Talk to smart folks in Washington, and here’s what they think will happen: The final tax deal will raise rates a bit, giving Democrats a win, but not all the way back to 39.6 percent, giving Republicans a win. That won’t raise enough revenue on its own, so it will be combined with some policy to cap tax deductions, perhaps at $25,000 or $50,000, with a substantial phase-in and an exemption for charitable contributions.And of course, that prediction set off the expected rounds of pre-emptive poutrage.
The harder question is what Republicans will get on the spending side of the deal. But even that’s not such a mystery. There will be a variety of nips and tucks to Medicare, including more cost-sharing and decreases in provider payments, and the headline Democratic concession is likely to be that the Medicare eligibility age rises from 65 to 67.
We have no way of knowing who those "smart folks in Washington" are that Klein talked to. But I - for one - have to question their intelligence. That's because there is NO WAY that this is the sum total of a deal.
What those "smart folks" are forgetting is that there is more on the table to this so-called "fiscal cliff" than the expiration of the Bush tax cuts. There's also $1.2 trillion in spending cuts that kick in on January 1st - half of which hit defense spending. There's no mention of what would happen to all of that in this supposed "deal."
And what about all those other things President Obama had in his proposal...everything from extending unemployment benefits to more stimulus spending to ending the use of the debt ceiling as a hostage-taking strategy?
Perhaps those "smart folks" expect that President Obama would agree to give in to Republican demands to eliminate the cuts to defense spending - all while giving in on a lower tax rate for the wealthy AND lowering the age of Medicare eligibility AND giving up on all of his other proposals. But that would be stupid. And this President is anything but stupid.
Now, the poutragers will claim that this is likely because it would fit their frame of a President who caves. But we've already busted that meme.
The only way those items Klein mentions would be included in a deal President Obama agreed to would be if he got MUCH more in return.
So much for the "smart folks."
Thanks SP, I got tired of all the pre-emptive whinning. PBO has already stated that he isn't compromising on the tax rates.
ReplyDeleteebogan63
Wasn't Ezra wrong on his prediction about the unemployment number? Sigh, Pres Obama said he wasn't cutting benefits and I believe him. Frankly, his record over the past few years prove his words. And why oh why is he never given credit for protecting Medicare and SS from the Sequester? Anyone truly wanting to put a shiv in those programs later would have made it easier by putting them in play in the sequester when Obama was at his lowest power politically. Yet, he didn't and now he and the Dems have maximum leverage because he won. So the pundits can go have a seat. Obama said he wouldn't cut benefits and I believe him. I'll take Obama's word and record over theirs any day.
ReplyDeleteExcellent point about how Obama protected entitlements in the sequester.
DeleteAnd yet the poutragers are still going, "But it was on the table! BETRAYAL!"
DeleteNo brains.
This smells a lot like a trial balloon to me.
ReplyDeleteIf so, the question is: a trial balloon by which side?
DeleteI think the better question is: why is Ezra even floating this trail balloon? Which side is he on, exactly? He's certainly been talked about a lot for a permanent MSNBC hosting gig. Who is going to watch him if he's doing Paul Ryan's dirty work?
DeleteWhen you're talking about the difference between 39% and 35% or some number in between, it's all about which side can claim victory isn't it? What we should be talking about is a top marginal tax rate of 90% as we had under Eisenhower, or perhaps a top marginal tax rate of 70% as we had under Nixon, or maybe a top marginal tax rate of 50% as we had under Reagan. Once we went below that, which happened in 1986, when Congress made the kind of deal a lot of people are talking about again, where we lower rates but limit deductions, we started playing on the opposition's side of the field.
ReplyDeleteSo now, Klein is tweeting that he's not speculating. Whatever.
ReplyDeleteebogan63
My prediction based on who I believe the president to be and what I say in his first 4 years:
ReplyDeleteIn the end taxes on the rich will go up and the president will cut a deal that doesn't impact safety net benefits for the 98%. It will be brilliant in that it will remove scare tactics over the safety net as a viable republican strategy for decades. The handful of folks on the whiner left who were dead wrong about the president's 1st term strategies that are paying off huge right now will freak out and be wrong about the safety net strengthening adjustments too. Regardless, the result will be that the GOP is without any talking points or real success for a long time to come as the safety net remains in tact and a new progressive era in America begins.
We're probably gonna have to wait and see with regard to specific safety net adjustments. It won't be SS and it won't be on the backs of the middle class or working poor. It will be more progress in undoing the shifting of all of the wealth in the country to the top. The last 30 or so years need reversed if we're to have a sustainable economy. The big picture is to put a premium on greed in the form of a feedback loop to the middle class so that there is enough expendable income to keep demand high and unemployment low (resulting in wages no longer stagnating).
Thank you, Smarty. No one with a brain would've said what Klein said. Maybe he needs to go back to school. It doesn't make sense unless you're trying to demoralize certain people. There's no way any politician worth a damn would give away his leverage.
ReplyDeleteVic78
I know I'm late to the party, here, but Klein needs to understand that those "smart folks in DC" he talked to are behind the curve. DC still hasn't caught up with the rest of the country.
ReplyDelete