Breaking: Obama to speak about fiscal cliff at 1:30; Update: Tax deal done? Update: Sabotage?

posted at 1:11 pm on December 31, 2012 by Allahpundit

Just an FYI in case you’re one of the few Americans who’s still following this. Remember that O said on Friday that if Reid and McConnell couldn’t reach a deal by Monday, he’d ask Reid to bring the Obama plan — featuring tax hikes on all earners above $250,000 — up for a vote on the Senate floor. According to the AP, the “contours” of a deal are emerging as I write this. Good enough to buy more time for negotiations, or is O about to pull the plug and demand that up-or-down vote after all?

The contours of a deal to avert the ‘fiscal cliff’ emerged Monday, with Democrats and Republicans agreeing to raise tax rates on couples making over $450,000 a year, increase the estate tax rate and extend unemployment benefits for one year, officials familiar with the negotiations said…

The deal in the works would return tax rates on families making over $450,000 to 39.6 percent, the same level as under former President Bill Clinton. The agreement would also raise tax on estates worth more than $5 million from 35 percent to 40 percent. Unemployment benefits would be extended for one year.

A “senior Republican side” tells Reuters that a majority of Senate Republicans are expected to vote yes on the deal. Republicans may not be the main stumbling block anymore, though. There’s a lot of angst among liberals this morning about Democrats backing off of the $250,000 threshold for new taxes, with people as prominent as Tom Harkin dumping all over the proposed deal. Joshua Green explains:

With the caveat that no reporter is privy to the details of the offers being swapped, here is the deal that seemed to be emerging: Democrats would get an extension of unemployment benefits for 2.1 million people; they’d patch the alternative minimum tax for a year to protect the middle class from sharp tax hikes; and they’d implement a “doc fix” to ensure that Medicare reimbursement rates to doctors don’t fall precipitously and limit patients’ access to medical care. Republicans would get to preserve Bush-era income tax rates for households making up to $400,000 (rather than the $250,000 limit Democrats prefer). They’d also get a lower tax rate and a much higher threshold for inheritance taxes (set to revert to 55 percent on estates of more than $1 million on Tuesday). And significantly, Republicans would hold onto their greatest point of leverage in upcoming negotiations over entitlement cuts, because the deal wouldn’t raise the debt limit.

Here’s what’s important about everything Democrats would get: It’s temporary; everything expires (presumably) within a year. Here’s what’s important about what Republicans would get: it’s permanent. The tax rates won’t expire.

That means Democrats are offering a huge gift to Republicans and getting almost nothing in return because on Jan. 1, if no deal is struck, Democrats will get even more revenue than they’re asking for without conceding a thing. And if, as polls suggest, voters would blame Republicans for going over the cliff, Democrats are also offering to save Republicans from their worst impulses—which, at least for the time being, since they haven’t yet agreed, is to reject this deal.

A GOP source made the same point to Philip Klein, boasting that the emerging deal would trade “permanent Republican priorities in exchange for temporary Democratic priorities.” I’m mystified as to why Democrats would budge that far on the income threshold for new taxes when they can wait another 11 hours and then pound the table for tax hikes on the $250K and up crowd, as O demanded all along. If you’re not even getting the GOP to agree to raise the debt ceiling in return, why would you do such a thing? Lefty Jonathan Chait doesn’t understand it either and thinks all it’ll do is convince the GOP that they can make Obama blink on the debt ceiling if they hold out on that in a few months too.

Hence the mystery of O’s 1:30 appearance. Is he going to go out there and say he’s “encouraged by the progress” or whatever and hopeful that a deal can be reached in the next few hours, or is he going to side with progressives and call this a crap deal that he can’t support and demand that Reid bring O’s own bill up for a vote? (The latter would be odd given that his own VP is now evidently the lead Democratic negotiator.) I think he’ll do both: He’ll set a deadline of, say, 5 p.m. today for a negotiated deal and then ask for a vote on his plan if nothing’s been hammered out by then. Presumably the GOP will filibuster it — why vote yes if there’s a better deal for Republicans being negotiated between Biden and McConnell? — and then O can whine about it for a day or two until something finally passes both houses.

Stand by for updates.

