Weekly Digest – January 20, 2013

100th post!!!


“The Joint Committee on Taxation (JCT) and Congressional Budget Office estimate that making permanent all of the Bush tax cuts would have cost $3.4 trillion over 2013-2022…JCT estimates show that [the American Taxpayer Relief Act of 2012] makes all but $624 billion of those $3.4 trillion in tax cuts permanent.   It thus makes permanent 82 percent of the Bush tax cuts, while letting 18 percent expire.”

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Fiscal Cliff Status Update: 31 December 2012, 2000 hrs

Jared Bernstein (with emphasis added):

From what I’m picking up in the ether (and from Ez Klein’s tweets and from here) it sounds like a deal is forming to avoid the cliff…

[details of the deal]

…So, here’s my first blush response to this deal.  The thing that worried me most in the endgame is that the WH would be so intent on a deal that they’d lock in too few revenues with no path back to the revenue well, and that they’d leave the debt ceiling hanging out there.  Remember, the ultimate goal of Repubicans here is still to “starve the beast”–to shrink government by hacking away at both sides of its ledger–receipts and outlays.

Those fears will be realized unless the President really and truly refuses to negotiate on the debt ceiling and is willing to blow past those who would stage a strategic default.  If he is not, and if this cliff deal passes, then I fear the WH may have squandered its hard won leverage.

So, for the 729th time, if the deal stinks then walk away.  Go over the Cliff and start negotiating – from a position of strength – in January.  No deal is better than a shitty deal.  Any questions?


Fiscal Cliff Status Report: 28 December 2012

NY Times, Obama to Urge Fiscal Vote in Senate if Two-Party Talks Fail:

President Obama said Friday evening that progress had been made in make-or-break talks on the fiscal crisis and pronounced himself cautiously “optimistic,” as Senate leaders worked furiously toward an agreement to avert the worst of the economic punch from landing Jan. 1.

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Fiscal Cliff Status Report: 20 December 2012

From the NY Times:

WASHINGTON – House Republican leaders abruptly pulled their fallback tax bill from the floor Thursday night, conceding that they did not have the votes to pass it.

“The House did not take up the tax measure today because it did not have sufficient support from our members to pass,” Speaker John A. Boehner said in a statement.

Wow, big surprise there…

Krugman: Continue reading

Fiscal Cliff Status Report: 8 December 2012

Not to belabor the point, but here’s Robert Reich, Today’s [Friday, Dec.7] Job Numbers Show Why Job Creation Must Take Precedence Over Deficit Reduction (emphasis added):

Yes, unemployment is down slightly and 146,000 new jobs were created in November. That’s some progress. But don’t be overwhelmed by the hype coming out of Wall Street and the White House, both of which would like the public to believe things are going quite well.

The fact is some 350,000 more people stopped looking for jobs in November, and the percent of the working-age population currently employed continues to drop — now at 63.6%, almost the lowest in 30 years. [Here’s the data.] Meanwhile, the average workweek is stuck at 34.4 hours. Continue reading

Bruce Barlett, The Debt Limit Is the Real Fiscal Cliff

Bruce Barlett points out that hitting the debt limit – more specifically, the GOP forcing us to default on debt payments – is likely to be a much more serious issue than the Fiscal Clif:

Much of what passes for fiscal-cliff concern is actually anxiety about whether Republicans in Congress will force a default on the nation’s debt in pursuit of their radical agenda.

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Fiscal Cliff Status Report: 3 December 2012

I just discovered the NYT’s Debt Reckoning blog.

The White House’s response to the GOP’s ‘counteroffer’ (emphasis added):

“The Republican letter released today does not meet the test of balance,” said Daniel H. Pfeiffer, the communications director. “In fact, it actually promises to lower rates for the wealthy and sticks the middle class with the bill. Their plan includes nothing new and provides no details on which deductions they would eliminate, which loopholes they will close or which Medicare savings they would achieve.

But hey, it’s a counteroffer and Obama’s people are obviously partisan so maybe we should take it seriously, right?  Maybe not…  Jared Bernstein with his quick look assessment.

Oh, and Vanguard Chairman Bill McNabb blows his credibility: Continue reading