A controversial deal

No one likes it; maybe that's why it garnered bipartisan support in the Senate

karikatur für tribüne-perspektiven

karikatur für tribüne-perspektiven Crédito: authors

The bipartisan agreement in the Senate to avoid tax hikes and postpone the wave of budget cuts is a hard pill to swallow for Democrats and Republicans.

Nonetheless, the White House can take pride in having built a broad bipartisan consensus in the Senate to increase taxes without tying it to entitlement reforms or other budget cuts. That is the thorn in the paw of so many Republicans in the House of Representatives.

But to achieve the broad Republican support in the Senate, President Obama made the Bush era tax cuts permanent, except for taxpayers earning over $400,000, rather than the $250,000 he wanted. That concession reduces expected revenues, and will surely be felt in future negotiations.

At the same time, it is unfortunate that the Obama administration made the tax cuts permanent, while only getting a five-year extension on tax benefits such as the Earned Income Tax Credit (EITC) and the child tax credit that is a big help for less affluent workers.

The deal passed in the Senate by a 89-8 margin is disliked by all, hence its bipartisan support. However, once again, divisions among House Republicans threaten further obstruction.

It would be very detrimental to the already tattered Republican image if the ideologues decide to sink the ship, or sail it over the cliff, rather than accept the deal brokered in the Senate.

In any case, the deal resolves—for the moment—the automatic tax hikes, but fails to preempt further clashes between the White House and Republican lawmakers in the coming months. And that is a serious problem.

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republicans Senate

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