Update: Liberals care trying to figure out the Democrats’ strategy in moving off of the $250K threshold. Ezra Klein says they’re giving a little now in the expectation of getting a lot later — namely, they’re planning to ask for further tax hikes in exchange for entitlement cuts as part of the inevitable debt-ceiling deal in the spring. Greg Sargent is more pessimistic and thinks they’re caving because they’ve realized they don’t have quite as much leverage as they thought:

A White House ally spells out an alternative interpretation. Dems don’t necessarily believe going over the cliff will give them all that much more leverage in the talks next year. It’s been widely argued (by me and many others) that if we do go over the cliff, Dems can simply move to pass the Obama Tax Cuts For The Middle Class, forcing House Republicans to go along. But some Dems question whether House Republicans will feel the need to follow this script. Rather, the thinking goes, if Dems do that next year, the House GOP leadership can pass its own bill cutting taxes on all income up to, say, $500,000 or $600,000.

If the idea is that it’s easier for Republicans to support continuing tax cuts just on some income levels after they’ve all expired, such a bill (with $500,000 or $600,000 as the threshold) could pass the House. What’s more, some Congressional Democrats may feel like they have to support such a bill, too. And the worry is that if this is then kicked over to the Senate, then some Senate Dems may feel tempted to support it or at least negotiate around it, which could divide Senate Dems. After all, some of them have already voiced support for putting the income threshold at $500,000 or $1 million.

And so, the idea is that it’s better to lock in a deal on rates now, at, say, $450,000, extend unemployment benefits, and pocket those gains and continue the fight next year.

Obama can’t hold his own caucus together on one of his signature policy demands, flush from a landslide presidential election win? What?

Update: Sounds like the key sticking point is unstuck:

Update: Equally baffling, why doesn’t the GOP, the self-styled party of “the family,” push for this?

Update: Marco Rubio said yesterday that he thinks most Senate Republicans are disinclined to filibuster whatever ends up coming to the floor, but I assume that’s limited to whatever bill emerges from negotiations. They’ll surely filibuster Obama’s bill if Reid brings it up. Why wouldn’t they at this point, when they know how far Dems will bend on the income threshold?

Update: Via Mediaite, Bob Corker reminds us just how embarrassingly low the stakes are here from the standpoint of deficit reduction. Quote: “This is a lot of fuss about nothing today, unless you make, you know, somewhere between $350,000 a year and $550,000, today’s discussion is totally irrelevant, because that’s all that’s being discussed.”

Visit NBCNews.com for breaking news, world news, and news about the economy

Update: Expect the obligatory amount of preening at this presser but not much news:

Update: Like Corker said, totally irrelevant:

Update: Senate GOP aides tell NRO that the two sides have agreed on the tax numbers. Details: $400K for individuals, $450K for married couples, and a 40 percent tax on estates above $5 million. Can it pass the House, though? Quote:

Update: O’s presser is done and the tone was … not helpful. In fact, a la Ezra Klein’s piece above, he specifically warned the GOP to expect a new demand for taxes when the debt ceiling standoff comes:

Why antagonize the other side when we’re finally on the cusp of a deal? Because, silly: He knows his base is going to hate this deal after he promised them an income threshold of $250K and tweaking the GOP is one way to get back in their good graces. In fact, if he tweaks them enough, Republicans might walk away in annoyance, which would bail O out by not only canceling the deal but letting the White House blame the GOP for its failure. To wit:

Update: Timothy Noah of TNR posts an open letter to Senate and House Democrats begging them to kill this deal. Meanwhile, Obama’s attempt to bait Republicans into walking away may be paying dividends:

Update: Mercifully, the House Republican leadership is whispering that they’re more likely to vote tomorrow on a final bill instead of late tonight, when no one but no one will be paying attention. Taxes do go up at midnight, but since markets are closed for the holiday tomorrow, the impact will be negligible — assuming that the final bill does end up passing, of course.

Update: Is the GOP about to take the bait?

Update: Another reason why the House is more inclined to vote tomorrow:

GOP sources admitted there is an added benefit to the Senate’s delay: taxes would already be up, so lawmakers could argue that they are voting for tax cuts, as opposed to tax increases.

One GOP source also said that may help get more House Republicans to vote for the deal.

“I wouldn’t overestimate it, but a handful may be the difference we need,” the source said.

Update: Interesting analogy. The difference is, Leon Lett didn’t fumble intentionally.


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dominigan on December 31, 2012 at 7:25 PM

By the way, if Nomad or you had bothered to click on the link in the post when I SPECIFICALLY said:

Reminder: There was NO Bush FY2009 Budget

…you would have been taken to my blog and found an old entry of mine that says:

There was NO FY2009 budget signed into law by Bush. He signed a CR into law on 30 September 2008. It expired on 6 March 2009.

For those of you that are unaware of the fact that there was no Bush FY2009 and that the Left has lied to you, this is what happened:

Bush’s proposed FY2009 budget called for spending of only $3.11 trillion, which was just a 3% increase. Democrats controlled the Congress and were certain that Obama was going to get elected. They wanted to wait to set 2009 spending levels on much of the government until he was in office.

