With 14 hours to go (WTF?)

[ProSense]

With 14 hours to go

By Steve Benen

By the time Senate Minority Leader Mitch McConnell turned to Vice President Biden as his new negotiating partner, one thing was clear: Senate Majority Leader Harry Reid had simply run out of counteroffers. Democrats had gone as far as they could go, and Republicans weren't willing to say, "Yes."

Just how far had Reid gone in making concessions? For one thing, the income threshold for higher rates was moved up from $250,000 to $400,000 (or depending on which insider account you believe, $450,000). For another, Democrats had also largely caved on estate taxes, raising the eligibility threshold and accepting a lower rate.

Both of these concessions, it's worth emphasizing, would mean far less deficit reduction -- the ostensible point of this exercise. The tradeoffs are a reminder that when Republicans say they're desperate to address the debt, they really don't mean it. Democratic proposals do far more to reduce the fiscal shortfall than GOP alternatives -- and Republicans are the ones who pretend to see a "debt crisis."

As if this weren't enough, Democrats were also offering to accept these terms without a debt-ceiling increase. Instead, all Dems would get in return are measures that have traditionally enjoyed bipartisan support: middle-class tax breaks, extended jobless aid, and temporary fixes on AMT and Medicare reimbursement rates.

Democrats are even prepared to postpone the sequester, a policy Republicans say they're desperate to avoid.

- more -

http://maddowblog.msnbc.com/_news/2012/12/31/16267612-with-14-hours-to-go

[Takket]

1. NO WAY!!!!!!!!!!!!!!!!!!!!!!

Go off the Cliff so the cuts and tax increases are in place, then pass the middle class tax cut back to where it was in 2012.

Republicans are dictating everything!!!!!!!!!!!!!!!!!!!!!!!

[Squinch]

2. +!!!!!!!!

[alcibiades_mystery]

10. Republican said: NO TAX RATE INCREASE, EVER!!! Now they agree to tax rate increase

They said "ONLY ON $1,000,000 income!!!"

Now they're agreeing to between $400,000-$450,000.

They said "It must come with entitlement cuts!!!!"

They've given up on that.

But they're dictating everything? Because Dems went up on rates from $250,000 to $400,000? And Dems will probably also get a capital gains rate increase to 20% on those making over $250,000?

Dems said "No tax increases under $250,000." In this deal, they are getting that. They said "The wealthy have to pay more." In this deal, they're getting that twice, on both the rate for $400,000 and above (even at $450,000, it's about $1 trillion in revenue), and on capital gains, if we get that (another several billion in revenue from the top 2%). And unemployment extension?

But Republicans are dictating everything?

Jeez Louise.

[Cali_Democrat]

3. It appears as if Obama lost the 2012 election

and Mitt Fucking Romney was victorious.

Snatching defeat from the jaws of victory once again.

[boxman15]

4. I'd wait until Jan. 4 to negotiate again.

I don't know why they're not doing that, but it is what it is. That being said, the deal itself isn't all that bad. It still raises about $1 trillion in revenue through taxes and extends unemployment insurance in exchange for practically nothing. A "cave" as HuffPo would call it would be suddenly agreeing again to chained CPI or a Medicare eligibility age raise. That's not happening.

This won't pass, though. Boehner doesn't have it in him to bring it to the floor, at least not without some major changes.

[Recursion]

5. Matt Yglesias has had some pretty good posts about the conceptual problem here

Once we set up the sequester, the logic behind a grand bargain disappears: there's no longer a problem it solves.

I'm not a deficit hawk by any means (I'm with Krugman in thinking that the notion of a "bond vigilante" is pretty silly) though I'd like to see Medicare more securely funded than it is. Still, the sequester for all intents and purposes solves the deficit "problem" indefinitely (and even I don't want to see an annual deficit at half of GDP during peacetime, for instance). So, any "Grand Bargain" deal is going to be something that decreases the deficit by less than current law. Which means that a grand bargain in the name of deficit reduction simply isn't going to work.

[ProSense]

7. Exactly, it comes down to protecting the rich and wasteful military spending.

If this were truly about the deficit, they would be aiming for an equal amount or more in deficit reduction, not less.

Ugh!

[abelenkpe]

11. +1000 nt

[PoliticAverse]

6. It all comes down to who really wants to avoid the 'cliff' more... n/t

[alcibiades_mystery]

8. If we get $450,000 and 20% capital gains on $250,000, that's a good deal

This is a very pessimistic assessment of what's shaping up as a significant Dem victory. Does Benen even mention the 20% capital gains increase on $250,000 and above, like all the other descriptions of this deal, or does that sour his favorite narrative?

[Cali_Democrat]

9. Then we delay defense and other cuts

and we hit the debt ceiling in the next few weeks, the GOP will have all the leverage...GOP demands massive guts to medicare, medicaid, social security and Obamacare or the economy gets it. Dems cave.

Any fiscal cliff deal needs to raise the debt ceiling or we see the same 2011 movie in early 2013.

[alcibiades_mystery]

12. I think we can stand and fight them again on that in a few weeks

We're beating their pants off right now, why wouldn't we in a few weeks? Because Moody's will downgrade? That was the threat last time. There will be no debt ceiling deal in the next few hours. If, however, there is a deal that pulls $1.2 trillion in revenues from the top 2% and even reverses 30 years of losses on capital gains - all while making NO CUTS to social programs, that's a win. Obviously, it's a temporary win and we'll be fighting again soon, but that's nothing to be afraid of. We fight and win now, and we fight and win in January.

Sometimes, you have to be willing to win a small battle now and again. Or you have to be willing to see step-wise victories in a long campaign rather than complain that all is not won.