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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).

CBS says...

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 families
This 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.

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.

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.


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.
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Comment Preferences

  •  Tip Jar (17+ / 0-)

    "Do what you can with what you have where you are." - Teddy Roosevelt

    by Andrew C White on Mon Dec 31, 2012 at 08:28:27 PM PST

  •  All those nice things... (1+ / 0-)
    Recommended by:
    Calamity Jean can bet the Rabid Racoon Republicans in the House will say no.

    Float like a manhole cover, sting like a sash weight! Clean Coal Is A Clinker!

    by JeffW on Mon Dec 31, 2012 at 08:34:02 PM PST

  •  There are no deals (4+ / 0-)
    Recommended by:
    itskevin, tytalus, MRA NY, Andrew C White

    until the final handshakes -- aka, votes in 2 chambers.  Sometimes negotiations for deals reflect that the seeming "loser" hand is the winner because the other side folds.

    It is 11:33 p.m. as I write this comment.  Let me know when the votes are finished in both chambers and the President signs.  The "cliff" is less than 1/2 hour away and the House is at the bars or in bathroom stalls.

    " My faith in the Constitution is whole; it is complete; it is total." Barbara Jordan, 1974

    by gchaucer2 on Mon Dec 31, 2012 at 08:34:55 PM PST

    •  Yeah, I don't count this as a (0+ / 0-)

      done deal at all. But it is what is being reported as "the final deal" at the moment so it is worth looking at as objectively as possible. And as someone else commented, I have no doubt Boehner had the deal or parameters of it run by him before they announced they had a deal. Whether he can deliver of course is an entirely different story but it is 2013 now so it's all tax cuts from here on out.

      "Do what you can with what you have where you are." - Teddy Roosevelt

      by Andrew C White on Mon Dec 31, 2012 at 10:26:52 PM PST

      [ Parent ]

  •  asdf (3+ / 0-)
    Recommended by:
    defluxion10, blueoasis, RFK Lives
    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.
    The story of this presidency.
  •  I don't love this deal. (10+ / 0-)

    I have real concerns.  But ...

    Two thirds of this site has absolutely left the planet and is descending into utter batshit insanity.

    I imagine that Free Republic is a mirror image of this right now.

    •  Don't think its two thirds the site (4+ / 0-)

      But probably a faction of 200 or so.  Same 50 people keep flaming supporters.

      If at first you don't succeed, vote Teapublicans out and try again. You have to be persistent if you want anything out of life.

      by Final Frame on Mon Dec 31, 2012 at 08:49:04 PM PST

      [ Parent ]

    •  They're vocal, yes. (3+ / 0-)

      I'm in more of a wait-and-see approach, but the Overton window has shifted in key areas here, most notably on how Republicans were forced to debate over how much taxes should go up on for the rich, and at what the starting income level would be.  That represents a decades-long reversal of what had been happening.  And my Green Party friend, who I can assure is to the left of EVERYONE here on this site, even Bernie Sanders (over gun control), was OK with it.

      •  Yes, I agree, we negotiated from a significantly (3+ / 0-)
        Recommended by:
        stevenaxelrod, BruinKid, pamelabrown

        stronger position and I was convinced during the Democratic National Convention that the decades long pendulum swing of politics had started its swing back towards the left and I think this is more evidence of it. The angst I feel is not that we lost but that we didn't win as much as we should have and that we may well lose more in the next battle... but overall the R's on losing right now and the D's are winning... and I think with some understanding that the context of american politics is always in the middle somewhere... the right is losing and the left is winning.

        "Do what you can with what you have where you are." - Teddy Roosevelt

        by Andrew C White on Mon Dec 31, 2012 at 10:32:43 PM PST

        [ Parent ]

        •  Yep. (3+ / 0-)

          I think a lot of the angst is that the pendulum hasn't swung to the left even more than it has, but I think we need to see the bigger picture of how far it had swung to the right thanks to a confluence of factors, and I cannot emphasize just how damaging and destructive the emergence of Fox News has been in shoving formerly fringe right-wing ideas into the mainstream and speeding the pendulum being swung to the hard right over the last decade.

          But like I grimly told my Green Party friend, who agreed with this, we get the government we deserve, because we vote for them.  When over 30% of UNION members vote for anti-union Republican governors and state legislatures, something's gone horribly, horribly wrong.

