Fiscal Cliff

Is a Fiscal Cliff Deal on the Way?

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After several weeks of back and forth, new reports suggest that John Boehner and President Obama may be closing in on a possible fiscal cliff deal. Here's Ezra Klein, with the rumored details:

Boehner offered to let tax rates rise for income over $1 million. The White House wanted to let tax rates rise for income over $250,000. The compromise will likely be somewhere in between. More revenue will come from limiting deductions, likely using some variant of the White House's oft-proposed, oft-rejected idea for limiting itemized deductions to 28 percent. The total revenue raised by the two policies will likely be a bit north of $1 trillion. Congress will get instructions to use this new baseline to embark on tax reform next year. Importantly, if tax reform never happens, the revenue will already be locked in.

On the spending side, the Democrats' headline concession will be accepting chained-CPI, which is to say, accepting a cut to Social Security benefits. Beyond that, the negotiators will agree to targets for spending cuts. Expect the final number here, too, to be in the neighborhood of $1 trillion, but also expect it to lack many specifics. Whether the cuts come from Medicare or Medicaid, whether they include raising the Medicare age, and many of the other contentious issues in the talks will be left up to Congress.

The deal will lift the spending sequester, but it will be backed up by, yes, another sequester-like policy. I'm told that the details on this next sequester haven't been worked out yet, but the governing theory is that it should be more reasonable than the current sequester. That is to say, if the two parties can't agree on something better, then this should be a policy they're willing to live with.

In addition, the deal will likely accept Rep. Boehner's offer to lift the debt ceiling for a year without a fight, putting off another big budget battle for a year or so. Indeed, that's what a deal like this would do: delay big fights until later. Yes, there would be some substantive policy changes: Raising income tax rates on super-high earners, changing the way Social Security benefits are calculated. But for the most part, a deal like this would be about getting past the fiscal cliff, temporarily, not fixing the country's budget woes or resolving any of the stubborn differences between the two parties on the size and role of the government. 

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26 responses to “Is a Fiscal Cliff Deal on the Way?

  1. “offer to LIFE (emphasis added) the debt ceiling ban”?

  2. Classic deal. Higher taxes now, spending cuts, erm, let’s see (“negotiators will agree to targets for spending cuts”), that would be . . . never.

    1. Was it ever going to be anything but that?

      Also -1000 internets for Will Ferrell. Ugh…

    2. Exactly. F*** this gets old. And, of course, all those sycophants in the media will hail Obama for sacrificing his goals. Then, before the “cuts” ever take place, there will be stories about the horrific affects on people which will lead to actual spending INCREASES.

      Jackasses.

  3. resolving any of the stubborn differences between the two parties

    Dems: “We want the government to only grow at 10 times inflation!!!”

    Reps: “We want the government to only grow at 9.9 times inflation!!!”

    Sadly I have faith these two groups can resolve this.

    1. In traditional fashion, by agreeing that government can only grow at 11 times inflation.

      1. If you give us lower taxes, we’ll give you more spending.

  4. The deal will lift the spending sequester, but it will be backed up by, yes, another sequester-like policy. I’m told that the details on this next sequester haven’t been worked out yet, but the governing theory is that it should be more reasonable than the current sequester.

    Fuck this deal.

    I want the above deal (higher taxes on $1 million, PLUS Chained-CPI), PLUS medicare eligibility age to 67. AND I want ALL of the sequester cuts.

    Taking the “fiscal cliff” as the baseline, the deal is actually more like “more spending on defense and discretionary, in exchange for lower taxes on the middle class and smaller COLAs”.

    In other words tiny amounts of symbolic cuts to entitlements in exchange for more spending now and lower taxes now.

    Whatever this “sequester like” spending cut deal is, it’s going to be another kick-the-can pile of horseshit that sets up another media-scare “fiscal cliff” for next year, when they can kick-the-sequester-can yet again.

  5. The question is what the House Republicans will do. Rumor has it they are willing to do whatever Boehner tells them to do. But history suggests they’re stubborn dogmatists who would burn the whole country down before compromising on anything.

    1. I like the way Republicans are stubborn dogmatists for refusing a deal that includes symbolic tax rate increase, but Dems are not stubborn dogmatists for refusing a deal that does not include symbolic rate increases.

      1. Tony like to think that playing the “dogma card” means he wins every argument.

    2. T o n y| 12.17.12 @ 5:28PM |#
      “But history suggests they’re stubborn dogmatists who would burn the whole country down before compromising on anything”

      History suggests that shithead is a lying sack of shit who will try any dishonesty to support team blue.

    3. But history suggests they’re stubborn dogmatists who would burn the whole country down before compromising on anything.

      Yes, as surely as history suggests that up is down, day is night, and the sun rises in the west. Did the last three decades not happen in your universe?

    4. But history suggests they’re stubborn dogmatists

      Actually Obama is a huge liar when it comes to these negotiations. Last time Boner pretty much caved into everything and then Obama changed it for more…which in turn lead to congress and Obama kicking the football down the field and the current fiscal cliff.

      Everything Boner has currently proposed pretty much comes from either what Obama has proposed in the past or from what other democrats have proposed.

      Of course Boner is also a terrible negotiator as he actually lets Obama change his mind and move the goal post after they make agreements.

      Why Republicans send that idiot to negotiate with Obama is i guess dogmatic…if being consistently stupid is dogmatic.

    5. hahah the plan IS to burn the country down you moron. A few die-hards will stand on principle and watch Boenher and Obama sell us all down the river.

  6. But history suggests they’re stubborn dogmatists who would burn the whole country down before compromising on anything.

    What history is that? Howard Zinn?

    1. The People’s History!

      1. Whenever something is preceded by the modifier “The People’s” you can be sure that you’re in for an entertaining brainwashing experiment.

  7. Any bets on how long it’ll take Boo-hoo Boehner to fold like a cheap suit?

    1. You misspelled “Bend over like a cheap whore.”

    2. “oh quit blubbering boo boo boner. You want a Fucking rag to honk into, you Fucking sissy?”

    3. he already has. It’s all over but the closing credits.

  8. No substantive changes from the deal? That’s okay, Nobel Prize-winning economist Paul Krugman say a trillion dollar deficit is no big deal, and a trillion is just a scary number we can safely ignore.

    http://www.mercurynews.com/opi…..e-trillion

  9. stubborn dogmatists who would burn the whole country down before compromising on anything.

    Wait- that’s who, now?

  10. 1 trillion in extra income (theoretically), and 1 trillion in less spending (theoretically). Over what? 10 years?

    Okay, so what do we do about the other $13T in debt we’ll have racked up over that time?*

    *I’m basing this on out ~$1.5T deficit per annum.

  11. http://www.nugenix.com/report/…..02kw=ads_n

    right back at you.

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