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After Senate Majority Leader Harry Reid ran out of enticements to offer Senate Minority Leader Mitch McConnell, the Kentucky Republican turned to Vice President Biden, and the two invested several hours trying to work something out.
At this point, they appear to have the framework for a deal they can live with. Whether anyone else can live with it remains to be seen, but we're getting a look this afternoon at some of the details.
The top tax rate rises to 39.6 percent for individuals making more than $400,000 and families making more than $450,000. Capital gains and dividends will be taxed at 20 percent with the same income thresholds. The Personal Exemption Phaseout (PEP) is set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000. The AMT is patched permanently. The estate tax would exempt estates up to $10 million and tax them at 40 percent above that.
The various business tax credits -- R&D, wind, etc -- would be extended through 2013, as would unemployment insurance. The stimulus tax credits -- namely, the expansions of the Earned Income Tax Credit, the Child Tax Credit, and the college credit -- would be extended for five years, which is hugely important to the White House. The scheduled cuts to doctors in Medicare would be averted through spending offsets that neither side considers injurious.
And, of course, extended unemployment benefits would, as part of the deal, continue until 2013. The package would not include a debt ceiling increase. [Update: In case this wasn't obvious, the payroll tax break would also expire tonight, as scheduled.]
It's worth emphasizing that this isn't the official blueprint, released publicly by negotiators, but rather, leaked details, some of which vary slightly from other reports based on other leaked details. In other words, nothing is written in stone just yet.
One of the key sticking points -- if not the key sticking point -- continues to be the sequestration cuts. McConnell has suggested a three-month suspension, setting up a March showdown over spending and offsetting cuts (followed by a February showdown over the debt limit), but Senate Democrats have said this is entirely unacceptable.
Indeed, it's worth noting that a variety of progressive Senate Dems are increasingly making their voices heard, letting Reid know they believe this deal is too heavily tilted in the GOP's favor. Among those raising concerns are Sens. Tom Harkin, Al Franken, Bernie Sanders, Jeff Merkley, and Jay Rockefeller.
President Obama is scheduled to deliver some public remarks in just a few minutes.
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I'm with the Democratic Senators
This is nuts The Democrats just need to pin them down and inflict enough pain (hopefully serious) to make them say Uncle. Either that or just pave over them which is always an attractive option.
Well - I'm with the American people. And, as dragoon says, this IS nuts.
The Republicans are going to damage this country one way or another. What they want to do is make the Democrats damage it for them.
If they don't do that with this debacle they will do it with the Debt Ceiling. You can bet Obama and the Democrats will cut Social Security at their behest. And if you think that will be the end of the hostage taking you're delusional.
The only way to stop this pathetic dance is to stop negotiating with them. Period.
If Obama signs anything w/o debt ceiling increase, he deserves what he gets next -- the utter scre wing of the US.
I want to add one more thing.
I hear from a lot of Democrats that we need to negotiate a deal to protect those on Unemployment Insurance.
This is a mistake.
This hostage taking will not stop. If you save those on Unemployment Insurance this time then next time it will be the folks on Social Security that are hurt. Or maybe everybody but the rich are hurt if the Debt Ceiling turns into another fiasco.
We, as Democrats have to realize that there will be damage done by the Republicans. The only way we can limit that damage is by putting a stop to this hostage taking as soon as possible. That means now.
Take the hit and make it as painful as possible for the Republicans. And make it clear that we are willing to stare them down every time.
@ this point I have to agree , besides that , this is tantamount to trading a tricycle for a Cadillac , why obama thinks people are brainless enough to buy that concession is beyond me
I'm at the point where I'm so disgusted with Obama that I'd like to see him get embarrassed by Democrats. I wish Al Franken or Bernie Sanders or somebody would filibuster and tell Obama to get a phu king spine.
let's all join hands and go over the cliff. it's still the best situation for the Dems.
relax--whatever they come up with isn't going to fly with the lunatics in the house. once again, we're going to be saved from obama's lack of resolve by republican insanity. i'm sorry its come to that. teddy roosevelt could have had obama in mind when he said of another opponent, "i could carve a better man from a banana."
I agree that there is no way anything is going to get through the House -- at least not until Boehner gets re-elected as Speaker (or not.) If he gets re-elected, he may dump the Haster "rule" -- which is not a rule, just a way of keeping the party together. The GOP is a mess, so might as well save whatever face the rational members have left and cut the idiots loose. ... I may be indulging in wishful thinking.
