Thread: Economics The Fiscal Cliff Approacheth
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Old 11-20-2012, 06:12 PM   #205
Direckshun Direckshun is offline
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Ezra Klein is saying that he's hearing that an agreement could be made by December 21st on a "down payment" deal where both sides show the other they're serious, to color some more substantial, "grand" compromises in 2013:

Quote:
Here’s how it could work: The top-income tax cuts expire, as Obama wants. Those cuts only raise about $80 billion in 2013, so they’re a “down payment” on reform. And their cost is that the Democrats identify roughly $80 billion in spending cuts that can be passed into law now — so Republicans also get a “down payment” on the bigger deal. And all this happens in the context of a framework for a larger deal, which includes the promise of tax reform in 2013.

There will have to be more than that, of course. In particular, Republicans will need to feel that Democrats, now that they’ve pocketed the Bush tax cuts, have some incentive to come to the table for the final deal. So we’re going to be discussing triggers and sequesters and other kinds of penalties again. But that’s an easier discussion. In the past, every one of these deficit negotiations has fallen apart over the issue of taxes. If Republicans are no longer inclined to fight to the death over the Bush tax cuts for income over $250,000 — and many in their coalition aren’t — this could go surprisingly smoothly.
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