After months of deliberation, posturing and enough political grandstanding to fill the Pacific, Congress passed a bi-partisan deal to avert the fiscal cliff sequestration cuts (for 2 months) and make permanent some of President Bush’s tax cuts. Left out of the deal is much in the way of spending cuts as well as an increase in the payroll tax meaning less take-home pay for nearly everyone.

Report from the Mercury News:

The key issue in the fiscal cliff debate in Washington was how much to raise taxes and on whom, with the deal ultimately sparing most Americans from an income tax increase.

But in a development that attracted less attention Congress allowed one type of tax to increase for most of us, the payroll tax, effectively cutting the take home pay of three quarters of American workers.

While Bay Area tax experts say many good things are to be found in the deal, including for the unemployed, middle-class parents of college students and the wealthy, the American Taxpayer Relief Act that Congress approved late Tuesday raises billions from workers and even those who are self employed by failing to extend a tax holiday that had reduced payroll taxes from 6.2 percent to 4.2 percent.

The tax money goes toward old-age, survivors and disability insurance, or what commonly shows up on people’s paychecks as Social Security Insurance, or SSI.

By some estimates, the failure to extend the tax holiday means that people who make $50,000 a year will pay $1,000 more in taxes this year.

The Tax Policy Center in Washington, D.C. estimates that the expiration of the payroll tax cut will affect 77.1 percent of U.S. households, who will see average increases of $1,635, according to Bloomberg News.

“For most middle-income tax payers, that’s the big change,” said Robert M. Caplan, a Foster City certified public accountant who is also a member of the
California Society of CPAs’ tax and estate planning committees. “With the exception of the payroll tax increase, for most people there was lots of good news.”

As with most pieces of legislation related to our fiscal situation in recent years, this bill does very little for the long term and merely has a band-aid effect for the short term.


  1. The selective attention of these lawmakers and some pundits is disgusting.

    If an income tax cut, which had a sunset provision, expires, then that is a tax increase. But if a FICA tax cut, which had a sunset provision, expires, then that is just the normal process, so they won’t bother to mention that. Obama, Boehner, Ryan, and almost every US Senator, all cut from the same cloth.

  2. Neville

    You hit the nail right on the head. When will people get passed the partisan drama which is produced by the media and stars Democrat and Republican “actors” which inevitably keeps Americans fighting and arguing about meaningless crap. All the while, these sick f…ing psychopaths STEAL from the people.

    The Democraps and Repukes are exactly the same.

  3. This is no sane , balanced , or Constitutional “deal ” to speak of ! With no spending cuts to reduce Debt , it GUARANTEES deeper collapse & decline of America in the future ! WASHINGTON is so radically out of control I can hardly stand to listen to news reports anymore ! America is allowing itself to be EXECUTED by a radical COMMUNIST PRESIDENT ! This man is the greatest enemy we face from within ! Wake up, or die by suicide , as Lincoln said it !

  4. Lori: Chill out. Geez. Their mistake was in trying to pack too much into one event. The only way they got anything passed was to split it up. The tax part came due NOW, so they had to deal with that.

    Spending is an ongoing issue, and now they can focus on that. The “deadline” for the spending side isn’t until the fight over the debt limit.

    The real problem was that Boehner couldn’t speak for his side. He went over to the White House to “negotiate,” but couldn’t deliver the votes, anyway. He couldn’t even get support for his “Plan B,” which could have passed the House and looked like an accomplishment before it was shot down in the Senate. He couldn’t even do that. He’s a “leader” without followers.

    • Goethe you nailed it. It’s because of freeks like Lori that congress can’t get anything done. They vote for teabaggers who won’t compromise on anything. They think they won the election. Wake up Lori.

      • Maybe some people are concerned that we’re over $16 trillion in debt and going to end up like Greece so there isn’t much more room to compromise us into oblivion.

        • Nate: Yeah, but it doesn’t help to go nuts about it. Generally speaking, if someone rants about “Nazis” or “Communists,” they do not deserve to be read. And, unfortunately, the loonies on both sides of the Congressional aisle have taken over the asylum.

          The current deal was just to deal with the tax side. Now they need to deal with spending. It never makes sense to put too much into one bill. They never pass that way, and if they do, they end up causing trouble.

  5. Goethe – You’re missing the point. The “fiscal cliff” sequester arrangement came about due to the promises that were made the last time they fought over the debt limit, when the nation’s credit rating got a cut, the stock market tanked, etc. There was pressure to solve that. The Repubs only agreed to raise it if the Congress created and voted in a spending cut program. That program had a supposed guarantee that said that if they couldn’t come up with a specific spending cut program by the end of 2012, across the board spending cuts would be implemented instead. So what’s happened now? Neither a specific program was implemented NOR did the across the board cuts take effect, and now everyone is talking about the next time they fight over the debt limit as the time to address spending cuts. The American people never really understand things at a level deeper than slogans, thanks to the media, so suddenly it was the “fiscal cliff.” Obama is a master of this game, gets whatever he wants (i.e. read tax increases for all), while looking to most as if he somehow cut taxes for the middle class, and makes no spending cuts. Yet most people I know think that he won for them, forcing the rich to pay “their fair share” while, in truth, we are all paying 2% more today than we were a few days ago.