          And while there's much to be said for gerrymandering and the will of the people, let's keep in mind well over 58 MILLION Americans voted for the Republican in House races this year.  Those 58 million Americans are the reason we're as fucked as we are.  Forget what we can do on our side in terms of getting new voters from whatever groups, but as for those people, either we change their minds, or wait for them to die off.

    •  My experience over the years is that, yes, (1+ / 0-)
      Recommended by:

      when we hate a deal like this our counter parts tend to hate it as well. I don't hate the deal. If this was all there was to it then it wouldn't be all that bad an actual compromise.

      But that... let's do this dance again in two months when the R position is stronger and the D position is weaker... part has me not particularly happy.

      "Do what you can with what you have where you are." - Teddy Roosevelt

      by Andrew C White on Mon Dec 31, 2012 at 10:29:17 PM PST

      [ Parent ]

      •  Not sure we'll be weaker. (2+ / 0-)
        Recommended by:
        remembrance, pamelabrown

        Repubs conceded things that were very important to us, especially unemployment insurance. Moreover, there will be more and better Dems in both houses in the next Congress.

        •  Meaning to say that (1+ / 0-)
          Recommended by:

          the tax increases being the default position meant we were negotiating from a position of great strength on that issue. That won't be there in 2 months. Instead the Boehner will be negotiating from a position of the White House needing him to pass a debt ceiling increase. That improves his hand and weakens Obama's no matter how hardball Obama plays it.

          And while we will definitely have a strong Senate and mildly stronger House Boehner will still be Speaker so it is not going to be strong enough.

          And UI is now done. We won that which is incredibly important but that will be old history in 2 months. As will tax rates be unless as someone said above a deal was struck about matching future cuts with revenues. If that is true then yes, we will be in a strong negotiating position... but I find it hard to believe at the moment that he managed to get that out of them.

          "Do what you can with what you have where you are." - Teddy Roosevelt

          by Andrew C White on Mon Dec 31, 2012 at 11:03:53 PM PST

          [ Parent ]

  •  "Boehner is between a rock and a (0+ / 0-)

    hardaward place". That's what happens to idiots.

    I was wise enough to never grow up while fooling most people into believing I had. - Margaret Mead

    by fayea on Mon Dec 31, 2012 at 08:45:49 PM PST

  •  it it true that (1+ / 0-)
    Recommended by:
    Andrew C White

    the two sides agreed that future cuts in spending need to be offset by revenue increases at a 1:1 ratio?  I've been hearing this and I'm having trouble confirming it.  

    •  I think Boehner publicly said that's what (0+ / 0-)

      he wanted in the grand bargain talks he was having with the president last month.

    •  I don't know but if that is what they were (0+ / 0-)

      referring to in this comment that I poo-pooed above

      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.
      Then that would be a significant victory that would alter my perception of this deal and improve my concerns about only getting a two month delay in dealing with the sequester business. If future spending cuts are accompanied by matching revenue increases then that is a HUGE victory but I find it hard to imagine that is the case. But now I'll have to go looking to see if that is what they are saying.

      "Do what you can with what you have where you are." - Teddy Roosevelt

      by Andrew C White on Mon Dec 31, 2012 at 10:56:54 PM PST

      [ Parent ]

  •  A good, fair analysis (5+ / 0-)

    One thing to keep in mind: you note that we dont want Obama working with the radical right. I imagine he doesnt either.

    But they control the House. Now that doesnt mean he should cave. But it also means, he isnt going to get everything he wants, and that he can get what he wants simply by "fighting" or "using the bully pulpit."

    •  Whether we like it or not (4+ / 0-)

      the Republicans are in control of the House and have a say in the Senate. They also retain a significant following in the country regardless of how bad we beat them on election day. We've no choice whatsoever about dealing with them.

      However, I think Obama truly does want to work with them. I don't mean any crap about him being a rightie himself but that he truly believes what he says when he said he wants to bring people together and get people on the right and left working together. It is an admirable goal, an idealist goal, But I am not at all sure it is a realistic goal and that it consequently is one that leads him to be weaker at the negotiating table then he might otherwise be if he were not such an idealist.

