Representative Nancy Pelosi (D-CA) called it “a happy start to a new year.” That probably tells you all you need to know about the fiscal cliff deal that passed the House last night.
The bill—which President Obama has promised to sign, though he took off for Hawaii again after the vote—has a 10 to 1 ratio of tax increases to spending cuts. This is the President’s version of a “balanced” approach.
In addition to tax increases on Americans making more than $250,000 a year, the bipartisan deal will actually raise taxes on the vast majority of American workers. How? The payroll tax “holiday” has ended. The Wall Street Journal calculates that the “typical U.S. family earning $50,000 a year” will lose “an annual income boost of $1,000.”
Meanwhile, the higher tax rates will hit small businesses and investors—which is grim news for a country in need of new jobs.