My reaction to the final fiscal cliff compromise was something along the lines of an exhausted sigh and shrug. Seems fine I guess. The whole manufactured crisis thing is hard to get worked up about after a while.
But I began to think… maybe there’s something being overlooked here: In an odd way, this could be seen as the first national policy victory of the Occupy Movement.
Like the fiscal deal or not, in 2013, the 1 Percent will pay the highest tax rate they’ve paid since 1979.
At the movement’s peak, although I was excited about its potential, I was kind of a pessimist about Occupy. I wrote then that without institutionalizing itself, it would dissolve before achieving the kind of national policy victories that the Tea Party had won.
But there is something to be said for the more intangible impact of social movements. They shape the thinking of everyone from your everyday dude on the street to professors, journalists, leaders of organizations and even presidents.
During Occupy Wall Street’s initial explosion onto the scene in 2011, I was in DC interning for the White House Council of Economic Advisers. It was fascinating to see how think tanks, economists, columnists, even the great global institutions of capitalism like the OECD and the IMF all felt it necessary to respond to Occupy and start talking about income inequality and how to address it.
Then one day the chief economist at the CEA brought all of us into her office to watch on TV as the president gave a speech in Osawatomie, Kansas. It didn’t create much media buzz, but she insisted this was an extremely important speech. And it was. It was the moment where Barack Obama publicly shifted to the strategy and message that won him re-election a year later.
Since the Tea Party’s rise and the miserable beatdown congressional Democrats had taken in 2010, the president had spent the past year moving his rhetoric to the center and trying to appease the right wing. Although in 2008 he originally campaigned on letting the Bush Tax Cuts expire for those making over $250k a year, he had outraged progressives like me in 2010 when he compromised with House Republicans to fully extend them for two more years (which would eventually lead to the fiscal cliff).
But as we saw in his shift on gay marriage, presidents, like any human being, change their minds sometimes. I believe it’s safe to say Occupy changed Obama. After that speech in Osawatomie, when for the first time he talked about the 99% and the 1%, he took a combative approach, with a clear emphasis on one issue: economic fairness. That was the message he used to successfully define the choice between him and Mitt Romney, and what ultimately won him the election a year later.
And in the first major political battle after the election, negotiating with congressional Republicans, he drew a line in the sand back to his original campaign promise that the Bush Tax Cuts must expire on incomes over $250k. Of course, being Barack Obama, he then crossed his line in the sand and offered a new threshold of $450k. But this one he held firm to. And interestingly enough, this is roughly the income level that puts you in the richest 1% of Americans.
So the One Percenters will pay the lion’s share of the tax increases in the fiscal deal. Meanwhile, thanks to the almost-impressive vicious stubbornness of the GOP, the incredibly-rich-but-not-quite-obscenely-rich Two Percenters (roughly incomes between $250k-450k) got the best deal. In fact, the downright impoverished will see a larger tax hike than they will next year. But at least in the Occupy frame of the world, the Two Percenters are still part of the 99%.
If anything this deal shows the sticking power of Occupy’s successful framing of our political economy as a conflict between the 99% and the 1%. This frame has, maybe for the first time, made its way into something written into law.
I’m sure if you asked most of the folks who participated in General Assemblies at the height of the Occupy Movement they would not be jumping with joy about this slight increase in the top marginal tax rate. But even if it wasn’t exactly their dream, in a way this is their victory.