The Fiscal Cliff Approacheth

[Direckshun]

In an effort to make this thread sticky-worthy, I am going to update this OP to keep casual glancers informed.

This post is the official one-stop shopping of the key points/developments of the fiscal cliff negotiations.

Far as I understand, the fiscal cliff:

1. Gets rid of the Bush tax cuts for the wealthy.
2. Gets rid of the Bush tax cuts for everybody else.
3. Slashes defense spending by something like $500 billion.
4. Slashes domestic programs like the NIH, Head Start, and medicine/drug care for the poor by $500 billion.

The new idea is for Democrats to allow the cliff to hit, then immediately introduce a bill that would bring 2, 4, and some of 3 back. But not 1.

Here is a chart detailing exactly what the fiscal cliff is going to do, financially:

Spoiler!

Originally Posted by Direckshun

New CBO projection: if the fiscal cliff hits, we are in another recession, and lose two million jobs.

http://www.reuters.com/article/2012/...87L0JV20120822

The poor would be hurt by the fiscal cliff:

Originally Posted by Direckshun

Overall, if the tax breaks from the 2009 stimulus are allowed to expire—the EITC and Child Tax Credit expansions, along with American Opportunity Credit for college tuition—the poorest 20 percent of Americans would see their taxes go up by $209 on average, reducing their after-tax income by 1.9 percent, according to the Tax Policy Center.

As would the middle class:

Originally Posted by Direckshun

According to estimates by the Tax Policy Center, more than half of all married couples will owe an additional tax of around $4,000 unless Congress acts. And more than a third of families with children will fall subject to the AMT, with parents of three or more children facing an extra tax of $4,700.

Among married couples with at least two children and adjusted gross income between $75,000 and $100,000, the center estimates that 84 percent will face a significantly higher tax bill this year because of the AMT.

There seems to be some consensus between the parties that substantial revenues want to be raised. Boehner and the GOP hopes that's through limiting tax deductions rather than tax raises.

Obama's opening offer, essentially:

• Allow the Bush tax cuts on high earners to expire. $849 billion
• Limit itemized deductions to 28 percent, close some loopholes and deductions on high earners, eliminate tax breaks for oil and gas companies, eliminate the carried interest loophole, plus a few other items. $584 billion
• Create a special "Buffett Rule" tax rate for millionaires. $47 billion
• Restore the estate tax to 2009 levels. $143 billion
• Limit corporate income shifting to low-tax countries. $148 billion
• Other miscellaneous tax increases and reductions. About -$200 billion
• Total: $1.6 trillion

[Direckshun]

It should be noted that in the above deal, the White House is saying the top income tax bracket is absolutely not staying where it is.

This is an explicit rejection of Boehner's attempts to raise revenue only through capping deductions.

[BucEyedPea]

Capping deductions is a tax increase...without being easily called out for voting for one.

[patteeu]

Originally Posted by BucEyedPea

Capping deductions is a tax increase...without being easily called out for voting for one.

I'm pretty sure everyone understands that.

[Direckshun]

http://www.mcclatchydc.com/2012/11/1...ell-raise.html

Obama assures liberals he'll raise taxes on wealthy
By Lesley Clark and David Lightman
Posted on Tuesday, November 13, 2012

WASHINGTON — President Barack Obama assured labor unions and liberal organizations Tuesday that he’s firmly committed to letting tax cuts for higher incomes expire as scheduled at the end of the year, even as congressional Republicans accused him of refusing to propose a specific plan to settle a looming budget crisis.

Obama met with the labor and liberal groups for an hour at the White House, his first extended meeting with anyone from outside his administration since he won re-election a week ago. He told them he’s committed to raising taxes on higher incomes as he negotiates with Congress on avoiding the “fiscal cliff” of automatic tax increases when Bush-era tax cuts expire at the end of the year and automatic spending cuts negotiated during last year’s debt crisis kick in.

“President Obama today strongly reiterated his steadfast commitment to ensuring that the Bush tax cuts for the wealthiest 2 percent finally end Dec. 31 and to protecting the middle class in the process,” said Justin Ruben, executive director of the liberal group MoveOn.org Political Action.

“The president, like we are, is committed to preserving the tax breaks for the middle class and making sure that rich people pay their fair share,” said AFL-CIO president Richard Trumka. “We’re very committed to making sure that the middle class and workers don’t end up paying the tab for a party that we didn’t get to go to and the president is committed to that as well.”

Trumka and several other attendees, including National Education Association president Dennis Van Roekel, wouldn’t divulge details, including whether Obama talked about issues that some liberals oppose – including raising the eligibility age for Medicare.

Ruben sidestepped the question of Obama’s position on Medicare, praising him generally but noting that his group’s 7 million members would fight to protect Medicare and other entitlements from cuts.

