Merely Deferred

The budget deal brokered by the U.S. Senate is only a temporary solution. In two months the parties will need to try to come to terms again.

No U.S. Congress has ever had a worse reputation than this one: At the end of 2012 only five percent of Americans believe that their representatives are doing a competent job. These were the findings of the conservative Rasmussen Reports.

The distrust of elected politicians is justified. Both chambers of Congress have been conspicuous in previous years for their fundamentalism, inability to compromise and frequent total mutual blockades—especially in regard to taxes and the budget. This time was no different when it came to the matter of the fiscal cliff.

It looks like the deal adopted by the Senate on the eve of Jan. 1 will be a deferral, not a solution. In just two months, the U.S. government’s budget will have arrived at its debt limit again and new budget debates and budget votes will have to take place. Many contentious questions will be raised again.

At the same time, the waiver on general spending cuts will expire, which is provided for in the late night deal. For the representatives that will be an opportunity to continue the drama.

Because the New Year’s Eve deal is only provisional, the long-term winners and losers have not yet been determined. At first glance, it appears that Vice President Joe Biden and President Barack Obama have scored a success. Their result, however, has turned out to be much more modest than anticipated—and that in spite of the only weeks-old, decisive election victory and an election campaign in which raising taxes for top earners was one of the few clear Democratic proposals.

Symbolic Tax Increase

Now, raising taxes of just over four percent for a decidedly smaller group of top earners has a primarily symbolic character. At the same time, the White House has deferred the demands of the Democratic grass roots and unions to the next round of budget negotiations and has thereby provided the Republicans with an additional target.

Richard Trumka, head of the AFL-CIO said on Twitter that this, “sets the stage for more hostage-taking.” Another left-wing critic, Iowa Sen. Tom Harkin, says the compromise benefits the most affluent Americans.

For the time being, the Republicans have the greatest problem with their own grass roots. For weeks, their leader in the House of Representatives, John Boehner, has already been called a “traitor.” The mantra of the right-wing grass roots is that taxes categorically cannot be raised. “This shouldn’t be the model for how to do things around here,” said the leader of the Republican senators, Mitch McConnell on New Year’s Eve. He added, however, “I think we can say we’ve done some good for the country.”