JoshM.-TPM: 'This isn’t a bad deal at all, if you accept that some give and take was necessary'

[bigtree]

____ The big thing that’s sticking in the collective craws of many progressives is moving the top rate from $200k/$250k to $400k/$450k for individuals/joint filers. I said on Twitter earlier this morning that that sounded to me like a mistake too. Most other sweeteners are temporary. But rates are permanent, if not quite forever. And you’re never going to get a better chance to pick your price point, for lack of a better word, than now when they’re defaulting back to the Clinton-era rates. So permanent concessions that will be quite difficult to reclaim in exchange for temporary gains.

That said, the difference between putting the top rate at those two different points amounts to something on the order of $90 billion dollars over ten years. So this presumed deal gets you just over $600 billion in new revenue and keeping the rates at $200k/$250k would have gotten just under $700 billion over 10 years.

The White House believes it was more important to keep the top rate at 39.6% for the mega rich than to worry about exactly which income level they kicked in at. They also make the more practical point that there was always significant resistance among Senate Democrats to going back to the $200k/$250k threshold. And it’s worth noting that Sen. Schumer and others routinely bumped this number up to $500k or even $1 million during earlier debates.

Make of it what you will. I think it represents a significant concession but the actual amount of lost revenues is a bit less than I had assumed . . .

On top of this, the presumed plan includes a lot of what I call RPS, ‘Real People Stuff’. There’s an extension of Unemployment Insurance and a five year extension of various Stimulus Bill-era refundable tax credits and pay-outs focused on low and middle income people or businesses that employ them These are tangible in terms of the lives of a lot of people and they also have a stimulative effect in what remains and will continue to be a bruised economy.


read more: http://talkingpointsmemo.com/archives/2012/12/taking_stock_of_the_supposed_deal.php

[ProSense]

1. But:

Why does this matter? Because the snap-back of the Clinton-era tax rates was the big cudgel the White House held over the Congressional GOP. And this basically closes the books on the tax rates issue. So, on its own terms, this deal looks relatively decent. But if it means the President has to concede to massive cuts to Medicare and Social Security or other critical spending in a month or two because he now lacks critical leverage then it would be a pretty bad deal indeed.

So, decent deal but with a massive asterisk. And we may not know what that asterisk means until February.

This is the problem everyone is concerned with.

AFL-CIO's Trumka opposes deal that 'sets the stage for more hostage taking'
http://www.democraticunderground.com/10022106490

McConnell's gambit
http://www.democraticunderground.com/10022105222

Krugman: Conceder In Chief?
http://www.democraticunderground.com/10022104768

It's the reason Senate Democrats are holding out.

Everything You Need To Know About The Emerging ‘Fiscal Cliff’ Tax Compromise

By Travis Waldron

Senate Minority Leader Mitch McConnell (R-KY) and Vice President Joe Biden have reportedly reached an agreement that would solve the tax side of the debate over the so-called “fiscal cliff,” the package of tax increases and spending cuts that will begin automatically at midnight tonight.

Senate Majority Leader Harry Reid (D-NV) and the Democratic caucus have not yet indicated support for the compromise, which extends most of the Bush tax cuts and other tax provisions, and while the Senate may vote tonight, no vote is expected in the House before tonight’s deadline. Here is a breakdown of the different provisions of the reported compromise:

<...>

The reported McConnell-Biden compromise does not deal with the spending cuts side of the fiscal cliff, though CNN’s Dana Bash reported that the sequester may simply be delayed for two months. The spending cuts are the part of the fiscal cliff that the Congressional Budget Office says would be the most damaging to America’s economic growth. It also does not include an increase in the debt ceiling, setting up another fight over the coming months like the one that created the fiscal cliff in the first place.

http://thinkprogress.org/economy/2012/12/31/1381631/everything-you-need-to-know-about-the-gops-fiscal-cliff-tax-proposal/

[plethoro]

3. What you said in your first highlighted text is

what's going to happen. Locking in the tax increases was a terrible idea.

[bigtree]

4. ha!

Either the leverage is the election results, or the leverage is what you describe.

Is that really the limitation of the President's leverage; the tax cuts? It seems that the President is politically omnipotent, for some, only up and until he makes a deal on taxes. Is there really no argument to be made on behalf of preserving and enhancing social safety net programs on their own merit? I think your complaints are premature, short-sighted, and an amazingly cynical and defeatist measure of the political influence of this presidency.

One other thing . . . There is a serious disconnect in hair-on-fire advocacy on behalf of folks affect by changes in future SS benefits and being so blithe about the effect of sequestration. Certainly, both scenarios can be addressed at any time to protect 'vulnerable' or the vast majority of working Americans from the consequences of the budget-cutting directives.

Yet, sequestration is treated by some critics of this reported 'deal' as some abstraction. We do have more leverage right now in budget-cutting dealing than we will when the base line drops to the floor in sequestration. But that's not accounting for the rest of the reductions that occur for average-income Americans which are protected and enhanced in this deal.

Those can't be used for future hostage-taking if this deal advances. Keep them up in the air, and they'll definitely be used as political footballs in the deficit reduction squabble.

[BeyondGeography]

2. Many people here were ready to slam Obama the second he moved an inch

$9 billion/year is moving an inch. Calm down already.