Reply #5: Somewhere in between

[Inuca]

and tired and frustrated and mad.

To add to MBS's good list of readings http://www.washingtonpost.com/blogs/ezra-klein/post/a-deal-that-found-the-lowest-common-denominator/2011/07/11/gIQAde9TmI_blog.html A deal that found the lowest-common denominator Ezra Klein I won't paste an excerpt because it all ties together. (Almost) understandable synopsis of what is in the deal and its implication short and medium term. The titel tells much of the story. One important thing that I got out of the article is that the defense cuts that are part of the trigger are VERY drastic, meant to "hurt" as much as tax increases (hope he is right). OK, I chamged my mind :-), here are a few paragraphs:

Confused? That seems to be the point. Boehner is misleading his members to make them think taxes are impossible under this deal. But make no mistake: The Joint Committee could raise taxes in any number of ways. It could close loopholes and cap tax expenditures. It could impose a value-added tax, or even a tax on carbon. The Congressional Budget Office would score all of this as reducing the deficit under a current-law baseline. The only thing that wouldn’t reduce the deficit is going after part of the Bush tax cuts. That means they’re likely to go untouched in this deal.


That’s actually good news for...people who want to raise taxes. The Bush tax cuts will still be set to expire in 2012, which means that if Democrats get some revenue as part of this deal, they’ll be able to get more revenue if Congress gridlocks over the Bush tax cuts in 2012.



But that’s really a technicality. Boehner is promising that he’ll oppose any deal that includes revenue, and unless he decides to break his promise next year, that means the House is unlikely to pass any deal that includes revenue. So that leaves us with three options: 1) there’s no deal and the trigger goes off, 2) the Democrats agree to $1.5 trillion in further spending cuts alongside zero dollars in tax increases, or 3) Republicans agree to revenues.