Looks like there may be a deal. While you and I were out shopping for the new BMW X-1, Obama was tossing the right a tempting morsel -- "a deal that would raise revenues by $1.2 trillion over the next decade but keep in place the Bush-era tax rates for any household with earnings below $400,000."
The offer is close to a plan proposed by the speaker on Friday, and both sides expressed confidence that they were closing in on a major deficit-reduction plan that could be passed well before January, when more than a half-trillion dollars in automatic tax increases and spending cuts would kick in. ...The White House plan would permanently extend Bush-era tax cuts on household incomes below $400,000, meaning that only the top tax bracket, 35 percent, would increase to 39.6 percent. The current cutoff between the top rate and the next highest rate, 33 percent, is $388,350. ...NYT
Is Social Security safe?
No, not entirely.
The president is sticking to his guns principles with respect to much-needed infrastructure spending and an extension of unemployment benefits.
The White House says the president’s plan would cut spending by $1.22 trillion over 10 years, compared with $1.2 trillion in cuts from the Republicans’ initial offer. Of that, $800 billion is cuts to programs, and $122 billion comes from adopting a new measure of inflation that slows the growth of government benefits, especially Social Security. ...NYT
The ball is back in Boehner's court. Given the urgency and the fact that more and more Americans understand that this "crisis" is a Republican invention, Boehner had better take the deal.
I think we've all noticed that Republican Boehner, in a persistent whine, tabs every proposal from the White House "unrealistic." Meanwhile, Obama shuts up and does his job, a job that includes dealing with a rightwing-sponsored crime scene in Connecticut. It's hard not to be wholly disgusted with that party of poseurs.
From the Washington Post:
Democrats in particular seemed buoyed by the status of negotiations after a weekend of horse-trading by Boehner’s senior policy adviser and Obama’s chief liaison to Congress. Those negotiations played out in the shadow of the massacre of 20 elementary school students in Connecticut on Friday and the death Monday of Sen. Daniel K. Inouye (D-Hawaii), who had served 50 years in the Senate.
If a deal is reached, people in both parties say, it would include postponement of roughly $100 billion in automatic spending cuts to the budgets of the Pentagon and other agencies next year. But $1 trillion in future cuts to agency budgets adopted during the 2011 budget battle would remain in place. Counting around $800 billion in savings from ending the wars in Iraq and Afghanistan, the overall package would come close to reducing deficits by a total of $4 trillion over the next decade — a target that economists say would stabilize the soaring federal debt. ...WaPo
Paul Krugman doesn't like the latest proposed "deal."
The point is that we shouldn’t be doing benefit cuts at all; but if benefit cuts are the price of a deal that is better than no deal, much better that they involve the CPI adjustment than the retirement age.
But is this rumored deal better than no deal? I’m on the edge. It’s not clear that going over the cliff would yield something better; on the other hand, those benefit cuts are really bad, and you hate to see a Democratic president lending his name to something like that. There is a case for refusing to make this deal, and hoping for a popular backlash against the GOP that transforms the whole debate; but there’s also an argument that this might not work.I want to see more — and also want to see whether the Republican crazies scuttle the whole thing before it even gets off the ground. ...Krugman, Economics and Politics