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."