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Kill This Deal

By Timothy Noah, The Plank - December 31, 2012

Dear House and Senate Democrats,

Your president has sold you out. A deal will likely be announced today canceling the scheduled income-tax increase on all family income below $450,000, instead of the promised $250,000 threshold, which was already too high. It will also extend unemployment benefits and what my colleague Jon Cohn calls the "refundables," i.e., tax credits for lower- and middle-income people, and it will cancel Milkageddon, which is all good. But it isn't clear what it will do about the automatic cuts in the "sequester," and the deal doesn't appear to include extension of the payroll tax cut, which even Bill Kristol wants to extend. Also, the Democrats mostly caved on letting the inheritance tax rise. Oh, and the deal gives Republicans carte blanche to take America hostage all over again in a month or two over raising the debt limit. 

Please vote against this bad deal so we can greet the new year on the far side of the fiscal cliff, which, notwithstanding the hysteria that the Washington Post is doing its best to spread (with an assist from the Senate chaplain!), is not the Slough of Despond. It is the Promised Land, a place where Democrats will have considerably more leverage than they have today to compel a quick deal far more to their liking.

The White House means well, but it has bargained incompetently. As Jonathan Chait points out, any worry on the White House's part that it will be undercut by Senate Democrats too eager to make an even-worse deal is matched by a well-founded fear on the Senate Democrats' part that the White House won't hang tough. And anyway, the president has veto power, for crying out loud! Ezra Klein reports that the Democrats think they can make a deal now, force another tax increase later, and still get Republicans to back down on the debt ceiling. This is delusional. Any Republican who at this point believes Democrats will drive a hard bargain must be judged a fool.

You can change this calculus by demonstrating the fortitude that has abandoned President Barack Obama and Vice President Joe Biden. Do not "come together." Stay apart. Until it's 2013.

Sincerely,

Timothy Noah

PS Tell your Republican friends that any vote for a deal before Jan. 1 is most definitely a tax increase, while any vote for a deal after is most definitely a tax cut. You might remind them that the Club For Growth thinks so, too.

Update, 1:15: Sam Stein and Ryan Grim of the Huffington Post have a more thorough summary of the deal here.

Goddamit, let's go over the effin' cliff! If the deal, as described by Mr. Noah above, is indeed in works, I sure feel like I've been played for a sucker by BHO & Co.

Goddamit, let's go over the effin' cliff! If the deal, as described by Mr. Noah above, is indeed in works, I sure feel like I've been played for a sucker by BHO & Co.

Me too. Arrrgghhhhhhhhhhhh.

Me too. Arrrgghhhhhhhhhhhh.

"Oh, and the deal gives Republicans carte blanche to take America hostage all over again in a month or two over raising the debt limit."

Evidence please.

"Oh, and the deal gives Republicans carte blanche to take America hostage all over again in a month or two over raising the debt limit."

Evidence please.

Not sure this is accurate. From the Washington Post a few minutes ago:

"As President Obama prepared to deliver remarks about the "fiscal cliff" at 1:30 p.m. at the White House, negotiators for the administration and McConnell (R-Ky.) appeared to have nailed down many of the most critical tax issues, including a plan to let taxes rise on income over $450,000 a year for couples and $400,000 a year for individuals, according to people in both parties familiar with the talks.

Households earning less than that would largely escape higher income tax bills, though couples earning more than $250,000 a year and individuals earning more than $200,000 would lose part of the value of their exemptions ... view full comment

Not sure this is accurate. From the Washington Post a few minutes ago:

"As President Obama prepared to deliver remarks about the "fiscal cliff" at 1:30 p.m. at the White House, negotiators for the administration and McConnell (R-Ky.) appeared to have nailed down many of the most critical tax issues, including a plan to let taxes rise on income over $450,000 a year for couples and $400,000 a year for individuals, according to people in both parties familiar with the talks.

Households earning less than that would largely escape higher income tax bills, though couples earning more than $250,000 a year and individuals earning more than $200,000 would lose part of the value of their exemptions and itemized deductions, under the terms of the emerging agreement.

Low-income households would also benefit from an extension of credits for college tuition and the working poor first enacted as part of Obama's stimulus package in 2009. And businesses would see a variety of popular tax breaks extended, including a credit for research and development.

The tax on inherited estates would rise from 35 percent to 40 percent, though Democrats agreed to keep the current exemption for estates worth up to $5 million in place.

The two sides also appeared to have reached consensus on unemployment benefits, with Republicans conceding to Democratic demands to keep benefits flowing to the long-term unemployed for another year. The cost would not be offset with other spending cuts."

We'll see shortly, but it appears that unemployment benefits will continue. The biggest problem would be the payroll tax holiday. If they extended that as well I think this is not so bad. And it would have the effect of forcing Republicans to vote for a tax hike. Not too shabby.

http://money.cnn.com/2012/12/31/news/economy/debt-ceiling-fiscal-cliff/

http://money.cnn.com/2012/12/31/news/economy/debt-ceiling-fiscal-cliff/

I don't see any inconsistency between what I wrote and what the Post has.

I don't see any inconsistency between what I wrote and what the Post has.

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