"This isn't a normal negotiation," Greg Sargent warns us.
... The current Republican demand, as I understand it, is that Dems must agree to Social Security cuts and a higher income threshold for the lower tax rates (either $400,000 or $500,000, depending on the source), in exchange for an extension of middle class tax cuts (which Republicans also want) and an extension of unemployment benefits. If Dems don’t give up those things, while allowing Republicans to retain their debt ceiling leverage, taxes go up on everybody and unemployment benefits expire for over two million Americans.
Why would Democrats agree to Social Security cuts and lower tax rates on many wealthy households even as Republicans hold on to their leverage to extract still more in spending cuts later? No wonder a Dem aide described this as a “serious setback.” ...Sargent, WaPo
As we have noted already, the real fight is among Republicans. Their disunity -- and childishness -- is the cliff we're paying for. Still, there are elements within the Republican party who recognize a political opportunity. Alex Blumberg explained on NPR this morning:
... Going off the cliff will let Congress sell a tax increase as a tax cut. Simon Johnson, an economist at MIT, walked me through how that works.
A big part of the fiscal cliff is the expiration of temporary tax cuts. So, for example, the 33 percent tax bracket will rise to 36 percent on Jan. 1.
Say you think the ideal rate for income in this bracket should be higher than 33 percent. Say you think it should be 34 percent. On Monday, Dec. 31, 34 percent is a tax increase. On Tuesday, Jan. 1, it's a tax cut. ... NPR
But we'd already figured this out. Let's sincerely hope Democrats in both Houses are planning a joyful burning at the stake for their Republican colleagues -- and that way of dealing with Republicans becomes the new normal.