Demos President Miles Rapoport on the New Year's Fiscal Agreement

Release Date: 
January 2, 2013

New York -- In response to the late night passage of a tax deal by the US House of Representatives, Miles Rapoport, president of the national nonpartisan public policy organization Demos released the following statement:

"It is in the nature of a complicated bipartisan agreement that it looks very different depending on what prism you look at it through.  Two elements are critically important: what is actually in the bill that passed and the President will sign, and how its passage ‘sets up’ the future fiscal debates.

READ: Why is Washington Reducing the Deficit Instead of Creating Jobs?

"On both counts, we believe the agreement is a significant step forward.  In terms of the content, the bill preserved unemployment benefits which would have been the first major impact, and embraced the concept that the middle class needs protection and it is the 1% who need to contribute more to balancing our budget.  This was reflected in the 39.6% rate, the modest increase in dividends and capital gains taxes, and in the reinstatement of higher rates on five million dollar estates.  The preservation of the child tax credit and the EITC are really important as well.   For a negotiated compromise, this was significant progress.

This agreement reflected a new contour in the debate over who should pay what taxes.

"The major question becomes, what is the shape of the debate to come.  We believe the President and the Democrats’ hands are strengthened, not weakened.  Of course the conservative Republicans will argue that 'we ‘gave’ on taxes, now we have to slash spending.'  But that need not be the debate, and President Obama’s comments last night make that clear.  If the debate is in stages, and is about dealing with our economy, economic security, and our fiscal issues, then the next stage is about all of those things as well.

"The debate also exposed major fissures in the Republican Party over these issues, and the level of turmoil in that party weakens their ability to control the debate.  The 151 House Republicans who voted no revealed that their real issue is not budget balance, but ‘starving the beast’.  That position, as well as their position on taxing the 1%, is at variance with the American public.

"This agreement reflected a new contour in the debate over who should pay what taxes. The debate about the role of government, and how to strengthen our economy and our social contract, and reduce inequality, is ongoing. That is a debate that we can and should have, and can and should win—not in every aspect of every agreement, but over time.  And that is all of our responsibility. 

"The President, the Vice President, and the Democrats did well in this discussion under difficult circumstances.  We will do our best to help frame the debate towards progress going forward."

READ: Demos' fiscal blueprint Investing in America's Economy

To speak with Rapoport please see the contact info above in the righthand column.

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