Why Everyone Hates the Fiscal-Cliff Deal

It passed the House and Senate with bipartisan support, but liberals and conservatives alike found something to loathe in the final agreement.


John Boehner once had a name for this kind of legislation: "Crap sandwich."

The House Speaker used that pungent phrase to describe the 2009 financial rescue bill -- which he then proceeded to vote for. But it seemed equally applicable to the last-minute deal to avert the fiscal cliff that squeaked through the House late Tuesday night. There was one broad area of bipartisan agreement about the final deal: Everybody hated it.

It's not every day that the liberal group MoveOn and the conservative group FreedomWorks are united. But on Tuesday, both were calling on Congress to defeat the fiscal-cliff deal. And when President Obama gave a statement in the White House late Tuesday night, his tone was distinctly disapproving.

This may be the definition of compromise -- each side makes enough real concessions to feel truly dissatisfied with the final result, but both sides' ownership of the measure means it can't be used as a political wedge. Nonetheless, the legislation left a bad taste in just about everyone's mouth. Here's why:

* President Obama: It's too small. Speaking in the White House after 11 p.m. Tuesday night before jetting off to Hawaii, the president briefly praised Congress for getting its act together, then turned to lament the provisional nature of the agreement. He and Boehner, he noted, had "tried to negotiate a larger agreement" that would encompass both long-term deficit reduction and investment in infrastructure and education. "Unfortunately, there just wasn't enough support or time for that kind of large agreement in a lame duck session of Congress," he said. "And that failure comes with a cost, as the messy nature of the process over the past several weeks has made business more uncertain and consumers less confident." In fact, the agreement sets up several new deadline-based fights down the road. Rather than deal with the automatic spending cuts of the so-called sequester, it postpones them for two months, forcing Congress to deal with them again in a matter of weeks. And the bill doesn't raise the debt ceiling, setting up another fight in a few months' time.

* Liberals: It doesn't raise taxes enough. In its email to members Tuesday afternoon, MoveOn pointed out that Obama campaigned on a promise to raise taxes on income over $250,000 -- only to relent and allow a final bill with a $450,000 ceiling instead. The result is that the vast majority of the tax cuts proposed by President Bush in 2001-03, all of which were set to expire, have been permanently enshrined in the tax code. The deal also permanently locks in low rates for the estate tax and capital gains tax, and brings in just $600 billion in new revenue in the next decade. That's a fraction of the $1.6 trillion Obama initially sought; it's even less than the $800 billion Boehner originally offered the president. As a matter of negotiating strategy, many on the left believe Obama could have held his ground and forced the GOP's hand. By compromising, they say, he's forfeited the most significant position of leverage he's ever likely to have. "I can't help [but] believe the president could have done better than this," former Labor Secretary Robert Reich wrote. "After all, public opinion is overwhelmingly on his side. Republicans would have been blamed had no deal been achieved."

* Conservatives: It doesn't cut spending enough. Despite passing the Senate with overwhelming bipartisan support, by a vote of 89-8, the deal spent much of Tuesday in limbo as House Republicans revolted. They were egged on by groups like FreedomWorks and the Heritage Foundation, which portrayed the deal as consisting almost entirely of tax hikes with little in the way of spending cuts to balance them out. FreedomWorks called it "a typical, Washington-insider deal: ... Increase taxes, and increase spending. If this so-called deal passes the House, we are in big trouble as the Senate-passed bill increases already insane deficit spending." RedState founder Erick Erickson proclaimed, "The Republican Establishment in Washington, DC should be burned to the ground and salt spread on the remains." The deal punts on the GOP priorities of tax and entitlement reform, and as Obama noted, it doesn't meaningfully reduce the deficit. And it arguably violates Republicans' more than two decade-long refusal to vote for tax increases. For these reasons, two potential 2016 Republican presidential contenders in the Senate, Rand Paul and Marco Rubio, voted against the deal -- though Rep. Paul Ryan, the budget hawk and former vice presidential nominee, cast his vote in its favor. The deal ended up passing the House with twice as many Democratic votes as Republican ones.

* Deficit hawks: It's a Band-Aid. "Washington missed this magic moment to do something big to reduce the deficit, reform our tax code, and fix our entitlement programs," Erskine Bowles and Alan Simpson, the co-founders of the Campaign to Fix the Debt, lamented. If all automatic tax hikes and spending cuts were allowed to take effect -- that is, if we went over the fiscal cliff permanently -- the deficit would be about $4.6 trillion lower in 10 years than it will be under this agreement. That's not really a realistic baseline since few were advocating such an outcome, but even if you credit the $600 billion in new revenue raised by the deal, it does awfully little to reduce the deficit in the long term. The Committee for a Responsible Federal Budget, in running down the bill's pros and cons, concluded, "Clearly, lawmakers will need to go further...to enact savings sufficient in size and scope to solve the country's debt problems."