Starting last Friday and over the weekend, a variety of sources (notably Ezra Klein
and Jonathon Chait
) wrote that the the emerging deal in the fiscal cliff was coming with a little bit of a concession from the right—a few percentage points tax hike for the rich, instead of a larger one—and a much bigger concession from the left—Medicare eligibility age. That seems to be the gathering consensus of how this is going to go. Consider this Bloomberg story
Lawmakers from both parties are leaving rhetorical room for a split-the-difference agreement with President Barack Obama on a U.S. budget deal. [...]
The top income tax rate could be set at 37 percent or 38 percent, between the current 35 percent and the 39.6 percent rate that will return in 2013 if Congress does nothing. Both parties could accept down payments of revenue and spending cuts in 2013 and overhaul the tax code and entitlement programs next year.
Considering the election results, and how Democrats won that election on the two prongs of doing away with tax cuts for the rich and protecting Medicare, this is pretty weird. Making it even weirder is the fact that by just not negotiating, by stepping off the curb at the end of the year, tax rates would go up to a top rate of 39.6 without
any old people getting hurt.
Raising the Medicare eligibility as nothing more than a political gift to Republicans who will repay it with the nothing other than more demands to privatize the program is a bad idea now. It was a bad idea a year ago and hasn't improved with the passage of time. It's also entirely unnecessary.