Preserve executive bonuses by ending Social Security and Medicare

Worried that lawmakers will allow taxes to rise for the wealthiest Americans beginning next year, financial firms are discussing whether to move up their bonus payouts from next year to this month. ...NYT

___

White House officials and Congressional Republicans said Sunday they were closing in on a deal to temporarily continue the Bush-era tax cuts at all income levels, while bitterly frustrated Democratic Congressional leaders began exploring whether they would have the votes for such a package.

Rather than extending the tax rates only on income described by Democrats as middle class — up to $250,000 a year for couples and $200,000 for individuals — the deal would also keep the rates for higher earners, probably for two years. In return, Republicans said they would probably agree to extend jobless aid for the long-term unemployed.

Senior Democrats on Sunday said that they were resigned to defeat in the highly charged tax debate, and they voiced dismay. ...NYT

___

Any deal cut between the White House and the GOP would have to be ratified by Democrats in Congress who are growing increasingly anxious about the prospect of voting to extend tax cuts for the rich along with breaks for the middle class. Many in the House are particularly agitated by the ongoing negotiations and say they are not inclined to rubber-stamp a deal that does not win significant Republican concessions to extend unemployment insurance as well as a host of tax cuts that were created in the 2009 stimulus package and are set to expire. ...WaPo 

___

Bear in mind that Republicans want to make those tax cuts permanent. They might agree to a two- or three-year extension — but only because they believe that this would set up the conditions for a permanent extension later. And they may well be right: if tax-cut blackmail works now, why shouldn’t it work again later?

America, however, cannot afford to make those cuts permanent. We’re talking about almost $4 trillion in lost revenue just over the next decade; over the next 75 years, the revenue loss would be more than three times the entire projected Social Security shortfall. So giving in to Republican demands would mean risking a major fiscal crisis — a crisis that could be resolved only by making savage cuts in federal spending.

And we’re not talking about government programs nobody cares about: the only way to cut spending enough to pay for the Bush tax cuts in the long run would be to dismantle large parts of Social Security and Medicare. ...Paul Krugman