This morning on ABC’s This Week, Senate Minority Leader Mitch McConnell (R-KY) reiterated what has become the go-to Republican talking point in the wake of the fiscal cliff deal: That the issue of taxes and new revenue is finished, and will not be re-opened. “Now the question is, what are we going to do about the biggest problem confronting our country and our future,” McConnell said.

But this time host George Stephanopoulos pushed back. He pointed out that since last year Congress has already cut $1.5 trillion in spending, without any counter-balancing hikes in tax revenue until the fiscal cliff deal:

STEPHANOPOULOS: The President has said he’s willing to engage in more discussions over the sequester and the government shutdown, but that would also include new revenues. You say that the tax debate is over.

McCONNELL: Oh yeah, the tax issue is finished, over, completed. That’s behind us. Now the question is, what are we going to do about the biggest problem confronting our country and our future? And that’s our spending addiction. It’s time to confront it. The President surely knows that. He’s mentioned it both publicly and privately. The time to confront it is now. We have to engage.

STEPHANOPOULOS: Let me just interrupt you there. In the last year in the Budget Control Act, the Congress actually cut $1.5 trillion in spending. That’s more than was raised in revenue in this last fiscal cliff deal. So are you saying that any discussion of revenue is completely off the table going forward? You will not accept any new revenues in any new deal?

McCONNELL: Yeah, absolutely. The tax issue is behind us. Now the question is, what are we going to do about the real problem?

Watch it:

Stephanopoulos got one detail wrong: The spending cuts of 2011 came from the spring budget deal to avert a shutdown as well as the Budget Control Act, which concluded the last debt ceiling crisis. But the total cuts did come out to at least $1.5 trillion over the next decade — and considerably more than that, once reduced interest payments due to a smaller debt are factored in.

So more than twice the $600 billion in new revenue raised by the fiscal cliff deal. And before that there was the $700 billion in reduced Medicare spending passed in the Affordable Care Act in 2010. The country has, in fact, already “confronted” the spending problem.

Even if Obama’s call for a balanced deal going forward is strictly adhered to, the country’s total deficit-reduction efforts would still be tilted in favor of the GOP’s preference for spending cuts. McConnell’s stone-faced insistence today that any future deal contain nothing but spending cuts vastly compounds the imbalance.

And as Stephanopoulos pointed out later in the interview, it’s a stance that makes a future agreement impossible by definition.

Our guest blogger is Julia Gordon, Director for Housing Finance and Policy at the Center for American Progress Action Fund.

As part of this week’s deal to avert the so-called “fiscal cliff,” Congress extended a little-known tax provision that says homeowners don’t have to pay tax on mortgage debt forgiven as part of a short sale or principal reduction. That’s great news for the millions of struggling homeowners that are “underwater,” meaning they owe more on their mortgage than their homes are worth, as they no longer have to fear a substantial tax payment shortly after working out a new agreement with their lender.

But Congress did not go far enough. In extending the provision as-is, lawmakers missed an opportunity to fix a blaring imperfection in the law that prevents more struggling homeowners from taking advantage of it.

The current law exempts only forgiveness of mortgage debt used to purchase a home or make major home improvements. As we recently pointed out in American Banker, if the homeowner at any point refinanced their mortgage with any “cash out” to consolidate bills, pay for minor home repairs, or cover education or medical costs, forgiven debt up to the amount of the cash-out is still taxable.

What’s more, treating partial amounts of the same mortgage differently adds a level of complexity that discourages all homeowners from taking advantage of the provision. For a homeowner to avoid a tax bill on their forgiven mortgage debt today, they must file two long and complex forms: a long-form 1040 for their first mortgage and a Form 982 for their other mortgage debt. If the IRS were allowed to treat all mortgage debt equally, this process could be drastically simplified.

This tax provision was initially passed in 2007, when the scope, depth, and impact of the housing bust were not yet clear. But if we’ve learned anything over the past five years, it’s that foreclosures have the same adverse impact on homeowners, investors, and neighborhoods regardless of what the underlying mortgage paid for. Since this tax provision aims to prevent foreclosures, it makes little sense for the tax code to differentiate between the two, and it adds unnecessary complexity.

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In a Yahoo News op-ed published today, Senate Minority Leader Mitch McConnell (R-KY) claims that the deal to avert the so-called “fiscal cliff” means that any congressional debate over taxes is “over.” “Predictably, the President is already claiming that his tax hike on the ‘rich’ isn’t enough. I have news for him: the moment that he and virtually every elected Democrat in Washington signed off on the terms of the current arrangement, it was the last word on taxes,” he wrote.

However, the roughly $620 billion in revenue raised from the fiscal cliff deal means that revenue will be roughly 18.5 percent of GDP over the next ten years, nowhere near enough to deal with the extent of the country’s obligations, as Michael Linden and Michael Ettlinger note. In fact, revenue is still going to be far below what would have been raised under two much-ballyhooed bipartisan plans, including one constantly lauded by Republicans:

Both bipartisan plans [Simpson-Bowles and Rivlin-Domenici] agree that we’ll need more revenue than 18.5 percent or 18.8 percent of GDP to substantially close the budget deficit, let alone balance the budget. In fact, the last time we actually balanced the budget—from 1998 to 2001—revenue surpassed 19.5 percent every year, averaged 20 percent of GDP those four years, and topped out at 20.6 percent of GDP in 2001. And that was before the Baby Boom generation began to retire.

President Clinton’s 1993 tax increase — which Republicans said would destroy the economy, but did the opposite — was three times larger than the tax increase in the fiscal cliff deal. President Reagan, meanwhile, “signed no less than four separate tax increases into law that were equal to or larger than yesterday’s fiscal cliff deal.”

