To be sure, I usually try to be. While the rational expectations school is not impressed by accurate predictions-chalking them up to luck as no one can beat the market long term. However, all that very well may be, I have throughout this debate voiced my opinion that they would get a deal.
http://diaryofarepublicanhater.blogspot.com/2012/12/president-stands-tall-on-fiscal-curb.html
http://diaryofarepublicanhater.blogspot.com/2012/12/boehners-new-plan-for-abidcation-of-his.html
http://diaryofarepublicanhater.blogspot.com/2012/12/boehners-new-plan-for-abidcation-of-his.html
http://diaryofarepublicanhater.blogspot.com/2012/12/there-should-be-fiscal-cliff-deal.html
Some, of course, aren't so sure about thid deal. You've got the very serious people worrying about it not being a "grand bargain" or cuttng any spending:
"But as big a deal as it was, it did little to address the nation’s long-term deficit problem — there’s nothing in it to pare back entitlement spending — or to defuse a potential crisis over raising the debt ceiling that could come as early as February."
Read more: http://www.politico.com/story/2013/01/senate-clears-fiscal-cliff-deal-89-8-85640.html#ixzz2Gj8dQ1oi
Well, of course, we don't really want to be wholly eliminating the deficit in the middle of a recession-or at least in an economy with a lot of recovering yet to do-or at least we certainly don't want cut the deficit in the wrong way. No entitlement cuts is a good thing. This should please liberals though right now many are worrying. We are getting no entitlement cuts.
True, the debt ceiling and a fight over sequesters in 2 months looms. I'm not thrilled by this. Yet the idea that the GOP will get to tackle spending later is what has led many to take a deal. Should we disabuse them of this now? My guess is that the debt ceiling wont be the smoking gun they think it will be. While they look back on the 2011 debt ceiling fight as a victory where they got over $1 trillion in spending cuts and no revenue, they are forgetting that half of those cuts were military cuts that they don't like-and many liberals do like.
More importantly they are forgetting the major political hit their party took. I would argue that the seeds of their November 6 debacle begun with the disgust the country felt for the way they remorselessly held the debt ceiling hostage. Whatever they may imagine they can force through, the political fallout will be worse this time.
The country voted against a Paul Ryan style cut to Medicare. If they think they will achieve this with the debt ceiling they are fooling themselves. As their friend Bill Kristol admitted the Sunday on Fox after the election, elections have consequences. No, the debt ceiling is no their trump card to evade those consequences.
Congress lost a mad, New Year’s Eve dash to beat the fiscal cliff deadline, cinching a deal with President Barack Obama to raise taxes on the wealthy and temporarily freeze deep spending cuts but failing to get it through both chambers before midnight.
So over the cliff the country went — though perhaps for only a day or two and, assuming no snags, without incurring the double whammy of another recession and higher unemployment.
The measure, which would raise tax rates for families making more than $450,000 and delay deep across-the-board spending cuts for two months, cleared the Senate by an overwhelming 89-8 vote shortly after 2 a.m. The Republican-controlled House could take up the pact in a rare New Year’s Day session, though the timing of that chamber’s vote was not clear.
The $620 billion agreement was a major breakthrough in a partisan standoff that has dragged on for months, spooking Wall Street and threatening to hobble the economic recovery. It turned back the GOP’s two-decade-long refusal to raise tax rates, delivering a major win for the president.
Read more: http://www.politico.com/story/2013/01/senate-clears-fiscal-cliff-deal-89-8-85640.html#ixzz2GjCbKVVn
Again, many liberals aren't happy. MoveOn.org opposes the deal. I saw Robert Reich opposing the deal on CNN last night. It was surreal. Norquist supported the deal and Reich opposed it. I never thought it would happen but I agree with Norquist. He's even right that it's not a tax increase-thought that's not how he looked at it in the past.
Huffingtonpost has a front page that screams the headline"So long leverage." The worry is about the debt ceiling. Here is Josh Marshall over at Talking Points Memo:
"I hadn’t seen this post by Noam Scheiber until now. He has a far harsher take on the deal. But at the end, he and I seem to have a fairly similar take, which is that the deal itself isn’t too bad purely on its own terms. What’s worrisome is what it portends about the next confrontation and the one after that."
"On this latter point we seem to have a somewhat different perspective. Noam thinks that Obama is signaling, again, that he’ll always back down and that that emboldens Republicans to be even more reckless and aggressive during the next confrontation in which the consequences are actually much more dire. My take is more that the next confrontations simply come on terrain much more favorable to the GOP — since Obama will no longer have the tax cudgel over them. So similar conclusion but different reasoning to get there."
"For all of you trying to figure out what the unseen force is that prompted President Obama to take this deal now rather than simply go over the cliff and be in an even better position post-cliff, I think I have a good answer for you. All the arguments about Obama caving and being a bad negotiator and all the rest leave out one simple and fairly sufficient factor — Obama really wants a deal. That means more than it sounds like it means. He doesn’t want a deal at all costs. That greatly overstates it. But a deal to some real degree for the sake of finding common ground and having a deal is a big consideration for him. That’s not my personal disposition or the way I meet the world. But it is his. And once you get that, the storyline starts to make more sense."
"As I noted before — in this post and the one from this afternoon — it all comes back to the debt ceiling. He says that’s not negotiable. That’s exactly the right position. But it’s much much easier said than done. Whether and how he’s able to pull that off will tell us everything about whether or not this deal made sense."
http://talkingpointsmemo.com/archives/2012/12/still_more_2.php?ref=fpblg
I've already explained why I think the debt ceiling will not be the smoking gun the GOP thinks it is, though it is a worry as it's a-pretty large-loose end. Still I don't think it will be as bad as so many fear-as the GOP won't get the leverage they think they have-even though I don't understand the reluctance according to Josh Marshall that the Obama team has to 'go 13th amendment.' Obama and Geithner have called for the end of the debt ceiling so in light of that how can they be afraid of the bond vigilantes. Hasn't no fact been more clear during this Lesser Depression than that the bond vigilantes are paper tigers?
.
I don't think the President made any tactical mistake in getting a deal here, nor do I even agree with Marshall that he gave in to some proclivity to always want to find common ground. There was real pain in going over the cliff as we would have all seen our taxes go up and the unemployed would have been left high and dry. Now their benefits are extended throughout 2013 without any spending cut to offset.
The glass half full sees the Republicans, including even Norquist, accepting major tax hikes. I don't think there's anything wrong with a $400,000 floor rather than $200,000 by the way. I kind of always felt that the $200,000 was a little low-someone at that level is hardly rich.
True, it's less revenue. However, there will also be reduction in deductions for those over that level and while I'm not thrilled with the estate tax remaining at $5 million-and being indexed to inflation; the rate is going up slightly from 35% to 40%-remember that the capital gains and dividend taxes are going back up to Clinton rates-and also remember that the ObamaCare tax of 3.8% on investment income that Sumner is always kvetching about is set to start in 2014.
The GOP has really caved on taxes. The Dems moved up on the income rate just slightly-Boehner's Plan B had just been for those over $1 million. In addition we have no new spending cuts. So this is a big win. All the GOP is really getting is the hope that they'll get what they want another day.
As for the House I expect them to pass it. The only way it doesn't pass is if Boehner refused to let it come to the floor. He has vowed to allow it. With the large amount of Republican Senate support, there should be more than enough GOP support in the House-remember most Democrats will support it so you don't need many GOP House votes.
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