      "Do what you can with what you have where you are." - Teddy Roosevelt

      by Andrew C White on Mon Dec 31, 2012 at 10:37:16 PM PST

      [ Parent ]

      •  hmm, on that, we disagree (0+ / 0-)

        I dont think he has a the intense dislike of conservative that many here have, or wish he had.

        But I dont think he believes in bipartisanship just for the sake of bipartisanship, contrary to what many think.

        He wouldnt have passed a healthcare bill solely with Dem votes if he did.

        There is plenty of legitimate criticism of his negotiating style, but I think many here swing too much to the extreme, and forget some on the ground realities. In his first two years for example, you had a significant number of conservative Dems who need to approve anything, in addition to he near unanimous opposition from the GOP.

        •  That's not quite what I meant (0+ / 0-)

          not bi-partisanship for the sake of bi-partisanship. But when he got elected he talked about setting a new tone in Washington and trying to get people to work together. I think he is truly idealistic that way and that he sees the best thing he could do in his Presidency is to end the divide between right and left and get the country and government functional again.

          I see it as idealism not some sort of Broderism. And frankly if he could get right and left working together it would be the best thing he could possibly have done... ain't gonna happen... and I think he wastes too much effort on it sometimes... but I do think he keeps that dream as a guiding principle and at times it weakens him. But he not weak nor is he blind to reality. He'll do what he needs to do to get the job done as best as he can against great odds.

          But I think he truly wants to bring people together.

          "Do what you can with what you have where you are." - Teddy Roosevelt

          by Andrew C White on Tue Jan 01, 2013 at 02:50:46 PM PST

          [ Parent ]

  •  Mostly it sounds like steps in the right direction (6+ / 0-)

    To me the dollar value on the tax increase is not as important than setting the precedent that taxes can go up and don't forget that ObamaCare has a new high earner tax starting Jan 1st so the total tax increase on the rich is higher than it appears.

    Most important big picture is this enough to keep the economy growing?  Is it enough to support job growth and encourage the recovering housing market?

    What is the impact of Republican governors refusing to expand Medicaid?  Does that count as "spending cuts"?

    “The future depends entirely on what each of us does every day.” Gloria Steinem

    by ahumbleopinion on Mon Dec 31, 2012 at 09:30:36 PM PST

    •  I think it is enough to keep the economy (2+ / 0-)
      Recommended by:
      stevenaxelrod, remembrance

      moving in the right direction. Revenue has gone up. Unemployment insurance has been continued (that is a big one). The middle class is not about to get hammered by a tax increase. I think this is all goodness.

      My concern is what about the next deal. This deal if fine by itself but it sets up the next deal and that one may be more harmful.

      Like you, the tax income cut off point is far less of a concern for me other than its usefulness as a bargaining chip and he did not get as much for it as I would have hoped but it really doesn't phase me that it is set at 400/450k rather than 200/250k. The folks earning in that range may be doing quite well but they are not the ones sitting on millions and billions that need to get taxed and circulated. That is why I wish the capital gains and estate taxes had been higher too.

      My understanding is that the federal government steps in where individual states decide not to take various steps to implement the new healthcare law. I'm not that familiar with the details on the ACA though but I am fairly certain any cost savings there won't be considered spending cuts.

      "Do what you can with what you have where you are." - Teddy Roosevelt

      by Andrew C White on Mon Dec 31, 2012 at 10:46:06 PM PST

      [ Parent ]

  •  Thanks, Andrew, for a piece by piece (9+ / 0-)

    rational description.  And thank you for bringing up Bobby Kennedy and the division of those times.  Those were my times, and I remember them well.  I also vividly remember what happened to Bobby, and frankly, I think the howlers here on the left who call the President a "traitor" and an "utter failure" who "needs to grow a spine" might want to remember the murderous hatred of those who oppose him.  I worry for his safety every day, and even amidst the leverage he'll lose if this deal passes, I still salute him for waking up each day and fighting the good fight against such people.

    BTW, I think UI is a yearlong extension.

    Happy New Year, Andrew, from a neighbor in the Capital District.

