Upon Further Examination...

[Nbadan]

This isn't the sandwich many people think it is....

John Boehner is selling the current CBO baseline to his caucus to pass this bill, and the current baseline includes an expiration of the Bush Tax Cuts. The only way for the Bush Cuts to be extended is if the “super congress” committee offsets it with tax hikes or tax reform in other areas. Going after the Bush Tax Cuts in the committee would not count as reducing the deficit, because the baseline already assumes they will expire.

John Boehner knows this, but most members of his caucus and, admittedly, many members of the Democratic caucus don’t realize it. I didn’t put two and two together myself until late last night.

If you view this deal from the perspective that there is a guarantee the Bush Tax Cuts will expire, then suddenly the deal swings wildly in favor of President Obama.

The president offered John Boehner a 4:1, cuts:revenue deal, but what he ended up getting instead is a 1:2, cuts:revenue deal.

The Bush Tax Cuts account for roughly $3.7 trillion dollars in additional revenue over 10 years. The spending-cuts tentatively agreed to in the deal account for only $2.7 trillion dollars over 10 years. This means there is $1 trillion more dollars in revenue contained inside the deal over 10 years than there are spending cuts.

Furthermore, the spending cuts contained inside the bill do not come into effect until 2013, after the Bush Tax Cuts expire, meaning the revenue and cuts come into effect at roughly the same time.

Winning in losing?

It’s no coincidence that President Obama came out last night and bluntly said this is not the deal he wanted. It’s no coincidence that John Boehner and Eric Cantor both told their caucus that President Obama “caved.” They have to say this, because if it appears that President Obama got anything in the deal, then suddenly it can’t pass the House of Representatives. There is nothing they hate more than giving the president a victory, so it has to appear as if he got nothing, and they have been pretty convincing.

President Obama knew this would look bad for his administration in the short term, but he took that risk in exchange for winning further along down the road. As I mentioned above, none of this policy actually comes into effect until 2013. Not even the spending cuts. Only 1% of the spending cuts will be felt in 2012.

This deal masterfully accomplishes the task of kicking the can down the road for the Republicans without actually appearing so unless you really dig deep into it, and it leaves most of the details up to the next session of Congress beginning in January of 2013.

We all owe the president a great deal of respect for being willing to take the political hit in the short term to save us in the long term.

Link

Not in favor of many of the spending cuts in this bill, but I'm all for eliminating the Bush Tax cuts

[Nbadan]

From KOS:

Bottom line: The President agreed to $550 billion in non-defense cuts over 10 years (1.6% of federal operating budget of $3.5 trillion/year). He also agreed to form a bi-partisan commission tasked with coming to a balanced approach on cutting the remaining $1.5 trillion, with a trigger that takes half the cuts from defense if no agreement is reached.

Thus, of the total of $2.4 trillion in cuts agreed to in the near- and long-term, $1 trillion could potentially come straight out of defense budget. How is that for the “balanced” approach the White House has been rooting for all along?

Essentially, Dems have subs uted defense spending for the tax cut revenue Republicans have refused to move on.

Remember that the Cons ution (Art. 1, Sec. 7) requires that all tax legislation originate in the House of Representatives – that’s why Republicans are holding the tax cut/tax increase cards. The ONLY way to get Republicans to agree to new tax revenue is if something near and dear to them is held hostage (i.e., defense spending).

KOS

how is this anything but a victory for Pres, Obama again? Oh Yeah, the M$M

[Wild Cobra]

Not in favor of many of the spending cuts in this bill, but I'm all for eliminating the Bush Tax cuts

So you are in favor of lower income families having their marginal rate go from 10% to 15%, or 15% to 28%, and 25% to 28%... Right?

[Nbadan]

Lower income families have an effective 0% tax rate....it will raise my taxes, but it will raise Warren Buffet's taxes even more....

[Wild Cobra]

Lower income families have an effective 0% tax rate....it will raise my taxes, but it will raise Warren Buffet's taxes even more....

If you say so. Don't count on it.