The World from Berlin - Today's American Politics a 'Tiresome Farce'.(Spiegel).Following a rancorous and protracted battle over fiscal policy, President Barack Obama announced late on Tuesday that the United States Congress had passed legislation to avoid the dreaded "fiscal cliff."
Had legislators in Washington failed to reach a deal, it would have meant big hikes in income taxes for the middle class and massive government spending cuts, likely sending the country into recession.
Some 24 hours after it was approved by the Senate, it was passed by the House of Representatives by a vote of 257 to 167, averting the automatic implementation of tax increases set to come into effect with the expiration of cuts enacted by former President George W. Bush. Voted for by a number of Republicans in the opposition, who were worried their stubborn refusals would be blamed for "fiscal cliff" fallout, it was seen as a victory for President Obama, who ran for re-election with calls for higher taxes for the wealthy.
"A central promise of my campaign for president was to change the tax code that was too skewed towards the wealthy at the expense of working middle-class Americans," Obama said in a short statement to the press. "Tonight we've done that."
Once Obama signs the bill, the country will no longer face the some $500 billion (€377 billion) in increased taxes and $109 billion in defense and domestic spending cuts that would have taken hold. Instead, it ensures that the existing tax cuts for most people remain in place, while the tax rate for incomes above $400,000 for individuals and $450,000 for couples will increase from a current 35 percent to 39.6 percent. Taxes will also increase for the wealthy on dividends, capital gains and inheritances.
Still, neither side of the aisle was particularly pleased with the deal, which is seen as a mere postponement of further budgetary negotiations in the coming two months after the new Congress convenes. While the Republicans were forced to accept higher income taxes for the wealthy and fewer spending cuts than they had demanded, the Democrats had hoped to increase taxes starting at an income level of $250,000.
On Wednesday, both Asian and European markets seemed to react positively to news of the deal, which lowered the risk of the world's largest economy falling into recession.
German editorialists were a bit less optimistic, however, writing that the political games in Washington are harming the country.
The conservative Frankfurter Allgemeine Zeitung writes:
"The annual ritual of expiring deadlines and compromises in the middle of the night has long since become a tiresome farce that no one is interested in seeing any longer. ... The political theater is damaging the country both domestically and abroad. Querulousness and anger are growing among the people because the national leadership in Washington isn't in a position to solve the country's biggest problems: the mountain of debt, the budget deficit, unemployment, the education crisis, aging infrastructure and the explosion of costs in the health care and pension systems."
"This political paralysis could stifle economic recovery. The national debt, which now exceeds the annual economic output of the country, also threatens national security. President Obama's first term was characterized by procrastination and retreat when it came to foreign and security policy -- from Iraq to Afghanistan to Libya and Syria. And without Washington's leadership, what is to become of the 'peace process' in the Middle East and the Arab Spring? Beyond the cliff the world faces more adversity than a world power taking a breather from geopolitics."Read the full story here.
Some 24 hours after it was approved by the Senate, it was passed by the House of Representatives by a vote of 257 to 167, averting the automatic implementation of tax increases set to come into effect with the expiration of cuts enacted by former President George W. Bush. Voted for by a number of Republicans in the opposition, who were worried their stubborn refusals would be blamed for "fiscal cliff" fallout, it was seen as a victory for President Obama, who ran for re-election with calls for higher taxes for the wealthy.
"A central promise of my campaign for president was to change the tax code that was too skewed towards the wealthy at the expense of working middle-class Americans," Obama said in a short statement to the press. "Tonight we've done that."
Once Obama signs the bill, the country will no longer face the some $500 billion (€377 billion) in increased taxes and $109 billion in defense and domestic spending cuts that would have taken hold. Instead, it ensures that the existing tax cuts for most people remain in place, while the tax rate for incomes above $400,000 for individuals and $450,000 for couples will increase from a current 35 percent to 39.6 percent. Taxes will also increase for the wealthy on dividends, capital gains and inheritances.
Still, neither side of the aisle was particularly pleased with the deal, which is seen as a mere postponement of further budgetary negotiations in the coming two months after the new Congress convenes. While the Republicans were forced to accept higher income taxes for the wealthy and fewer spending cuts than they had demanded, the Democrats had hoped to increase taxes starting at an income level of $250,000.
On Wednesday, both Asian and European markets seemed to react positively to news of the deal, which lowered the risk of the world's largest economy falling into recession.
German editorialists were a bit less optimistic, however, writing that the political games in Washington are harming the country.
The conservative Frankfurter Allgemeine Zeitung writes:
"The annual ritual of expiring deadlines and compromises in the middle of the night has long since become a tiresome farce that no one is interested in seeing any longer. ... The political theater is damaging the country both domestically and abroad. Querulousness and anger are growing among the people because the national leadership in Washington isn't in a position to solve the country's biggest problems: the mountain of debt, the budget deficit, unemployment, the education crisis, aging infrastructure and the explosion of costs in the health care and pension systems."
"This political paralysis could stifle economic recovery. The national debt, which now exceeds the annual economic output of the country, also threatens national security. President Obama's first term was characterized by procrastination and retreat when it came to foreign and security policy -- from Iraq to Afghanistan to Libya and Syria. And without Washington's leadership, what is to become of the 'peace process' in the Middle East and the Arab Spring? Beyond the cliff the world faces more adversity than a world power taking a breather from geopolitics."Read the full story here.
No comments:
Post a Comment