I am not happy with President Obama and Biden caving on key points, but then I would rather not cave on anything related to entitlement benefits. I do not think that is where the spending cuts need to come from -- but I am aware that that is the only place the GOP wants to look at for spending cuts. I get it. I just think it's wrong to accept the GOP framing on this point. I don't agree that they get any respect for framing this as necessary.
Can we get any compromise without agreeing to cuts in safety nets? I don't know. I don't think we can get an agreement out of the GOP anyway -- even on stuff both sides actually do seem to agree on. Not for a few days, anyway, if at all.
Of course! The left, there for anything not right.
i'm with bernie on this one. just say no.
Couple housekeeping things. Unemployment benefits would continue until 2014, not 2013 (that would be a short patch!) The March showdown would not likely be followed by a February showdown. I'm not good with math, but I think that's backward.
As for content, I'm, totally with the Dem Senators. This doesn't suck as bad as everything else, but we have the upper hand here; PLAY IT!
I disagree. Please refer to my post above. We need to stop negotiating with these crazies.
@Dave, I think we almost agree. What I mean is we should negotiate using the strength we have, not sell the farm for a hockey puck. I'm with you on the "we don't negotiate with kidnappers" thing, but simple intransegence is what we're fighting. It has to be reasoned intransigence.
It won't get past the House.
I want to see what else the Dems sold out first - it doesn't seem to me that what all is stated in this article is enough.....
Steve -- Are the unemployment benefits extended UNTIL 2013 (gulp!) or THROUGH 2013?
tx
The ONLY thing that matters is having a showdown once and for all over whether holding our economy hostage is a legitimate way to govern. Every kick of the can lessens our leverage and public interest and enshrines it as part of the political process - for Republicans, since any Democrats who can't stomach meaningful filibuster reform or going over the cliff certainly have no stomach for threatening the economy to get a deal.
If Obama DOES manage to hold firm over the debt ceiling, it would be the worst possible moment - after emboldening the GOP both for another hostage-taking and in their belief Obama can be rolled. Making a debt-ceiling default inevitable, if that's where Obama chooses to draw the line.
Better to have the showdown now, and let the GOP crash in public opinion as the debt-ceiling approaches so there's some hope of avoiding default - while also convincing the GOP of our resolve to let them drive into the wall.
Anything Obama got for this can be negotiated away in the next hostage crisis - and we could lose even more. Which will incentivize the NEXT hostage taking, where we'll lose even more. Anything Obama gets for dealing will be lost unless he's willing to default in a few weeks. If he is, then better to hold the line now and take the debt ceiling off the table forever.
This is correct.
The debt ceiling Zealots need to be adressed correctly. These Zealots are exactly what Lincoln was talking about in his Cooper Union speech:
Rule or Ruin
That defines the GOP
Rule or Ruin
That should be the democratic "Talking Point". It is very concise,rolls of the tongue, was originated by the most Famous Republican and it is true. The largest gains that have been made by the GOP is through the concerted systematic use of tag lines. "Job killing Taxes"
Modern cognitive science proves that repetition is the key to learning. The GOP bubble shows the effectiveness on using it to promote false ideology and agenda's.
It is time the Left utilizes this technique to high light and drive home the Truth
Rule or Ruin
Please do not forget that "going over the cliff" is not without pain to vulnerable consituencies. Unemployment benefits get whacked and a bunch of other funding that affects the weakest. The administration must try to the very end to get an agreement -- to push the Republicans into actively negotiating. Its important to make the system work -- if not perfectly for sure, to the extent that it can. We cannot ignore the correct process of governance after spending an election fighting for it. Easy? No. But we are upholding the rules of governance under this constitution even more than the details in each program. Why? Because if we don't, the Republicans, who have already dealt serious damage to our government, can sit blissfully back and watch us also take a hammer to it, as some of you seem to be suggesting upthread -- that democrats just walk away from anything other than the perfect capitulation.
The Republicans must be made to agree to a deal. While I am sympathetic that we would all like it all our way, its not going to go that way. If we do not negotiate and just refuse anything but our own goals as a "sell out" , we are all going to be left with chaos where each side will just decide which rules they want to follow whenever in the future. Since no side can get everything they want, no one will get anything -- complete paralysis. We can't do that and survive economically, socially or politically, We have to turn the antigovernment people into accepting that they must govern -- for better or worse. We will have to continue to fight to get things right -- it will never stop and never be perfect but we will go a long way to have a deal done by midnight.
