According to CBS Biden and McConnell have worked out a deal.
This could still get rejected by the House... possibly, but doubtfully the Senate. So let's take a look and see to what they've agreed.
Again, according to CBS... "Here are the known details of the deal:"
Tax rates: current tax rates will be extended for all wage earners making below $400,000 and couples making below $450,000.This constitutes concessions by both sides. Republicans don't want taxes to go up ever and Democrats wanted the brackets lower at $200/250k. Democrats could have had this after Jan. 1 and Republicans could have had squat. But Democrats would have had to see taxes go up for everyone and Republicans would essentially have had to vote for a tax cut on just the lower brackets or explain why they are hypocrits and consequently lose at the ballot box next time around.
So Democrats had the winning hand here and conceded something to Republicans while Republicans really didn't concede anything they had a real grip on in the first place. So the question is what did Democrats get in return? I'm actually ok with the cut off point moving up as long as we got something good in return.
The automatic spending cuts under the sequester will be delayed for two months. The cost of continuing current federal spending levels will be offset by revenue increases and some spending cuts. The spending cuts will come half from defense and half non-defense accounts.Two months? What the fuck is that. This is a serious loss for Democrats and has me seriously scratching my head and worrying about what happens in the "next deal." What will Democrats have as their bargaining chips when House Republicans have the debt ceiling and now sequester as well. Obama is talking tough about not negotiating the debt ceiling again and perhaps he'll stick to that but this seems like a huge loss of political leverage... so what did Democrats get in turn for it? So far it seems Democrats have given two items, one big (two month sequester extention), one small-to-medium (tax cut-off point).
Democrats see this deal as a victory because Republicans had objected to using any new tax revenue to offset the loss of sequester spending cuts, reports Garrett.But that strikes me as a salesmans talking point. Republicans didn't have any leverage on tax revenue.
The estate tax: it was set to increase from rom 35 percent to 55 percent in 2013. Instead, the compromise sets the new rate at 40 percent with the first $5 million worth of property exempt from being taxed.The $5 millioin exemption is smaller then I read reported earlier and I'm ok with that but the rate strikes me as considerably lower then it should. Again it seems like a mild compromise on our side but then if Republicans sign off on it the estate tax will increase so a mild compromise on their side too.
Capital gains tax: Capital gains and dividend tax rates will increase from 15 to 20 percent.Any increase on capital gains is good and I'm guessing neither side really wanted to see this go up much. We the People would probably love to see it increase much farther (like to normal income levels) but I doubt we ever really had a chance at that. So 5% is more than it is now... but damn! 35% would have been better.
Alternative Minimum Tax: a permanent fix to the tax that would hit middle class familiesThis is very goodness... but it seems like it should have been part of normal bi-partisan governing. A broken AMT would serve no one at all.
"Doc Fix": doctors will be shielded from a massive reimbursement gap for treating Medicare patients.This too is goodness but also part of normal bi-partisan governing. Republicans have used it as leverage so I guess they are giving up something here by removing a threat to break Medicare. So perhaps a small win for our side.
Unemployment benefits: unemployed workers will receive their benefits which expired over the weekend.This one is huge for us. UI is incredibly important for the people involved and for economic health. This is one of the few reasons I have hesitated to urge going over the "fiscal cliff." It doesn't say how long they are extended... just as it doesn't say if the doc fix is a permanent one or temporary. It does say the AMT fix is permanent which makes me worry these other two are temporary ones we'll have to fight over later.
Renewable energy tax credit: the tax credit for renewable energy companies will be extended for another year.This too is good and something the Republicans are giving up. But only one year? This is something that should be long term policy until renewables are at least on an equal footing with fossil fuel.
So I know a lot of folks are hard on Obama about his negotiating and a lot of us lefties are hard on him for not fighting the right wing harder. I spent the evening watching the movie "Bobby" that Emilio Estevez wrote and produced about Bobby Kennedy. It is mostly about the lives of some of the other people in the hotel that day but it does a good job evoking the division of those times. I looked at and heard RFK's speeches intermixed with it and realized that perhaps the division we see today is the norm for our country and that in fact it is those times of bi-partisanship and commonality that are the exceptions. I don't know. I look at the divisions we face and wonder at how we overcome them.
I believe Barack Obama meant it when he said he wanted to set a new tone in Washington and that he wanted to heal the divisions and bring us back together. We see him trying... and failing... and get frustrated. The other side has no interest in working with him or in healing the divide. Many of us on the left have no interest in seeing him work with the radical right. We want to defeat those bastards. They need defeating and we see that as the best path to improving our country and healing the divide.
Obama has learned some lessons and is playing the game harder. I don't think we give him credit for the fights he fights every day in his job. I want him to fight harder and I look at this deal and think he gave up too much... two months 'til we fight this fight again?!?! WTF?!?!?... but I also see that most of the deal are things we wanted not the other side. I think he could have and should have held his ground firmer but I'm not sitting at those negotiating tables either.
This deal is not bad. Not as good as I would have hoped but not bad. We got a lot of good things in this deal. But I worry a great deal about the next one because I think the other guys will have a stronger hand in two months then they did today.
On the other hand... let's see if the House passes this tomorrow. They might not. But it is 2013 tomorrow so this will be a tax cut package and not a tax hike package. Fucking hypocrits.
I think Josh Marhsall's comments at TPM are right on target:
All the arguments about Obama caving and being a bad negotiator and all the rest leave out one simple and fairly sufficient factor — Obama really wants a deal. That means more than it sounds like it means. He doesn’t want a deal at all costs. That greatly overstates it. But a deal to some real degree for the sake of finding common ground and having a deal is a big consideration for him. That’s not my personal disposition or the way I meet the world. But it is his. And once you get that, the storyline starts to make more sense.Exactly right. If Boehner and McConnell came away from this experience thinking Obama caved then we're in trouble. But if, as I suspect, they came away realizing the balance of power has shifted and they can no longer extract whatever they want from the Preident... and... Obama holds his ground on not negotiating on the debt ceiling then this deal starts to look a whole lot better. The deal, as an isolated entity, is not bad. It is the question of how this sets us up for the next deal two months from now that is potentially bad.
As I noted before — in this post and the one from this afternoon — it all comes back to the debt ceiling. He says that’s not negotiable. That’s exactly the right position. But it’s much much easier said than done. Whether and how he’s able to pull that off will tell us everything about whether or not this deal made sense.
Right on the heals of the last update... from TPM:
he Senate passed legislation to avert the fiscal cliff early Tuesday morning on a bipartisan basis. The final vote was 89-8.Personally I think those numbers signal that the House will pass it as well and that this is a done deal.