PROGRESS? – AT 8:58 A.M. ET: The end of the world will occur in three days, according to the Mayan calendar. But after that comes something worse, the fiscal cliff. But there may finally be a deal in the works. Whether it's good or bad is another story, but the press is reporting "progress." From WaPo:
President Obama and House Speaker John A. Boehner moved close to agreement Monday on a plan to avert the year-end “fiscal cliff,” but they had yet to clear several critical hurdles, including winning the support of wary House Republicans.
Obama and Boehner (R-Ohio) huddled at the White House for 45 minutes Monday morning for their third conversation in the past five days. Later, Boehner met for an hour at the Capitol with his leadership team in advance of a briefing Tuesday morning for the entire House GOP that could be a crucial test of Boehner’s ability to sell the deal.
Behind the scenes, administration officials and senior Republican aides continued to make progress. Obama laid out a counteroffer that included significant concessions on taxes, reducing the amount of new revenue he is seeking to $1.2 trillion over the next decade and limiting the hike in tax rates to households earning more than $400,000 a year. Obama had previously sought $1.4 trillion in new revenue, with tax increases on income over $250,000.
Obama also gave ground on a key Republican demand — applying a less-generous measure of inflation across the federal government. That change would save about $225 billion over the next decade, with more than half the savings coming from smaller cost-of-living increases for Social Security beneficiaries.
In addition, Obama increased his overall offer on spending cuts and dropped his demand for extending the payroll tax holiday, which has benefited virtually every worker for the past two years. But he is still seeking $80 billion in new spending on infrastructure and unemployment benefits and an increase in the federal government’s borrowing limit large enough to avert any new fight over the issue for two years.
COMMENT: It's hard to tell from the descripton what the exact details will be. It's now pretty much assumed that there will be some tax increases for the wealthy. First, it's politically popular, and, second, the GOP doesn't want to be tagged as the "party of the rich."
But where are the spending cuts? We hear about "entitlement programs," which aren't entitlement programs at all. They're insurance programs, like Social Security and Medicare, and people have paid into them, sometimes heavily. They don't like them referred to as "entitlement programs," as if they're some kind of charity. The problem is that the premiums won't continue to cover the outlays, and changes must be made.
But what about other changes, other cuts? Why don't we start looking at these sacred cows, which have become very un-sacred? What about federal aid to education? Where is it actually going? Who is is going to? How effective is it? And foreign aid to ungrateful nations, or even hostile nations? Why?
This discussion is just beginning. The trouble is, once an initial deal is completed, the important questions probably won't be asked.
December 18, 2012