This is a mistake.
This hostage taking will not stop. If you save those on Unemployment Insurance this time then next time it will be the folks on Social Security that are hurt. Or maybe everybody but the rich are hurt if the Debt Ceiling turns into another fiasco.
We, as Democrats have to realize that there will be damage done by the Republicans. The only way we can limit that damage is by putting a stop to this hostage taking as soon as possible. That means now.
Take the hit and make it as painful as possible for the Republicans. And make it clear that we are willing to stare them down every time.
I am so effin tired of them trying to put SS on the table/. It has nothing , nothing
to do with the deficit . It is currently self sufficient and will continue to be so if they increase the cap from 110k to oh maybe 400K (where did I get that number?)
No more hostage taking
I suspect the deal will have problems with more than the Tea Party. There are Dems who are going to say no to the deal. So the issue is whether there are enough Dems and Republicans to pass the deal.
I would concur with the Senate Dems who think the deal is too favorable for the Republicans. The Dems are giving too much for too little in return. But if the deal is mostly comprised of items that end with 2014, then it may be a good thing for Dems that the issues come back early next year in time for the elections. Dems are right to say no to the sequester part of the deal. Without the sequester in place, Republicans have no incentive to negotiate a long term deal and resolve the debt ceiling in a timely fashion. If the sequester begins on January 1, the cuts hit both domestic and defense spending. Those cuts, entitlement cuts, the debt ceiling and the tax issues should be rolled up into a big package rather than negotiating all of these items in a piecemeal fashion which allows Republicans too many bites of the apple to cut domestic spending.
@Mike,
You are absolutely right. And President Obama, just said that he thought we should go ahead and fix what we can and deal with the rest later. I fell like 2008 again, the President is too nice in dealing with the GOP.
And as you said, this little fix will aloow allow the Republicans to continue their game playing over the debt ceiling and anything else that needs to get done.
I agree -- no more attempting to negotiate with the Republicans - they only say NO -esp to anything POTUS says. In my "worldview" - with the election, the American people's voices etc that means Republcans should NOT get more than a portion of what they want. This current Senate proposal gives them MORE - and is NOT acceptable. GO Back to Square ONE and stick to the original parameters and make it the "Grand Bargain" (ie all rolled into ONE vote). Straight up vote: Yes or No.... Not waiting for the majority of ONE party (ie you Republicans) to say yes. Bipartisan rule means a Majority of the Totality say YES - irrespective of which party they belong to. THAT is true governance.
Democrats just can't stand the heat.
At this point the dems in the house and senate need to tell obama and the gop to shove it , " obama and the gop " , imagine that ?
Just got done listening to President Obama.
Way to spike the football before the ink is on the paper!!
REALLY??? He couldn't wait until the deal was made to gloat?
I for one would like to see our President LEAD... that's right lead. Recognize that a compromise that all parties can live with needs to be had and lead all parties to that point... not create further division, jeapardize this deal before it even happens, and set up further acrimony for the next set of negotiations.
Congressional members are leaders. Why do they need to be lead?
Because, we have a divided congress, tons of debt, and he was elected to lead the country. He needs to step up and stop campaigning.
Yes, he was elected by a very large Elecoral College margin and a surprisingly large popular vote margin. And what he was elected on was a promise to allow Clinton Era rates to return for those making over $250,000, to protect the social safety net including Social Security and Medicare, and to make prudent investments in economic growth while limiting corporate welfare. Obama very clearly lead on this package, making it front and center of his campaign.
What you really should be arguing if you were intellectually honest about it is that the Republicans in Congress should follow his lead. That is where the real breakdown is. Representatives who have no interest in what the American People said when they spoke loudly just two months ago.
Yes , so mconnell and the gop can come out immediately after obama folds to all the demands again and say
" obamas taxing and spending is destorying america , and we just can not convince him to stop it "
There is nothing obama could ever do , that the gop would stop lying and stabbing america in the back , give america a break from the delusions , GOP Lisafp america
Patango...
What about the delusion that our fiscal issues will be even remotely assisted by taxing the upper 2%?
What about the delusion that we can keep incurring debt without substantially acting on spending reductions?
