Wednesday, December 5, 2012

The Deal That's Coming

The tea leaves are telling us that there will be no grand compromise before January. Listen to Press Secretary Carney:

 I think we all acknowledge now -- Democrats and Republicans and the White House -- that a process has to be in place here that envisions two stages, because there’s interest in entitlement reform by all sides, there’s interest in tax reform by all sides, but that is not likely to be achieved between now and the end of the year. But there is an agreement that can be reached that is balanced, that's fair, that commits all sides to tough choices, and the President is very interested in achieving that deal.
In the meantime, the Democrats are finding their way again to demonize the Republicans as insensitive tax increasers. One can simply look at the White House website -- with its pictures of struggling middle class families to see the strategy at work, but we'll let a Congressional backbencher Janice Hahn put in print:

As we race toward this fiscal cliff, we are faced with a number of looming problems, not the least of which is the threat of a crushing middle class tax hike. If we fail to act, middle class Americans could see their next tax bills rise by more than $3,000, and
while there will be much to disagree on in the coming negotiations, no one wants this to happen. A tax hike of this size on the middle class would be a terrible burden on families who are just beginning to recover from this Great Recession.
With congressional approval at an all-time low, we cannot pass up this opportunity to prove to the American people that we can work together. President Obama's legislation to extend the middle class tax cuts has already been passed by the Senate, and it now depends on us. We should embrace this opportunity to vote on something we can agree on and bring this legislation to the floor.
While the GOP rumor mill has been mulling over a Boehner escape plan in which the tax cuts for the middle class are extended, and nothing else done, the Democrats have been working to advocate this very outcome. Since this approach is the one that does not require the GOP leadership, or the Dems to do very much, this is the result we will get. The President ran a very hard campaign for almost two years, and needs that three week vacation.
I suspect that I should be happy with this result -- because I think the GOP really needs to come to grips with the reality that the Bush tax cuts can not continue with the level of deficits this country has run. Problem is, I don't see the Democrats doing a thing about entitlements, after the can is kicked down the road a couple of months. They will be too busy working on their victory laps. About the only thing that could disrupt that is a rating agency downgrade.
I look forward to the debate on the debt level increase. Where we get to do this brinkmanship routine that accomplishes nothing all over again.

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