Fiscal cliff deal largely disappointing for consumers

Despite the
significant hype, I wasn’t very worried that Congress and the president wouldn’t
reach a deal on the so called fiscal cliff. What I was concerned about was how
the deal would affect consumers, particularly older Americans.

The fiscal
cliff deal has a number of items that will benefit consumers. They include:

• All income
  below $450,000 for families and $400,000 for individuals will permanently be
  taxed at Bush-era rates.

• The 2009 expansion
  of tax breaks for low-income Americans – the Earned Income Tax Credit, the
  Child Tax Credit, and the American Opportunity Tax Credit – will be extended
  for five years.

• Federal
  unemployment insurance will be extended
  for another year, benefiting those unemployed for longer than 26 weeks.

• The
  Alternative Minimum Tax will be permanently patched to avoid raising taxes on
  the middle-class.

• Medicare and
  Social Security weren’t slashed.

However,
Congress missed a big opportunity to truly pass positive measures to help
consumers with these missteps:

• The deal
  doesn’t address the debt-ceiling.

• The payroll
  tax holiday will be allowed to expire,
  which means taxes will go up for consumers.

• A full
  package of temporary business tax breaks will be extended for another year,
  including breaks for race-car track owners, electric scooters, Goldman Sachs office
  space, coal produced on Indian lands, and Hollywood films. 

• Funding is cut for the Affordable Care Act’s
  consumer oriented and operated plans – non-profit, customer-owned and operated
  plans that could test out new ways to deliver health care – by about $1.9
  billion.

• The
  sequester will be delayed for two months. Half of the delay will be offset by
  discretionary cuts, split between defense and non-defense. The other half will
  be offset by revenue raised by the voluntary transfer of traditional IRAs to
  Roth IRAs, which would tax retirement savings when they’re moved over.
  

The upcoming budget cuts
required by the fiscal cliff deal will be part of discussions on the budget on Capitol Hill, and no one knows what
agencies and programs they’ll affect. That’s a problem for consumers because vital
programs may be slashed, especially with heavy lobbying from the military
industrial complex not to cut military spending.

Even though
the Democrats won big in November, Congress is gridlocked due to faulty
policies supported by Republicans, the conservative media, including Fox News,
and American corporations. It’s frustrating when so much needs to be done in
this country, but special interest groups squash progress and the ability of
the government to move forward positively.

Instead of
adequately funding needed programs for consumers, Congress will be bogged down
with what to cut, then we’ll have another fiscal cliff debate and – oh, yes –
another debt ceiling debacle.