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]

Originally Posted by King_Chief_Fan

oh yeah, those state governments don't count.

don't you think some state employees will be reduced as well?

Reducing state employees ain't gonna do shit for the federal deficit.

That's a totally different topic.

So yeah, they don't count.

[Direckshun]

Originally Posted by patteeu

I'm in favor of reducing marginal rates (especially for the top brackets) and for reducing loopholes/targeted tax breaks.

I *am* for increasing rates on the lower income brackets though (especially the 0 bracket) so everyone has skin in the game.

Your policy is to lower taxes on the wealthy, and raise taxes on the poor and middle class.

[Direckshun]

Originally Posted by patteeu

It's hard to respond specifically to "general criticism", but in general I'd say that increased wealth transfer is a step toward socialism. So if you want to increase taxes on the people who are already net payers instead of net takers, you're pursuing an increased degree of socialism.

Kind of like when I walk up Glenstone avenue here in Springfield, I'm taking a step towards the North Pole.

[Direckshun]

There is a lot of conversation right now about charitable deductions.

Nothing has leaked, but I think where there's smoke, there's fire. I think charitable deductions are part of discussions right now.

[patteeu]

Originally Posted by Direckshun

Your policy is to lower taxes on the wealthy, and raise taxes on the poor and middle class.

My policy is to realign our tax policy for global competition and get everyone in the same political boat so we can all row in the same direction. It doesn't matter to me whether the CEO of BigCorp, Inc makes 10x more than his workers or 10,000x more, as long as we're all benefiting from an improved economy.

[patteeu]

Originally Posted by Direckshun

Kind of like when I walk up Glenstone avenue here in Springfield, I'm taking a step towards the North Pole.

I don't know. Which direction are you walking on Glenstone?

[Direckshun]

Originally Posted by patteeu

My policy is to realign our tax policy for global competition and get everyone in the same political boat so we can all row in the same direction.

And raising taxes on the middle class and the poor while cutting taxes for the wealthy does that, how.

[Direckshun]

Originally Posted by patteeu

I don't know. Which direction are you walking on Glenstone?

DAMN IT -- I mean "walking north."

Ruined my own snark. Damn. I really liked that one, too.

[Comrade Crapski]

Vorwarts!

http://thepeoplescube.com/peoples-bl...cy-t10046.html

[Direckshun]

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:

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.

[Bo's Pelini]

Originally Posted by Direckshun

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:

More kicking the can down the road.

[dirk digler]

Originally Posted by Direckshun

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:

I will believe it when I see it. Boner wrote an op-ed where he wants Obamacare on the chopping block as part of the deal so if that is the case he really isn't that serious.

In an op-ed for his local Cincinnati paper, House Speaker John Boehner argues that the Affordable Care Act should be on the table for cuts in a deficit reduction deal.
He writes:

The president’s health care law adds a massive, expensive, unworkable government program at a time when our national debt already exceeds the size of our country’s entire economy. We can’t afford it, and we can’t afford to leave it intact. That’s why I’ve been clear that the law has to stay on the table as both parties discuss ways to solve our nation’s massive debt challenge.

The Ohio Republican also promises to use his House majority to go after Obamacare through the oversight process, mentioning recent efforts by the Ways and Means Committee to probe whether the administration is using taxpayer funds inappropriately when it comes to the health care law.

Over the past couple of years, I have noted there are essentially three major routes to repeal of the president’s law: the courts, the presidential election process and the congressional oversight process. With two of those three routes having come up short, the third and final one becomes more important than ever.
Vigorous oversight of the health care law by the House can be expected and, in fact, is already under way.

[BucEyedPea]

Originally Posted by Bo's Pelini

More kicking the can down the road.

Yup!

[BucEyedPea]

Originally Posted by dirk digler

I will believe it when I see it. Boner wrote an op-ed where he wants Obamacare on the chopping block as part of the deal so if that is the case he really isn't that serious.

Well, he is serious because it has $17 trillion in unfunded liabilities. Furthermore, since not all states will set up an exchange, that means the federal govt will have to. There's a glitch in the bill, and that is those exchanges are NOT funded. So that has to be approved by a Republican congress who holds the power of the purse. This was how the Ds ended the Vietnam war by refusing to fund it. Remember, Pelosi said we have to pass it to find out what's in it...and this is what is being found.

Plus the SC gave the states some power on Medicaid. Something else that could hurt it.

It's insanity to fund that massive an entitlement program in the current climate. It could still come crashing down.

[BucEyedPea]

Oh, and there's other legal challenges to the law.