Fiscal Cliff Averted, But a New Crisis is on The Way
Glad the Fiscal Cliff is over? Well, there is more of the same to come. More Congressional wrangling, more name calling, and more pushing the decision making to the 24th hour.
Here's the calendar of events:
Sequestration: this is the $600 billion in tax cuts that largely hit the Defense Department. Congress was supposed to decide what to do about the looming tax, but it hasn't done anything except kick the can down the road for another two months. Expect that conversation to kick into gear late next month.
Debt ceiling: Democrats want permission to spend more money in March. Congress, as you know, has the Constitutional authority to set our debt ceiling, and has to agree to raise it. Watch for a big fight, as Republicans try to institute some sort of fiscal sense on Capitol Hill.
Those are the big events, but there is another one that happened today. Congress didn't pass a resolution to recognize what happened, but you probably already know. The payroll tax has expired, and if you get your first paycheck today, well, watch out, because you may be shocked by the 50% increase in the tax. The Social Security withholding tax reset to 6.2% from 4.2%. For a middle class American family earning $50,000, that means a $1,000 tax hike this year.
If this is the first shot over the bow in terms of tax hikes, it's not going over too well.
Here's what some people are saying on twitter.
Hey Dems- if you're asking #whyismypaychecklessthisweek? It’s because you got what you asked for. Own it. #tcot
#whyismypaychecklessthisweek. Because Obama loves to penalize the makers and redistribute to the takers.
It goes on from there... my prediction? If there is no attempt to curb Federal spending, we will have to raise taxes again, and again, and again. That’s the new normal!