Michael Gerson: Easing pain, not problems

BY MICHAEL GERSON Published: January 5, 2013
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Defeat is usually an orphan. This one had many proud fathers.

In the “fiscal cliff” agreement, President Barack Obama secured his vanishingly narrow electoral mandate to raise tax rates on a sliver of the wealthiest. House Speaker John Boehner staved off a revolt within his caucus, secured passage of a version of his own “Plan B,” and lived to fight another day. The Senate earned its reputation as the slightly less dysfunctional portion of the federal government. Vice President Joe Biden stepped up to negotiating duties that the president apparently finds distasteful.

The left got the largest tax increase in a generation. Supply-siders, at the moment of greatest liberal leverage, got the permanent codification of about four-fifths of George W. Bush's tax cuts.

The only big political losers were tea party conservatives who had thought that 2010 was the beginning of the end of Obamaism. Even among the truest of believers, the reality now sinks in that a House majority does not govern the country.

There remains only one problem: The outcome of the fiscal cliff negotiations is almost entirely disconnected from the actual needs of the country. It is probably a drag on short-term economic growth. It is nearly irrelevant to the long-term fiscal challenge.

The fiscal cliff was an artificial crisis — produced at the confluence of Bush-era tax policy and the last round of kick-the-can fiscal policy — intended to rouse political seriousness on real problems. Obama and Boehner desired a grand bargain that includes entitlement cuts, revenue increases and tax reform. Twice now they have failed to secure it, leaving little hope they ever will.

The primary obstacle to agreement is larger than personality, and even larger than ideology. The most powerful force in American politics is not liberalism or conservatism; it is middle classism. In the economic mythology of both parties, the middle class exists only as the victim of unfair burdens. Consider the tax provisions of the fiscal cliff agreement. The very wealthy (families making more than $450,000 a year) will see a rate increase. The payroll tax will also rise, imposing a particularly regressive burden on the working poor (a $1,000 tax increase on a median income of $50,000). But the Alternative Minimum Tax will be permanently patched to help the middle class. It is a summary of public priorities — and, not coincidentally, a good description of where the most votes can be found.

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