CNN reports on the latest in the fiscal cliff talks. The gist is that the discussions are focused on a $2 trillion framework that includes roughly equal amounts of spending cuts and new revenues. John Boehner will relent on rates, but only on income over $1 million. All the rest of the $1 million in revenues would come from closing loopholes, which appear to still be unspecified.
Meanwhile, reports that Boehner is relenting on the debt ceiling may be exaggerated, and he’s still pushing for deep entitlement cuts:
Democratic sources tell CNN part of the issue now is that the trillion in spending cuts comes from some changes to entitlement programs such as reforms to Medicare – along with a discussion of raising the eligibility age. These Democratic sources say it is unclear if those Medicare changes could pass the House or Senate, because they may be too deep for many Democrats. [...]
The plan under discussion now also includes an increase in the debt limit for some period of time — potentially a year. But an aide to Boehner notes that this part of the agreement is contingent on the size of the spending cuts — the speaker remains committed to his rule that the cuts and reforms have to be greater than any increase in the debt ceiling.
A couple quick points about this. First, it looks as if it’s premature to take the Medicare eligibility age out of the equation; earlier reporting saying that Republicans had dropped the demand for a hike in the age was apparently wrong. That said, CNN suggests Dems remain close to uniformly opposed to it, which dovetails with my earlier reporting.
Second, it’s simply amazing that Republicans continue to argue that any eventual agreement to raise the debt ceiling will be a concession on their part that should be purchased with concessions by Dems. Republicans are asking to be rewarded for their eventual agreement on something that will avoid doing damage to the whole country, something John Boehner knows he will ultimately have to do. As Steve Benen puts it: “he’s going to have to raise the limit anyway. It’s not optional, unless he’s serious about crashing the global economy on purpose.” I can only hope that this is nothing but bluster from Boehner, designed to appease Tea Partyers who will soon asked to make big concessions (bigger than the ones Boehner is currently offering) on taxes.
Third, it seems that under the current framework Republicans are still asking Dems to make the great majority of the concessions here. Taxes would not go up on income between $250,000 and $1 million, foregoing hundreds of billions in revenues, to be made up for by the closing of loopholes and revenues that (naturally) remain unspecified. And they are also asking for deep entitlement cuts that are a nonstarter for most Democrats. Meanwhile, the debt ceiling is still being used as a point of leverage for Republicans to get what they want. This simply cannot be allowed to stand.
So: This is still a bad deal. However, judging by the relative silence today, it looks like serious conversations are underway now. Let’s hope they aren’t too centered on the above framework.
Update: Also, as Paul Krugman notes, the current framework contains no stimulus, no extension of unemployment benefits.
Update II: Okay, Erza Klein has a bit more that may mitigate things. Seems the agreed-upon cutoff for the hike in revenues could end up in between $1 million and $250,000. Maybe taxes go up — for now — on income over $500,000, with a locked in target for additional revenues set for later (so tax reform later would have to bring in more). And Medicare cuts would be worked out later by Congress, so Dems could fight next year against a hike in the eligibility age.