Deficit ‘fiscal cliff’ bill actually spends $330 billion more

The “fiscal cliff” deal that was designed to save money actually includes $330.3 billion in new spending over the next decade, according to the official estimate the Congressional Budget Office released Tuesday afternoon.

CBO said the bill contains about $25.1 billion in new cuts, but those are swamped by the new spending on extended unemployment benefits for the long-term jobless and other new refundable tax credits that President Obama fought for.

Of those cuts, only $2 billion are scheduled to take effect in 2013.

And CBO also warned that some of the cuts Congress is counting are from programs on which CBO never expected the money to be spent anyway — such as cuts to the Consumer Operated and Oriented Plan, which was part of Mr. Obama’s health care law.

All told, the bill deepens the deficit by nearly $4 trillion over the next decade, when the new tax cuts and spending are combined.

Read more here.

Fiscal Cliff Deal: $1 in Spending Cuts for Every $41 in Tax Increases

According to the Congressional Budget Office, the last-minute fiscal cliff deal reached by congressional leaders and President Barack Obama cuts only $15 billion in spending while increasing tax revenues by $620 billion—a 41:1 ratio of tax increases to spending cuts.

When Presidents Ronald Reagan and George H.W. Bush increased taxes in return for spending cuts—cuts that never ultimately came—they did so at ratios of 1:3 and 1:2.

“In 1982, President Reagan was promised $3 in spending cuts for every $1 in tax hikes,” Americans for Tax Reform says of those two incidents. “The tax hikes went through, but the spending cuts did not materialize. President Reagan later said that signing onto this deal was the biggest mistake of his presidency.

“In 1990, President George H.W. Bush agreed to $2 in spending cuts for every $1 in tax hikes. The tax hikes went through, and we are still paying them today. Not a single penny of the promised spending cuts actually happened.”

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U.S. Senate Passes ‘Fiscal Cliff’ Bill, It’s Now up to The House to Pass or Reject The Deal

With just hours to go before the Jan 1. deadline, the White House and Senate Republicans have reportedly reached a deal to avert the so-called “fiscal cliff.”

Republican leadership has already “okay’d” the deal and Rep. Nancy Pelosi (D-Calif.) and Sen. Harry Reid (D-Nev.) have allegedly signed off on it.

The deal would extend Bush-era tax cuts for family incomes below $450,000, according to the Associated Press.

Read more here.

“Democrats Are Like Bank Robbers” Who Want to Raise Taxes on Everyone

Obama Gives Raise to Biden, Congress as Fiscal Cliff Looms

Imagine you are working for a company that is going bankrupt, but everyone you work with and your bosses are getting pay raises. Seem absurd?

Not if you work for the failing federal government, because President Obama has decreed that Vice President Biden, members of Congress, and most federal workers are getting raises for 2013.

As the U.S. government is losing its luster on the bond market and as the fiscal cliff looms, President Obama issued an executive order to give everyone raises.

Obama has generously bestowed a $6,379 per year raise on Grampa Joe; he’s given members of the House a $900 increase; and he’s doled out a .5 percent pay increase to federal workers.

Jeryl Bier does the math on the raises federal workers will get.

RATES OF BASIC PAY FOR THE EXECUTIVE SCHEDULE 2012
Level I . . . . . . . . . . . . . . . . . . . . . . . . . . $199,700
Level II . . . . . . . . . . . . . . . . . . . . . . . . . . 179,700
Level III. . . . . . . . . . . . . . . . . . . . . . . . . . 165,300
Level IV . . . . . . . . . . . . . . . . . . . . . . . . . . 155,500
Level V . . . . . . . . . . . . . . . . . . . . . . . . . . . 145,700

Here are the rates in the just-signed Executive Order:

RATES OF BASIC PAY FOR THE EXECUTIVE SCHEDULE 2013
Level I . . . . . . . . . . . . . . . . . . . . . . . . . . $200,700
Level II . . . . . . . . . . . . . . . . . . . . . . . . . . 180,600
Level III. . . . . . . . . . . . . . . . . . . . . . . . . . 166,100
Level IV . . . . . . . . . . . . . . . . . . . . . . . . . .156,300
Level V . . . . . . . . . . . . . . . . . . . . . . . . . . .146,400

Read more here.

The Largest Tax Increase Since World War II

Fully going over the fiscal cliff would be the largest tax increase since World War II, according to the Tax Foundation and will result in the highest top tax rates in decades. They’ve composed a chart tracking marginal rates since 1954. Take a look at the end, and the size of the jump projected in tax rates:

Read more here.