The Democrat-controlled Congress only passed THREE of FY2009′s 12 appropriations bills for Bush to sign before 1 October 2008, the beginning of FY2009: Defence, Homeland Security, and Military Construction and Veterans Affairs.

So, Bush signed a Continuing Resolution into law on 30 September 2008.

It expired on 6 March 2009.

On 11 March 2009, President Barack H. Obama signed the FY2009 budget into law. Furthermore, Bush is not responsible for the Supercalifragilisticexpialidocious Stimulus Act of 2009, the Defence Supplemental of 06.09 loaded with pork, Cash-for-Clunkers, Cash-for-Caulkers, Unemployment Insurance extensions, Making Home Affordable, a massive $680 billion defence bill in September – once again laden with pork, etc.

President Obama and his Democrat Congress ended up spending $3.52 trillion in 2009, which represented a 17.9% increase in spending — the highest single-year percentage spending increase since the Korean War.

By January 2010, spending as a percentage of GDP was 25.24% — the highest it had been in the United States since World War II.

Yes, Obama’s spending as a percentage of GDP has gone down, but only ever so slightly. During George W Bush’s 8 years as president, spending averaged 19.6% of GDP. Under President Clinton, spending as a percentage of GDP was 19.8%. In the decades following World War II, the average has been 19.7%. The average for Obama’s first term is projected to be 24.3%.

You can read more in detail here: The Big Lie: Obama Is A Budget Hawk

A word of advice: Saying, “Reagan did it first!” or “Bush did it, too!” is not a denial. It is a CONFESSION.

Anyhoo, the truth is the truth. Period. End of story. If you can’t handle it, that’s your problem. Meanwhile, Obama’s spending is the world’s problem. What do you think the America and the rest of the world will look like after the US collapses? I don’t believe that America should be the world’s policeman, but if you think Sweden is going to stand up to China or Iran, you’re seriously deluding yourself and endangering the rest of us.

So, you see, I don’t need to be told why Democrats didn’t pass Bush’s budget and wanted to wait until Obama was in office. I wrote about it years ago.

Resist We Much on December 31, 2012 at 8:22 PM

Man, this little bitch is a major uck. Let it burn burn burn. Vote present and don’t go to this clowns State of the Union. He’s a punk.

Hummer53 on December 31, 2012 at 8:25 PM

Just got back. Had to clear my head over at http://www.peopleofwalmart.com/?p=56653

davidk on December 31, 2012 at 8:28 PM

Obama just had what was possibly the most insulting press event I’ve ever seen from a President — I’ll post the video when available, it will infuriate you.

He spiked the football, overtly insulted Republicans and Congress, and laughed that he is on the verge of getting what he wants. Either he wants to nix any deal, or he’s actually just enjoying his victory but is emotionally incapable of being presidential about it.

Everything you ever wanted to know about our disfunctional government was on display.

http://legalinsurrection.com/2012/12/in-your-face-republicans/

davidk on December 31, 2012 at 2:26 PM

In Obama’s defense, it’s easy to get carried away when you’re surrounded by worshippers and feel the need to show off.

After all, this was a press conference…..

tom on December 31, 2012 at 8:48 PM

In Obama’s defense, it’s easy to get carried away when you’re surrounded by worshippers and feel the need to show off.
After all, this was a press conference…..
tom on December 31, 2012 at 8:48 PM

LOL!

txhsmom on December 31, 2012 at 8:50 PM

Feckless, contemptable community destroyer. We need a tax revolt regardless of the outcome of the political hunger games. They would only understand people taking to the streets by the millions.

wepeople on December 31, 2012 at 8:56 PM

If this deal looks ANYTHING like what is described over at redstate.com the EVERY Republican that votes for it should FIRED.

There is now a NEW WELFARE PROGRAM in this ‘deal’ and spending will go up by HUNDREDS of BILLIONS a YEAR!

Now, since we cannot fire them, this may well be the defining moment that SPLITS the Republican party. There will be NO REASON for any conservative to vote for ANY Republican that votes for this SPENDING bill as the next speaker of the house.

Freddy on December 31, 2012 at 9:02 PM

Freddy on December 31, 2012 at 9:02 PM

Republican Party – RIP…idiots.

Decoski on December 31, 2012 at 9:07 PM

Feckless, contemptable community destroyer. We need a tax revolt regardless of the outcome of the political hunger games. They would only understand people taking to the streets by the millions.

Who cares when “conservatives” won’t stand up to him.