Lisafp, read what a respected financial advising site says about the debt. It is being overhyped for political effect (ask yourself why none of those scremaing loudly today were doing so when W was in office.) We are paying less for debt service today than we were in prior years. The debt is not a big deal; the best way to pay it off is to jump start the economy.
http://www.dailyfinance.com/2012/09/04/3-huge-economic-misconceptions-from-election-seas/?source=edddlftxt0860001
@whaddya
Yes, he campaigned on that... what did that actually mean?
Tax the upper 2%... in order to pay for the government for 8 1/2 days.
Protect social security and medicare how? ... what are specifics? Both sides acknowledge that trajectory is unsustainable. Protecting the aged from the heartless GOP isn't a plan, it's a campaign slogan.
Make prudent investments? With what money? What happens when there are increases with no offsets to pay for them? Borrow more?
America did speak... and we now have a divided government. Which means that balance may actually need to include having a real plan to reign in spending since we can't tax our way out of debt.
@whaddya
If W had racked up the amount of debt in 4 years that President Obama had, I think that many, including myself, would have been screaming.
Lisafp: George W DID add Billions to the Defict: 2 Wars using only borrowed money, giving huge tax breaks and tax loopholes to the Wealthy (Borrowed money), changing Corporate taxes (whereby alot of them pay NO taxes), giving them tax incentives to chip jobs over seas - all borrowed money -- Yes Obama added to the Deficit - via stimulus and other moves to attempt to keep the Economy from totally Tanking!
So -- why were you silent? I know I wasn't.
@VU
Yes, W did add to the debt. You are correct. There is alot of blame to go around. Since 1940, there have only been 6 years when the debt hasn't gone up. 1947, 1948, 1951 (Truman), 1956, 1957 (Eisenhower), and 1969 (Nixon).
Take a look at what the stimulus actually went for... read the list of corporations and projects that received funds... alot had more to do with funding the Democratic agenda over stimulating the economy. The outcome showed that. Shovel ready didn't happen.
POTUS should have stuck to $250k (as offered before) when "Plan B" failed. Make REPs squirm just as much as they have been doing to the middle class. This is such a waste of tax payers money, seeing as this will all resurface again in 6 weeks with Debt Ceiling "talks" (ie: more obstructions from a racist GOP).
Is there ever going to be cap on the debt ceiling? I am all for raising it now, but as we keep upping the debt ceiling soon it will be at 20 Trillion, the 25 then....
I do not have the answer for the ceiling. Of course stop deficits would be a start. Seriously, is there a limit at all?
Also,
Calling the Republicans racist just because they do not want this (the debt ceiling) to be an automatic thing without any spending cuts or extra revenue is not fair. Yes, the Republicans put a lot of debt on the books, but this Congress has a lot of new conservative members who were not around when this (debt) happened. And they want this to change. We all should worry about the continual deficits and added debt. Again, raise the debt ceiling now - with some deficit reduction triggers - but start now to keep this from being a semi-annual exercise.
They seem to be throwing in the extension of unemployment as bait.
I feel extremely sorry for unemployed, but I don't want to rehash this over and over. What was that about 3 months later we go back to having a gun to our head?
If Bernie says uh-uh, then I must agree.
This little (HAH, little) game of hostage taking must end. It and the other f-ing filibustering everything has to stop.
What are the Republicans getting in the pieces of a deal Steve laid out in the post? Yes, they get the threshold up from $250k, and concessions on the Estate Tax that also don't help the 0.1% so much as people in the 0.5-2% range...
But (if I'm reading this right) the top tops see their precious capital gains rate go up from 15% to 20% (back to Clinton-era level IIRC). And a bunch of helpful extensions to safety net/progressive taxation items?
The point here is making the point that top-line tax rates can go up, which this deal would satisfy. Beyond that, the President has been looking for around $800 trillion in new revenues, with an additional $400 trillion in tax reform later this year. Far as I know, capital gains were never on the table for any of those amorphous Republican 'raise revenue via tax reform' proposals. Yet capital gains is the big enchilada of tax expenditures, from a progressive perspective.
If the deal has $800 trillion in new revenues and raises upper tax rates, I don't see the big problem (other than professional lefties crying that Obama 'caved' again .. without waiting to see that he gets the result he wanted.. again).
All I see Republicans getting out of this deal is a fig leaf to lose somewhat gracefully. Also, a deal that looks this reasonable? The House will probably nix it anyhow.
I personally don't care if the Repubs get anything out of this deal. They certainly don't want what is best for most of the country. They have added nothing that will improve anything for anyone except very rich people who will still be very rich no matter what happens. I can't wait to vote some more of them out of office, IF they haven't gerrymandered so much that it isn't possible.