    "Why reasonable people go stark raving mad when anything involving a Negro comes up, is something I don’t pretend to understand." ~ Atticus Finch, "To Kill a Mockingbird"

    by SottoVoce on Mon Dec 31, 2012 at 09:41:11 PM PST

    •  Happy New Year to you as well (3+ / 0-)
      Recommended by:
      KenBee, SottoVoce, FiredUpInCA

      I was just a young child during RFK's days but he was my first experience with electoral politics. I was 7 in 1968. I shared a bedroom with one of my older brothers. I think he must have 14. He volunteered for RFK's campaign handing out stickers and pins, etc. He came home and put an RFK bumper sticker on our bedroom window and I remember asking him what that was all about. I also remember both MLK and RFK being assasinated. In a way that was my introduction to politics.

      I think you are right about UI but it didn't specify it in the article.

      I think the negative comments about Obama are overboard and show an unrealistic view of reality. I think he is a good man doing the best he can. But as I said to my girlfriend as we talked about the movie this evening and I painted the parallels to todays divisions... I don't think any one man can change it all. It would have made for a very different world had Kennedy lived to become President instead of Nixon but even he couldn't have healed the divisions by himself and neither can Obama.

      "Do what you can with what you have where you are." - Teddy Roosevelt

      by Andrew C White on Mon Dec 31, 2012 at 10:52:33 PM PST

      [ Parent ]

  •  NYT is reporting that Reid promised (1+ / 0-)
    Recommended by:

    Senators that this would include a fix for the dairy price problem created by the House not passing the farm bill. Unclear to me from the wording of the article if this means it was in the bill just passed by the Senate or another separate bill.

    NYT also quotes Boehner as saying...

    [the House would] “honor its commitment to consider the Senate agreement if it is passed. Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members — and the American people — have been able to review the legislation.”
    Which means this ain't over yet.

    "Do what you can with what you have where you are." - Teddy Roosevelt

    by Andrew C White on Mon Dec 31, 2012 at 11:27:21 PM PST

  •  About the permanent AMT fix (1+ / 0-)
    Recommended by:
    Andrew C White

    And this is significant.  The AMT is going to be linked to inflation, but will it be linked to the CPI or to the Chained CPI?

    Perhaps the political class has just fallen victim to the Law of Unintended Consequences??

    Of course, all is predicated on The Boner being able to herd his cats into line.

    •  That's a good question (0+ / 0-)

      and I don't know the answer... though that is one I will look for in todays new stories about it. Since the Senate passed the legislation that means it is hard coded somewhere.

      As for the House... given an 89-8 passage in the Senate I think it is a done deal in the House. Worst case scenario for Boehner is that the Democrats pass it with a handful of Republican votes. Best case (for Boehner) is a bi-partisan vote of most Democrats and most Republicans with a handful of defectors on the far right and the far left.

      "Do what you can with what you have where you are." - Teddy Roosevelt

      by Andrew C White on Tue Jan 01, 2013 at 07:46:51 AM PST

      [ Parent ]

  •  Unfortunately, Grover won BIG (0+ / 0-)
    Conservative lobbyist Grover Norquist, whose Americans for Tax Reform group pushes candidates to sign a pledge never to raise taxes, said the plan "right now, as explained" would preserve most of the Bush tax cuts and wouldn't violate his group's pledge.
    "Take the 84% of your winnings off the table," Norquist told CNN. "We spent 12 years getting the Democrats to cede those tax cuts to the American people. Take them off the table. Then we go back and argue about making the tax cuts permanent for everyone."
    But Robert Reich, who served as labor secretary in the Clinton administration, said the $450,000 threshold "means the lion's share of the burden of deficit reduction falls on the middle class, either in terms of higher taxes down the road or fewer government services." In addition, he said, the plan does nothing to raise the federal debt ceiling just as the federal government bumps up against its borrowing limit.

    The status quo is that the Clinton tax rates are now in effect; this deal is a multti-trillion, permanent tax cut, as Armando explains, in exchange for temporary palliatives.  The US is undertaxed: the present deficit is due to the lowest revenue as a % if economy in generations.  This deal locks in low rates for the middle class and much of the upper class, when we need to be spending MUCH more on public provision, expecially clean energy investments.
    We do need a stimulus, which is why Obama agreed to this, but tax cuts are an unfair and inefficient way to create jobs, compared to bailing out states and localities, for example.

    There's no such thing as a free market!

    by Albanius on Tue Jan 01, 2013 at 11:59:05 AM PST

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