There’s no such thing as a conservative politician.

newtopia on December 31, 2012 at 9:22 PM

Fiscal Cliff
************

December 31, 2012, 9:27 p.m. ET

Deal’s Likely Impact: More Slow Growth
***************************************

WASHINGTON—Brace for painfully slow growth, but not necessarily a recession.

The deal struck Monday between the White House and Senate Republicans would prevent the sudden across-the-board spending cuts and a jump in income-tax rates that had raised fears of a 2013 recession. But it would leave in place tax provisions—and tee up more battles over budget policy—that are likely to weigh on economic growth in the new year.

The agreement could still fall apart, or fail to pass in both chambers of Congress. But if enacted, it would make permanent existing income-tax rates for about 99% of U.S. households, removing the uncertainty about taxes that has sapped their confidence. It also would reassure many middle-class families that they can count on stable tax rates on dividends and other investment income.

Individual income-tax rates and investment taxes would rise for households making more than $450,000 a year. The tax increases on these families would exert a very slight drag on the overall U.S. economy in 2013.

The biggest hit to 2013 growth appears likely to come from the payroll-tax holiday’s expiration on Monday. The deal reached by the White House and Senate Republicans wouldn’t extend this tax break.

The workers’ share of the Social Security payroll tax had been lowered by two percentage points for the past two years, to 4.2% from 6.2%, amounting to an annual income boost of $1,000 for a typical U.S. family earning $50,000 a year. It provided an increase of as much as $2,202 this year for a worker earning $110,100, the maximum wage subject to the payroll tax.

The end of the tax break would effectively raise taxes for all wage earners next year, a potential surprise for many despite the expected extension of most individual income-tax rates. That would mean the highest tax burdens since 2008 for most U.S. households, before the Obama administration pushed a tax credit in the 2009 stimulus law and the payroll-tax break.

The rise in payroll taxes would amount to about $125 billion a year, or about 0.8% of the nation’s overall output, according to J.P. Morgan Chase JPM +1.69% . According to many forecasters, that would slow the pace of U.S. economic growth by about half a percentage point next year, a sizable amount for an economy growing about 2% a year.

The expected increase in payroll taxes is one reason many economists already are worried about the economy’s strength in the first half of 2013. “We continue to anticipate a significant economic slowdown at the start of the year in response to fiscal drag and a contentious fiscal debate,” said Nomura economist Lewis Alexander. He predicted that Monday’s deal would be “only a short-term positive.”

The deal would extend many existing policies, including federal unemployment benefits, which were set to expire at the end of 2012 and threatened to cut off 2 million jobless Americans.

The pact appears to defer decisions in two major areas. The $110 billion in across-the-board cuts to annual government spending would be delayed for only two months instead of beginning this week. And the agreement leaves looming a new battle over raising the federal debt ceiling.

The U.S. hit the debt limit of $16.4 trillion on Monday, setting in motion about two months of extraordinary measures to delay a U.S. default. A deal to raise the borrowing cap would be needed by early March, after what is likely to be another contentious debate between Republicans in Congress and the White House over whether it requires offsetting government-spending reductions. Without an increase in the debt ceiling, the government at some point would be unable to pay all its bills.

Many analysts expect investors, businesses and consumers to remain on edge as uncertainty in Washington continues. Consumers’ confidence in the economic outlook plummeted in December as a result of the recent budget negotiations, following an earlier slide in confidence among businesses.

“The erosion of confidence has very negative consequences for the economy,” said Sung Won Sohn, an economist at California State University Channel Islands. “Businesses are reluctant to hire people and invest in plant and equipment.

Consumers are cautious about opening their wallets.”
=====================================================

http://online.wsj.com/article/SB10001424127887323635504578214171867246846.html

canopfor on December 31, 2012 at 9:36 PM

canopfor on December 31, 2012 at 9:44 PM

Either way, I apologize to you. You didn’t deserve the slam. We’ll call it friendly fire.
RovesChins on December 31, 2012 at 5:34 PM
I apologize for overreacting to your quoting error earlier.
It seemed to me that both of us that you were quoting were coming from the same direction, and that by including both our quotes in the same bracket you were calling us cop-haters – calling me personally a cop-haters.
As you can imagine, that made me very angry. Your comment was pretty aggressive, either way.
When I quote others who are reacting to an earlier comment, I am quite careful to bracket each comment separately in quotes, so that there is no misunderstanding.
But I see what you did, upon re-reading it.
It didn’t help to calm things down when you responded to my instant outrage by doubling down with a blanket denigration of the people of New Orleans. That made me angrier, given that I went through Katrina and felt that now you were going to a broad-brush, ad-hominem attack on my fellow Louisianans.
But I do apologize for my premature GFY escalation, before I saw your quoting error.
As you said, “friendly fire,” and so I am apologizing.
Sorry to the management for the quick escalation.
cane_loader on December 31, 2012 at 7:08 PM

Cane…we’re on the same side…I am partial, my whole family are cops. Protective is an understatement. But, as I jumped on your people, as you jumped on your PD, I was lumping all in one category.
I apologize for attacking your locale. It was wrong. And, now you will understand my fierce loyalty to our law dogs.
Happy New Year and continued health and wealth to you and yours.

