How to evaluate fiscal cliff proposals

So, due to the quirky fact that all tax cuts are slated to expire at year’s end, it’s inevitable that Republicans will have to make some sort of concessions to limit tax increases. But at the same time, Obama’s leverage only goes so far. …

What would conservatives receive in exchange for agreeing to several hundred billion dollars more in tax hikes than Obama campaigned on, plus a debt-limit increase and possibly more stimulus spending? In a Tuesday press conference, Boehner said he’d support $1 trillion in tax increases in exchange for $1 trillion in spending cuts that include some entitlement reforms.

When evaluating any such deal in the coming weeks, conservatives should look carefully at how any spending cuts are calculated and how realistic it is that they’ll go into effect. Any new stimulus spending, any effort to delay or replace the automatic spending cuts scheduled to go into effect on Jan. 1 as part of the 2011 debt-ceiling deal (the so-called sequester), any effort to delay scheduled cuts to doctors’ payments in Medicare (known as the “doc fix”), should be deducted from any spending-cut claims. At the same time, any promises to set up a mechanism to deal with tax reform or entitlement reform next year should be greeted with severe skepticism.

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