“We also appreciate that the president again promised not to balance the budget on the backs of the middle class and the poor,” Ruben said in a statement. “And our members are committed to defending Medicare, Medicaid and Social Security from any benefit cuts as part of a budget deal.”

Obama plans to meet with business executives Wednesday and congressional leaders Friday at the White House. Republicans Tuesday signaled they want to see more specifics from the president, and reiterated their staunch opposition to any change in tax rates.

Almost everything else, though, appeared to be up for discussion, and they want Obama to go first.

“How do we get around the stalemate? That’s simple: presidential leadership. We will arrive at a plan when the president presents one, or we won’t get anywhere at all.” Senate Republican leader Mitch McConnell of Kentucky said in a fiery floor speech.

He insisted he’s seen no plan. “Instead of showing a faith and a willingness to solve the problem, we get the same tired talking point – that we can’t cut our way to prosperity,” McConnell said. “Well, that may poll well. But it isn’t a plan. It’s a cliche that’s meant to shut down debate and prevent a serious proposal from ever taking shape.”

The White House and Republican efforts to position themselves before talks start came as a new poll illustrated the political and economic stakes. Sixty percent of Americans said their own financial situation would get worse if the tax cuts expire.

The Pew Research Center survey also found most people would blame Republicans, who control the House of Representatives, for any stalemate. In the Senate, Republicans control 47 of the 100 seats, enough to wield considerable clout, since 60 votes are usually needed to overcome procedural hurdles.

McConnell charged that all he’s heard so far is a “tedious repetition of poll-tested talking points.” Lead, McConnell urged the president, and lead with a plan.

“So let me be clear,” McConnell said, “When it comes to the great economic challenges of the moment, saying that you want a balanced approach is not a plan.”

Senate Republicans did not discuss details of their own plan, though McConnell joined House Speaker John Boehner, R-Ohio, in ruling out any increase in tax rates. Obama wants to retain current rates for individuals earning less than $200,000 and families making less than $250,000.

For others, the current rates of 33 percent and 35 percent would return to the pre-Bush rates of 36 percent and 39.6 percent.

McConnell, like Boehner, said he’d be willing to seek ways to raise more revenue – but not with higher rates.

“Republicans like me have said for more than a year now that we’re open to new revenue in exchange for meaningful reforms to the entitlement programs that are the primary drivers of our debt,” he said, “so that we can reduce the deficit, protect these programs for today’s seniors, and strengthen them for future generations.”

[Direckshun]

McClatchy's story came with this picture.



Terrifying?

[patteeu]

Originally Posted by Direckshun

Terrifying?

Already terrified:

[Direckshun]

Originally Posted by patteeu

Already terrified:

And here I was, assured this would not happen.

Had to be the result of in person voter fraud.

[patteeu]

Originally Posted by Direckshun

And here I was, assured this would not happen.

Had to be the result of in person voter fraud.

I think we've had some kind of coup, but I can't quite prove it. Military leaders considered to be potential rivals are being discredited or removed all over the place to prevent a counter-revolution.

[BucEyedPea]

Originally Posted by patteeu

I'm pretty sure everyone understands that.

A reminder is always and repeatedly due.

[Direckshun]

Originally Posted by patteeu

I think we've had some kind of coup, but I can't quite prove it. Military leaders considered to be potential rivals are being discredited or removed all over the place to prevent a counter-revolution.

Well at least we got to celebrate one last election together.

All hail Dear Leader.

[Mr. Kotter]

In a post-election survey concerning the fiscal cliff conducted by Pew Research Center, about half of respondents believe Congress will fail to reach an agreement to reduce the nation's deficit compared to only 38% who said a deal will be met. If the two sides fail to find common ground on reducing the deficit, 53% said congressional Republicans will be to blame while 29% said the responsibility falls on President Barack Obama.

http://politicalticker.blogs.cnn.com...iff/?hpt=hp_t2

[Direckshun]

Obama's offer, essentially:

• Allow the Bush tax cuts on high earners to expire. $849 billion
• Limit itemized deductions to 28 percent, close some loopholes and deductions on high earners, eliminate tax breaks for oil and gas companies, eliminate the carried interest loophole, plus a few other items. $584 billion
• Create a special "Buffett Rule" tax rate for millionaires. $47 billion
• Restore the estate tax to 2009 levels. $143 billion
• Limit corporate income shifting to low-tax countries. $148 billion
• Other miscellaneous tax increases and reductions. About -$200 billion
• Total: $1.6 trillion

[Direckshun]

OP updated to be a running summary of major developments.

[jiveturkey]

Is the Obama proposal that you listed a 10 year projection?

[Donger]

Ah, going after the tax breaks for energy (non-green of course) companies. What other industries will Obama target?