RovesChins on December 31, 2012 at 9:57 PM

Feckless, contemptable community destroyer. We need a tax revolt regardless of the outcome of the political hunger games. They would only understand people taking to the streets by the millions.

Who cares when “conservatives” won’t stand up to him.

There’s no such thing as a conservative politician.

newtopia on December 31, 2012 at 9:22 PM

There was but he’s retired now. Ron Paul was and is a conservative but you see how he was treated. People actually supported Mitt Romney (Obama’s twin) over him. Unbelievable. The GOP deserve Obama for 4 more years, possibly more. And we sit here and give a sh!t what Obama says about a “fiscal cliff”. I think I’ll go throw up now for using that term. I’m so sick of hearing it.

air_up_there on December 31, 2012 at 10:09 PM

Obama’s on a big high, going from triumph to triumph. Look out below because you know which way the shiite rolls.

claudius on December 31, 2012 at 10:34 PM

Fox reporting Senate vote tonight. Crap!

txhsmom on December 31, 2012 at 10:57 PM

p o s !

KOOLAID2 on January 1, 2013 at 2:38 AM

Passed the Senate 89-8

So was this a “win”? Does anyone still care?

tkyang99 on January 1, 2013 at 4:07 AM

The Senate got the deal through in the middle of the night. Stealth action mode. Our Senators think that they are political ninjas. Lol. Anyway, good for them. No cliffy crap anymore.

tommy71 on January 1, 2013 at 7:18 AM

All a sham to raise taxes by both parties and blame it of Fiscal Cliff.

albill on January 1, 2013 at 8:51 AM

Obama and his Congress Of Idiots would now like for all of you to open your mouths and chow down on this crap sandwich!

pilamaye on January 1, 2013 at 10:02 AM

What this country needs right now more than anything is our own answer to Gerard Depardieu!

pilamaye on January 1, 2013 at 10:04 AM

Did prezzy get to fly back to his family in HI last night since the deal is done, so to speak? He flew all the way out there, played some golf, flew back, make an appearance, gave govt workers a raise, delegated the negotiations to Biden, and made an appearance acting like the arrogant azzhat we all know. He must have had a bigggg party planned for last night in the WH. In the meantime, some of the pawns, I mean people in the country got played. It’s what he does best. Now he’s free to move onto the next big thing, taking our guns. Did you know, we’re the largest standing army in the world. No wonder the Chicoms are for confiscation.

Kissmygrits on January 1, 2013 at 10:28 AM

I wonder if the baboons and lemmings in Congress and the runaway regulators in the Administration have considered the possibility that their continuing tendency to ignore the interests of their constituents might well result in their constituents reciprocating by IGNORING BOTH CONGRESS AND THE ABUSIVE BUREAUCRATS!!

This is NOT an uprecedented result. Viz: “Prohibition,” “Underground Economy,” “States Rights movement,” etc.

Those who fail to remember that government can only work with consent of the governed are due for a big shock when this inevitable correction occurs!

landlines on January 1, 2013 at 2:07 PM

Mike Lee, R-Utah; Rand Paul, R-Ky.; Richard Shelby, R-Ala.; Michael Bennet, D-Colo.; Chuck Grassley, R-Iowa; and Marco Rubio, R-Fla.

These men stand alone. All the rest should go.

Starlink on January 1, 2013 at 10:54 AM

*snerk* Too bad this thread isn’t still young and fresh, I’d like to see the frothing when a Paul is, once again, shown to be one of the few willing to stand and be counted.

MelonCollie on January 1, 2013 at 3:15 PM

The only program which will not mention “he who will not be named” is Glenn and he is the only station/program I will listen to for the next 4 years. Way to go Glenn! I’m so sick of this attitude that, he who will not be named, has. He no more tries to represent all of this country than barney frank!
He has such a smug attitude and away he flies to hawaii again for another 7 million.
Well you who voted for him and especially the NY Jews – enjoy what’s coming. Don’t complain to anyone!

Bambi on January 2, 2013 at 11:46 AM

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