  6. I just remembered why I dropped off this site once before. Comments from folks like Piccbly who can’t tolerate free speech without name calling, in this case Lori, “you idiot” or “freeks like.” If you don’t agree with her, fine, express your view, but don’t make personal attacks on people who have posted their views. And while I’m at it, the word is spelled “freaks.”

    • lar01

      Don’t fret. Plccbly sounds like one of those dumb asses who make up the majority of the ignorant people of our society who believes that the government should get more of our money.

      Piccbly is the one who needs to either WAKE UP or SHUT UP! Maybe this video might do the trick – that is if American Idol isn’t on…

  7. David Copperfield could not have done it any better, Poof, like it never existed in the first place. Now we get more of the same, higher taxes, more regulation, and a bigger deficit.

      • No Spending Cuts? Not one of them was serious about “actual cuts”.

        The Repubs never wanted any “actual” spending cuts. The “End Game” was to raise “revenue” (taxes) and make a “circus” out of it, just like the Debt Ceiling debacle. A Ceiling which has NO Ceiling!

        This fiscal cliff “nonsense” was all for show. I’m sure when the voting was all said and done, the Dems and Repubs “slapped” each other on the back and congratulated themselves on a wonderful acting performance.

        These psychopaths are one-in-the-same when it comes to war, taxes and oppressing the people. They only differ on the “stuff” that keeps the American people fighting amongst themselves.

        The American people are so dumbed-down, it’s scary!

        • DT,

          Your posting is hysterical and puts the
          Fiscal Cliff in an easy to understand perspective!

          Next month will be the true indicator to whether or not the politicians will MASSIVELY cut spending or keep raising the debt ceiling, that will continually drive our credit rating into the toilet.

          Standard & Poor’s already took the unprecedented move of cutting the U.S. credit rating to AA-plus
          from AAA. If Fitch and Moody’s follow, the interest rate on our debt will skyrocket and we will NEVER be able to pay off the principle. The countries holding our notes could then come in and start SEIZING private and public assets.

          Americans need to march into Washington during the vote on the debt ceiling and let our voices be heard and our faces be seen! We need to march around the Capital Building with lighted torches and DEMAND that our country remain FREE & financially solvent. We need to bring Ron Paul at the forefront of the move and give him a podium and a sound system to espouse the truth and rally the people!!!!!

          • Daisy

            Count on this. The Democrats and Republicans “together” WILL raise the Debt Ceiling.

            The government-controlled Media is already promoting and sponsoring the “show” and highlighting the “actors” who will take part in this “Reality Show Drama”.

            But it’s already been decided. Together, the Democrats and Republicans have agreed to put on another “performance” for the American people and in-the-end the Debt Ceiling, which has NO Ceiling, will be raised.

            • I hear what you are saying DT. Peter Schiff says the same thing! That the Debt Ceiling (Congress approved in 1917) is now a loop hole to avoid balancing the budget.

              Americans need to WAKE up and educate themselves to what Washington and Politicians are really about ~ lining their own pockets at the expense of the tax payers and workers. (Commodities that they need).

     is a good place to get FACTUAL information. Tom F. Woods (a 40 year old Harvard educated economist/writer) He is the creator of the liberty classroom website. He is also a friend and advisor to Ron Paul. Conservatives, Libertarians, Americans who love this country MUST take a stand or SURRENDER to the un-thinkable: Loss of Liberty, Freedom, Sovereignty, & Religion!

            • Daisy

              For the federal budget to balance, there must be “actual” spending cuts to government programs and bureaucracy – and the borrowing must cease.

              Now picture THAT happening in your mind’s eye!

            • DT: Well, you could do is what Bush did: put things “off-budget.” Don’t want people to know how expensive it is to go to war? Put it “off-budget.” One of Obama’s problems is that he put wars back INTO the budget. Now he has to figure out how to pay for them. . . .

            • Goethe

              Budget? What budget? It’s been over 3 years since we had a budget.

              The reason a budget is a statutory responsibility is so the people will know how politicians are spending their taxes.

              And there’s a reason why Obama and the Senate has contempt for that law: so their recklessness can be hidden from voters.

              The psychopaths in Washington have NO intention of passing a budget. They either create an “off-budget” line item or they don’t submit a budget at all. Either way, there is no accounting of the people’s taxes.

              In a nutshell – BOTH PARTIES are made up of Evil Sons=of-Bitches!

            • Goethe – as usual with your anti-Bush rhetoric from liberal crap – about War Budget – Bush kept the war integrated with Defense budget – as does your buddy Obama – very difficult to tell what is normal defense spending increase and what is specific uniquely to War.
              2001 — $290.9
              2002 — $332.1 (14.2%)
              2003 — $388.9 (17.1%)
              2004 — $437.1 (12.4%)
              2005 — $474.4 (8.5%)
              2006 — $499.4 (5.3%)
              2007 — $529.9 (6.1%)
              2008 — $594.7 (12.2%)
              2009 — $636.8 (7.1%)
              2010 — $666.7 (4.7%)
              2011 — $678.1 (1.7%)

              Read more:

            • Sam: I ain’t anti-Bush. I’m anti-war.

