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 petegz28

Yeah, let's let the Pres rasie the debt ceiling all he wants......

That makes no sense. I have no idea what your argument here even is.

[patteeu]

Originally Posted by BigRedChief

Wrong. It causes us to default on our debts and cost us billions and billions more in interest we will never get back.

But I see what your doing.....Let's default, ruin our credit rating...the international banks get to charge us billions and billions more and the 1% make tons more money.

It doesn't cause you to default. Running out of money first before addressing your debt service and then finding out that you're up against the debt ceiling causes default.

It's clear you don't see what I'm doing.

[Direckshun]

Originally Posted by mlyonsd

But do you think eliminating the debt ceiling is a good idea?

Absolutely.

[Direckshun]

Originally Posted by patteeu

The debt ceiling doesn't prevent the government from paying it's debts, I prevents government from making new debt.

Except that it doesn't, in any functional way.

The government will just raise it at will. And occasionally threaten the economy in deciding to do so.

It's better gone.

[Direckshun]

Originally Posted by -King-

Boehner Makes Fiscal Cliff Counter-Offer
By John Parkinson | ABC OTUS News – 1 hr 56 mins ago
Boehner Makes Fiscal Cliff Counter-Offer (ABC News)

Saw this a couple hours after I had a round of posts in this thread.

Good to see the GOP actually make an offer. I think it's hilarious they've now decided that the Boehner-Obama agreement from last year, or the Bowles-Simpson commission's requests of the GOP, are now agreeable.

So far, I'm stunned by that Politico piece back earlier in this thread -- it has perfectly predicted everything we've seen happen so far.

I think a Grand Bargain is closer than we all give it credit. Despite the overheated rhetoric (Boehner's letter is a 9-paragraph shitfit before he gets around to the plan) everything's pretty much going to plan.

[Direckshun]

The Politico piece from post 280 has correctly predicted everything we've seen so far:

http://www.chiefsplanet.com/BB/showp...&postcount=280

If you want to know what's going on behind closed doors and what is likely to happen, this is now a must read.

[patteeu]

Originally Posted by Direckshun

Except that it doesn't, in any functional way.

The government will just raise it at will. And occasionally threaten the economy in deciding to do so.

It's better gone.

It's better to figure out a way to stop deficit spending. I know that's not even a consideration for the next four years, but that's a fact.

[Direckshun]

Originally Posted by patteeu

It's better to figure out a way to stop deficit spending.

Except that it's not. Not remotely.

We've deficit-spent liberally for decades now with a debt ceiling cap we've moved at will.

The United States has dealt with debt crises in the past without some arbitrary ceiling.

There is literally no reason for it to exist.

[FD]

Originally Posted by Direckshun

Except that it's not. Not remotely.

We've deficit-spent liberally for decades now with a debt ceiling cap we've moved at will.

The United States has dealt with debt crises in the past without some arbitrary ceiling.

There is literally no reason for it to exist.

Agreed. Its a complete anachronism in the world of modern budgeting and should be done away with.

[petegz28]

Originally Posted by Direckshun

Absolutely.

Considering you support a party that refuses to pass a budget, this is not shocking.

[petegz28]

Originally Posted by Direckshun

Except that it's not. Not remotely.

We've deficit-spent liberally for decades now with a debt ceiling cap we've moved at will.

The United States has dealt with debt crises in the past without some arbitrary ceiling.

There is literally no reason for it to exist.

We also had those things called "budgets" for all those decades too. Your party now refuses to pass one and you want to remove the debt ceiling on top of that?


Why don't you just come out and admit you support unlimited spending by our Fed Gov?

[petegz28]

Originally Posted by FD

Agreed. Its a complete anachronism in the world of modern budgeting and should be done away with.

Modern budgeting? When was the last time this Democraticaly controled Senate passed a budget?

[FD]

Originally Posted by petegz28

Modern budgeting? When was the last time this Democraticaly controled Senate passed a budget?

I agree it would be better if the Senate passed a true budget, but even they have passed budget resolutions, funding and appropriations bills every year. The difference between their spending and tax bills is the deficit. Making them vote a second time for the same thing, which is all the debt ceiling does, accomplishes nothing except give a stage for political posturing that injects unnecessary uncertainty into the economy.

[RaiderH8r]

Obama ran and was elected on the platform of demanding Speaker Boehner lead the country and he is being true to his word. Duh.

[Direckshun]

Originally Posted by petegz28

Considering you support a party that refuses to pass a budget, this is not shocking.

You support a party with two-plus decades of deficit exploding.

I support a party that can deal with budgets responsibly.