If we ignore it, spending will continue and continue to be a primary problem," Coble said, adding that it's too early to discuss a government shutdown.

"The consequences to the economy will be much worse than anything that would have happened on Jan. 1 if Congress hadn’t acted," Miller said.


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  • gingerlynn Jan 4, 2013

    There aren't enough rich to make up the difference and there are going to be fewer and fewer.

  • stubbo19992 Jan 3, 2013

    They are only looking out for their best interest. But what about people making less than $200,000 or $450,000 a year? Where do we stand? Did you know people making under $250,000 a year is living in poverty? We work just as hard and just as long as the people making over $200,000 a year. What makes them any better? Why do people that makes less money than another have to pay more taxes at the end of the year? We don't need to ask the rich can they pay more we need to tell them they are going to pay more.

  • Bartmeister Jan 3, 2013

    One step at a time. Tax hikes were avoided. Now they need to work on cutting spending. George Will once said that with our system in place that no one administration could do in 4 or 8 years what another couldn't undo in 4 or 8. The guy driving this bus right now is lost, doesn't know where he is going and has some advisors giving him bad advice and directions. But there will be a new driver soon enough that can get the bus back on track and headed in the right direction. At least we avoided the tax hikes, which would have meant about $6K less income for me a year. Sights have to be set on repealing Obamacare and cut spending. The Donks have a dilema in front of them. Who's gonna run in 2016? Sure as hell can't out ole Joe "The Gaffer" Biden on the ticket, and Hillary just won't cut it.

  • flyguync Jan 2, 2013

    Watch what happens over the next couple of months. Our inept politicians will work on gun control, then at the last minute decide to tackle the real issues - we'll just be repeating this madness again.

  • oleguy Jan 2, 2013

    Hu Rah Red neck,, I agree, But a country boy can survive, on Beans. Rice,, and game,,, got ammo, a stash of cash, and a well, we can eat taters, and soy beans..
    Its gonna get ugly in the next few years

  • WakeCountyRedNeck Jan 2, 2013

    Obama is a dishonest politician as many others were and are. He will lie to anyone's face and if you believe him fully, then you are a sucker. The people who voted for this career politician are partly responsible for the decline of the Free Enterprise System and our massive debts. Obama will go down as the worst President in modern history. This is my opinion and I am entitled to it. If you disagree, you are entitled to do so.

  • Uhavenoclu Jan 2, 2013

    They were worried...They as in media..That the cliff was going to happen so they could write some dreadful stories of the doom and gloom.
    Now that a deal has been made they find something else to put the fear into the people.
    Gees......time to get rid of the technology poison and go back to the telegraph wire.

  • Stringbean Jan 2, 2013

    North Carolina's two senators, Republican Richard Burr and Democrat Kay Hagan, both voted for the bill. ... vote them out asap !

  • offthegrid7165 Jan 2, 2013

    Cliff deal included wind energy tax credit expected to cost $12.1 billion this year.goo.gl/xg7FL
    Sandy relief shouldn’t include fisheries in Alaska.
    Sandy relief shouldn’t include $5.3B to the Army Corps of Engineers (that’s more than their annual budget).
    Sandy relief shouldn’t include $56.8 million for charting the debris from last year’s Japanese tsunami.
    Sandy relief shouldn’t include $41 million for eight military bases including Guantanamo Bay.
    Sandy relief shouldn’t include $100 million for the federal Head Start day care program.
    Sandy relief shouldn’t include $188 million for new Amtrak lines (not repair, whole new lines). Sandy relief shouldn’t include $20 million for a nationwide “Water Resources Priorities Study”. Sandy relief shouldn’t include $4 million for the Kennedy Space Center. [Which is in Florida. Which was completely untouched or affected by Hurricane Sandy. Oh, btw, that Corps of Engineers Sandy funding? Obama Admin has it earmark

  • Danny22 Jan 2, 2013

    We will see a continuation of businesses who will close their doors. Obama's taxes on top of obama's obamacare taxes will too much burden to bear.