              What I’m wondering is why you don’t LOVE Obama, since in your own statistics, he is pumping more money into the Military-Industrial Complex than your buddy, Bush.

            • Goethe – look at % increase vice troops deployed and you’ll know the answer to your question. (hint: moving more troops between wars and home leaves less for building / designing capability)

            • Sam, I don’t know what you’re trying to say. Obama DOUBLED the average defense budget that Bush had, so I’m not anti-Bush or pro-Obama, and that is just BS, except that you feel that you have to defend Dubya all the time, and that’s a weakness.

              If you’re talking about deployment, explain to me why the Founding Fathers would not be spinning in their graves to find that we have–

              Almost $50,000 troops in Germany. As if they’re going to be invaded by the Czech Republic, and if they were, that it would be OUR problem.

              OVER 50,000 troops in Japan, as if the Emperor might change his mind about his empire.

              Almost 30,000 in Korea. As if.

              Over 10,000 in Italy (to protect the Pope, I assume), almost 10,000 in the United Kingdom–in case they get the idea to do another War of 1812.

              Hell, we have over 20,000 active troops in Alaska, in case the Canadians get pushy. And almost 50,000 in Hawaii–surprising that it doesn’t cause the islands to “tip over.”

              Aside from the nearly 70,000 we have in Afghanistan, we have troops in (are you ready?)–Bahrain, Diego Garcia, Djibouti, Egypt, Kuwait, Qatar, Saudi Arabi, UAR, Australia, Philippines, Thailand, Belgium, Greece, Netherlands, Portugal, Spain, Turkey, Canada (for cryssake), Greenland, Gitmo, Guatemala, Honduras,Guam, and Puerto Rico.

              “Foreign entanglements.”

            • Goethe

              Explaining US troop deployment to a Neo-Con or a Zionist = is like trying to explain why heroine is bad to use to an Opiate Addict.

              They know it’s not the right thing to have happen, but they just can’t help themselves.

  8. *”Averting” the Fiscal Cliff — Or, patching the Titanic with bubble gum!*

    Rightly the Democrooks and Republicons knew that Nothing will change while the sheeple can still stuff themselves galore with Bic Macs and Fried Chicken… so, more taxation and no spending cuts will work AGAIN.

    But the moment the sheeple begin to starve, will be the instant all hell breaks loose… and sadly, the Criminals in DC — the non-producing leeches called Politicians — are blindly (or purposefully) working to this End!

    Mark my words — in a year or two, you’ll be fighting your neighbor for a loaf of bread…so sad, that you’ve allowed the Politicians to do that to US.

  9. DT,

    I for one would love to see massive spending cuts! I would start out by ELIMINATING all medicaid and supplemental social security to people (including children) who have never paid into the system. Paying welfare mothers to raise their children, should also be eliminated. Why should the remaining 53 percenters continue to pay for the non-producers, people who contiune to make poor choices? I lived and worked amongst the poor and I can tell you that poverty has more to do with personal choices than anything else! People ALWAYS have $$$ for entertainment; cigarettes, alchohol; drugs; cell phones; clothes; and getting their nails and hair done, but scream poverty when it comes to paying their bills and feeding and providing for their children. I also worked for a MAJOR Children’s Hospital and was surprised to recently learn that over 50% of its patients are now recipients of welfare.

    Health care is a LUXURY and shouldn’t be a government issued “right”. Health care insurance wasn’t offered until the late 1930’s. It was a “benefit” that employers used to attract workers and to help offset their medical bills. After John F. Kennedy was elected president in 1960, the climate toward national health insurance was somewhat more favorable. But the American government realized the only way to successfully enact government-sponsored healthcare was to start slowly. The elderly was a natural target segment, because many employers didn’t offer extended coverage, once a worker retired.

    Veterans; seniors; and people who have paid into Medicare and Social Security need to be first in line to receive it. After all, they didn’t have a choice in the matter and FICA was there to collect. All others, go to the back of the line, and IF there is anything left over, then is when “benevolence” should occur.

    The government also needs to re-write the Social security rules and throw out the antiquated ones. Women (stay-at-home moms) shouldn’t receive 1/2 of their husband’s benefits, if they have never paid into the system. This rule may have kept women from starving years ago, but it is grossly unfair to people who have paid their 10 years (40 quarters) into the system.

    Bills should be VOID of pork and no longer allowed until our financial house is back in order!

    Individuals can do the following for themselves to prepare for the worst of times: 1. Pay off your house as quickly as possible 2. Pay off all credit cards and don’t purchase anything unless you can pay cash 3. Stockpile guns/amo; 4. Stockpile food/water/personal necessities 5. Accumulate bartering goods such as gold, silver; tools; seeds; medical supplies; & survival geer/rations in the event of an attack or some other national catrastrophe.

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