The deal to avert the so-called “fiscal cliff” — which President Obama signed into law yesterday — included a host of corporate tax breaks, including breaks that benefit NASCAR and rum producers. As the Financial Times reported, another break will benefit big banks that park money overseas:

US banks and other large cross-border companies will retain a key tax break covering billions of dollars in foreign income under this week’s fiscal cliff deal.

Extending the so-called “subpart F exception for active financing income” will allow multinationals to defer paying US taxes on certain financial transactions undertaken outside the US. The companies are taxed by the US on that income only when it is brought back to the country. [...]

Companies including Bank of America, Bank of New York Mellon, Citigroup, General Electric and JPMorgan Chase have banded together to form the Active Financing Working Group, to lobby for renewing the exemption in recent years.

The group has paid $1.03m to lobbying firm Elmendorf Ryan since 2009 to campaign for the tax break to be extended, according to the Center for Responsive Politics.

Extending the exemption will cost the US Treasury some $9.4bn in lost revenue in 2013, according to estimates from the Senate Joint Tax Committee.

As Citizens for Tax Justice explained, “The active financing exception makes it easier for multinationals to expand overseas, making investments and creating jobs in foreign countries rather than here in the U.S., by reducing the related tax costs.” CTJ added, “The active financing exception also plays a significant role in the ability of large U.S.-based financial institutions to pay low effective rates.”

Meanwhile, the fiscal cliff deal allowed a cut in the payroll tax to expire, raising taxes on every working American. The deal will reduce U.S. economic growth by about 1.3 percent this year.

By passing legislation to avert at least part of the so-called “fiscal cliff,” the combination of tax increases and spending cuts that was set to take effect at the beginning of the year, Congress avoided income tax increases on households that make less than $450,000 a year. The deal still raises taxes on 77 percent of American households, though, because Congress did not include an extension of a temporary payroll tax cut meant to stimulate the economy.

What Congress did manage to extend, however, was a set of corporate tax breaks that benefit NASCAR, the professional stock car racing circuit, as well as breaks for filmmakers and Puerto Rican rum producers:

– SEC. 312. EXTENSION OF 7-YEAR RECOVERY PERIOD FOR MOTORSPORTS ENTERTAINMENT COMPLEXES.

– SEC. 317. EXTENSION OF SPECIAL EXPENSING RULES FOR CERTAIN FILM AND TELEVISION PRODUCTIONS.

– SEC. 329. EXTENSION OF TEMPORARY INCREASE IN LIMIT ON COVER OVER OF RUM EXCISE TAXES TO PUERTO RICO AND THE VIRGIN ISLANDS.

The legislation also extended two provisions — known as “active financing” and “look-thru” — that make it easier for corporations to shelter profits overseas. Overall, the package of corporate tax breaks extended in the legislation cost $40 billion a year, and corporate tax breaks in total cost the government more than $100 billion a year.

Meanwhile, there was bipartisan opposition to extending the payroll tax cut, since Republicans oppose it outright and many Democrats feared it would undermine Social Security, which is financed by payroll tax revenues. Proposals to replace the payroll tax cut with another provision, like the Making Work Pay credit, were never seriously considered as part of the final package. The expiration of the payroll tax cut (or failure to find a replacement) was the most economically damaging piece of the tax side of the fiscal cliff, according to the Congressional Budget Office.

Last night, the House of Representatives passed the Senate’s compromise bill to avert the so-called “fiscal cliff.” The bill, dubbed the “American Taxpayer Relief Act of 2012,” raised taxes on (some of) the wealthiest Americans, while punting several other budget decisions down the road, including whether or not the so-called “sequester” spending cuts will occur. Here are some important numbers from the bill’s resolution of the fiscal cliff’s tax side:

– The first major tax increase for the wealthy in 20 years. Allowing the expiration of some of the Bush tax cuts amounts to the first major tax increase for the wealthiest Americans since the 1990s.

– The Bush tax cuts expire for just 0.7 percent of taxpayers. The expiration will occur on income in excess of $400,000 (or $450,000 for a couple). This translates into “a little over 1 million Americans” according to the Tax Policy Center. The capital gains and dividend tax will also increase to 20 percent for wealthy earners.

– The top 1 percent will pay an average of $73,633 more in taxes. Bloomberg News noted that, “among households with incomes between $500,000 and $1 million, taxes would go up by an average of $14,812.”

– 77 percent of households will see a tax hike. Due to the expiration of a cut in the payroll tax, most workers will see their taxes increase slightly in 2013. The expiration of the payroll tax cut will deal a significant blow to the economy.

– $4 trillion in deficits and $600 billion in revenue. According to the Congressional Budget Office, the bill will increase the deficit by around $4 trillion over the next ten years compared to a world in which all of the Bush tax cuts expired. However, it raises about $600 billion more in revenue compared to the policies that were in place in 2012.

– $2.50 in spending cuts for every $1 in revenue. As Americans for Tax Fairness noted, “This bill raises $620 billion over 10 years, but $1.5 trillion in budget cuts were already enacted last year; that means for every one dollar in new taxes there have been 2.5 dollars in spending cuts to reduce the deficit.”

– Two million unemployed workers see benefits saved. Without the extension included in the fiscal cliff deal, millions of workers would have seen their federal unemployment insurance pulled out from under them.

– Estate tax giveaway costs billions. The estate tax rate will increase slightly to 40 percent this year with a $5 million exemption, but it would have gone to 55 percent with a $1 million exemption in the absence of a deal. As the Atlantic’s Matt O’Brien noted, “Only 3,730 households will pay the estate tax next year if the exemption is set at $5 million, versus 47,170 if it’s set at $1 million.”

The bill also extended provisions of the farm bill that will prevent milk prices from spiking and included an important provision to help underwater homeowners.