The ‘grand bargains’ that aren’t
By Ezra Klein,
WashPost
Monday, June 20, 1:27 PM
I used to know what people were talking about when they called for a “grand bargain” on the deficit: Democrats would give in on spending cuts, and Republicans would give in on tax increases. Today, we’re on the verge of a couple of grand bargains. But whatever the Republicans are giving in on, it isn’t taxes.
The first grand bargain will come by August, when the clock strikes midnight on the debt ceiling. Insiders in both parties think they have a good sense of what that deal will include: about $2 trillion in deficit reduction over the next 10 years, almost all of it from spending cuts, plus an agreement on a budget path for the next decade and a policy that makes deep, automatic cuts if we’re not hitting our deficit-reduction targets by 2014. But what’s the bargain here? Democrats give in on spending cuts and Republicans give in on not destroying the nation’s credit?
The second deal will come in 2012, when the Bush tax cuts are set to expire. The tax cuts, which cost $2 trillion over the past decade and will cost an additional $4 trillion over the next decade, have done more than any policy initiative in the past decade — including the wars and the stimulus — to turn the surpluses of the ’90s to the deficits we face today. If you let them expire, the national debt stabilizes until well into the 2020s.
But we’re not going to let them expire. The Republican Party wants to extend all of the Bush tax cuts and the Obama administration wants to extend most of them — the exception being the cuts for income over $250,000. If all goes as the Democrats hope — and when does that happen? — the bargain here will be that they’ll agree to make more than $3 trillion in tax cuts permanent if Republicans agree to drop their demand to make more than $4 trillion in tax cuts permanent.
(More here.)
WashPost
Monday, June 20, 1:27 PM
I used to know what people were talking about when they called for a “grand bargain” on the deficit: Democrats would give in on spending cuts, and Republicans would give in on tax increases. Today, we’re on the verge of a couple of grand bargains. But whatever the Republicans are giving in on, it isn’t taxes.
The first grand bargain will come by August, when the clock strikes midnight on the debt ceiling. Insiders in both parties think they have a good sense of what that deal will include: about $2 trillion in deficit reduction over the next 10 years, almost all of it from spending cuts, plus an agreement on a budget path for the next decade and a policy that makes deep, automatic cuts if we’re not hitting our deficit-reduction targets by 2014. But what’s the bargain here? Democrats give in on spending cuts and Republicans give in on not destroying the nation’s credit?
The second deal will come in 2012, when the Bush tax cuts are set to expire. The tax cuts, which cost $2 trillion over the past decade and will cost an additional $4 trillion over the next decade, have done more than any policy initiative in the past decade — including the wars and the stimulus — to turn the surpluses of the ’90s to the deficits we face today. If you let them expire, the national debt stabilizes until well into the 2020s.
But we’re not going to let them expire. The Republican Party wants to extend all of the Bush tax cuts and the Obama administration wants to extend most of them — the exception being the cuts for income over $250,000. If all goes as the Democrats hope — and when does that happen? — the bargain here will be that they’ll agree to make more than $3 trillion in tax cuts permanent if Republicans agree to drop their demand to make more than $4 trillion in tax cuts permanent.
(More here.)
Powered by Blogger
0 Comments:
Post a Comment
<< Home