And Mr. Obama is sticking by his request for additional upfront spending on infrastructure and an extension of expiring unemployment benefits. He would also secure some tax and policy changes long sought by both parties but unattainable in the context of smaller budget deals. His proposal would permanently extend popular business tax breaks like the credit for corporate research and development, permanently stop the expansion of the alternative minimum tax so it does not affect more of the middle class, and stop a long-planned and deep cut to Medicare health providers, which Congress has never had the stomach to allow to kick in. [New York Times]
PRESIDENT OBAMA has got to be kidding, but no one is laughing so he’s obviously not. If congressional progressives in the Democratic Party suck what’s being reported down they’ve joined the feckless tool rank of the political establishment.
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.
On stimulus, unemployment insurance will be extended, as will the refundable tax credits. Some amount of infrastructure spending is likely. Perversely, the payroll tax cut, one of the most stimulative policies in the fiscal cliff, will likely be allowed to lapse, which will deal a big blow to the economy.
As for Pentagon cuts, they’re hidden under a unicorn in an addendum you’ll find after a wild goose chase.
Okay, so it’s not that opaque. Obama’s new deal calls for $100 billion in defense cuts, while his cave on Social Security is $30 billion more than that.
See Dean Baker’s post on the chained CPI if you don’t believe me.
But Speaker Boehner is still not happy, according to an email sent to Sam Stein of Huffington Post.
Any movement away from the unrealistic offers the President has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced. We hope to continue discussions with the President so we can reach an agreement that is truly balanced and begins to solve our spending problem.
That was after President Obama offered to go from the $250,000 ceiling to a permanent tax cut for families making under $400,000 instead, something over which I won’t quibble.