It's sad that McConnell and Biden have to come in to fix John Boehner incompetent mess. Worst speaker in memory.
This is just more horses#&t. "Barack the Spineless" at his best. Even this lame deal isn't done and he's out there "in front" of a sympathetic crowd of his choosing making another pretty speech. Pleeeease!
No Deal.. Like memosly says (and I say all the time), this is Horse-@!$%#.
Dissolve the Congress and the Kangaroo Court, neither portion functions any more.
So you want a dictatorship?
Sure seems like the republikkkans want a dictatorship...
I was of the opinion that Obama said 200/250k expecting that the Republicans would counter with 1m. So settling at anything less than 500k is a win for the Democrats.
Capital Gains going back up is a win for the Democrats. Extending unemployment insurance is a win for the Democrats. The wind breaks, college breaks, etc are wins for the Democrats.
The only non-win I see is the sequestration delay. It needs to happen. As painful as the medicare cuts and stuff will be, we need to cut the DOD budget and I can't see the Republicans going for that at any future time.
I guess I am a little unclear how some of you think that the hostage taking will end by going over the cliff? Yes, the taxes go up but other cuts also happen - draconian cuts. So then how do we get those programs uncut with the same @!$%#s we have in Congress now? How do you stop them from doing the same thing then? We will have more revenue but still have to vote to replace some very necessary things like unemployment insurance. Please understand, we are still in the same system then as now --- we cannot coerce resolution of the "hostage taking". We are better off trying to achieve a deal -- or you could bet your sweet bippy that these folks (as much as they hate each other), wouldnt be trying to do that now. Please please please understand -- we are not playing in the movie "The Godfather". Our interests are not as individual chieftains but in protecting a broad population and a system of government. Take or leave it cannot be our approach in this situation...
So then how do we get those programs uncut
We all should of thought about this years ago when we started having deficits at $1 Trillion or more every year. How any of this can be a surprise to anyone is a mystery. We have to sooner or later face this and I prefer now rather than making it worse later. Any compromise they come up with - which would prevent a lot of cuts you talk about as well as keeping tax cuts for most of us - will really do very little on the deficit and debt. It will be a bandaid and we will still most likely have big deficits of around $ 800 Billion a year. Not much of a cure.
Clean up on isle #2 skippy is throwing up troll vomit all over this thread....
Happy New Year Donna. As usual your comments add so much to the discussion. Keep it up with such witty comebacks. I can't stop laughing.
If I read the post correctly, the payroll tax break will not be extended. Obama should make extension of that a bright line: it is one of the more potent pieces of stimulus and of all of the things that could expire it would be one of the most economy-contracting. If the whole threat driving a deal on the cliff instead of going over is fear of putting us back in a recession, the payroll tax break is one to fight for, not bargain away.
Yes, it is a nice stimulus in the short term but we a taking it out of SS which will have it's own problems down the line. And putting in less now...after 2 years of this already will just speed up the time SS will have problems.
SS/Medicare is easy to fix. The income cap on the payroll deduction is wholly arbitrary and irrationally regressive. Simply remove the cap and not only is the system fully funded, it is much more fair, and you could likely reduce the actual tax rate a fair amount for everyone while maintaining solvency. I've never understood why Dems haven't had this front and center on the agenda for years. Even better, since hedge fund managers and day traders and people who live off of investing rather than actually making and doing things get SS and Medicare as well, there is no reason the tax should be solely on payroll income. Again, you would have a massively funded system and could lower the per dollar tax rate.
Not only am I disgusted with the lack of a reasonable deal, I am also disgusted that some are complaining about having to come back to Washington to do their job! Their job right now might just be waiting until something is worked out by someone else so that they can say yes or no! This isn't a holiday! Tomorrow is a holiday. Representatives and Senators were elected to do a job that requires them to earn the salaries (that they easily pass for themselves!) and yes, sometimes it's at the cost of some family time. They want us to have some sympathy for them?!!! They should be thankful they have jobs...at least until their terms run out!
First off, ' and the two invested several hours trying to work something out' totally OFFENDS me. They have had 500+ DAYS and they meet for TWO FREAKIN' HOURS? And the sequestration deferral? SCREW 'EM. This is the crap they pulled a YEAR AGO and didn't get it done and now they want to hold entitlements and defense HOSTAGE with the debt ceiling? NO F'ING WAY.