The outlines of a deal have emerged. Obama’s latest offer: Taxes go up on income over $400,000, rather than $250,000. The new revenue target is $1.2 trillion — which would be met by limiting itemized deductions. The debt ceiling issue would be taken off the table for two years. It’s unclear whether Republicans will support it, but movement appears underway.
On the spending cut side: $800 billion, including defense cuts. No rise in the Medicare eligibility age, but there would be “chained CPI” on Social Security, i.e., a change in the measurement of inflation that amounts to a benefit cut. While the hard line on Medicare is good, in essence, the emerging framework keeps taxes low on income between $250,000 and $400,000, while raising taxes on the middle class (the payroll tax cut would expire) and cutting Social Security.
However, according to an official familiar with the talks, the White House continues to insist on various ways of softening the blow of “chained CPI” that are supported by progressive economists, though the details are still unclear. The liberal Center on Budget and Policy Priorities is willing to support “chained CPI” if it is offset with a small increase in Social Security benefits for longtime beneficiaries and an exemption of of Supplemental Security Income, which is geared towards the poor and disabled. And so, a lot will depend on what the final agreement on Social Security looks like.
The left looks to be mobilizing to pressure Harry Reid not to accept any Social Security cuts, because he previously said Social Security should not be part of any deal. A senior Senate Dem aide tells me that Reid is not prepared to accept the emerging deal yet; he wants to talk to his caucus about it first.
The big picture: With this deal Obama will have broken the GOP’s fundamentalist opposition to raising tax rates on the rich (albeit only on income over $400,000) something that would have been deemed very unlikely a year ago. He will have held the line against the GOP demand for two years of Medicare — a victory. Debt ceiling hostage taking will have been deferred for two years, meaning it won’t get tied up in the next elections. He will have obtained stimulus spending — on infrastructure, and in the form of an extension of unemployment benefits — and as Paul Krugman notes, that wouldn’t happen if we go over the cliff. (I’m told the talks have not focused on the exact sum of stimulus spending the White House wants.) The price: The expiration of the payroll tax cut and the cut in Social Security benefits. That’s bad, but the damage could be limited, if the White House insists on it.
Obama told us both sides would have to get out of their “comfort zones” in the quest for a deal, and it has been apparent for some time that he prefers a deal to going over the cliff. We now are beginning to see what getting out of that comfort zone looks like.
* Public opposes cut in Social Security benefits: A new Washington Post poll finds that 56 percent want Obama to compromise in the fiscal cliff talks, but a whopping 65 percent disapprove of the GOP’s handling of the negotiations. And big majorities also favor raising taxes on the rich and oppose any cuts to entitlements. Indeed, 60 percent say changing the way Social Security benefits are calculated is “unacceptable.”
And so the White House will be on very solid ground if it insists on the measures to soften the “chained CPI” blow.
* The silence from the NRA continues: The Times has a terrific look at the true dimensions of the National Rifle Association’s unrelenting push to expand the availability and legal use of guns and the amount of pressure it puts on Republicans who dare deviate even a hair from its absolutist line. One overlooked fact is that “gun rights” groups continue to push on the state level for changes designed to make it legal to carry concealed weapons pretty much everywhere.
When it comes to the Newton shooting, there’s still radio silence from the NRA’s Twitter feed.
* How to fight back against the gun lobby: Bloomberg News has an excellent piece laying out the basic facts about the specific policies we can be pushing for in the wake of Newtown. Every member of Congress should be asked whether he or she disagrees with the following statement:
No gun should be sold in the U.S. without the buyer’s identity being checked against a national database.
Meanwhile, Senator Dianne Feinstein is pushing for a ban on assault weapons and on the type of high capacity magazine that has been used in recent massacres; more later on the prospects for getting it through Congress.
* Divesting in Bushmaster underway: This is a key tell: A private equity firm is selling off its investment in Bushmaster, the gun used in Newtow, for the explicit reason that the shooting was a “watershed event that has raised the national debate on gun control.” It’s another sign that the massacre may be prompting the sort of cultural shift that other mass shootings have failed to, er, trigger — and that may be necessary if any meaningful response is to take place.
* A genuine cultural shift in the wake of Newtown shooting? More evidence of it:
Dick’s Sporting Goods, one of the largest sporting goods retailers in the world, says it has removed all guns from its store nearest to Newtown, Connecticut, and is suspending the sale of certain kinds of semi-automatic rifles from its chains nationwide.
* Republican Senator softens (a bit) on guns: This just in from Senator Marco Rubio:
Sen. Rubio, like millions of Americans, is looking for public policy changes that would prevent such a horrible event from happening again. He remains a strong supporter of the Second Amendment right to safely and responsibly bear arms. But he has also always been open to measures that would keep guns out of the hands of criminals and the mentally ill…he supports a serious and comprehensive study of our laws to find new and better ways to prevent any more mass shootings.
This stops short of support for addressing the broader problem of daily gun violence, as opposed to just mass shootings. But the willingness to explore new measures is a break from the “gun rights” brigade’s insistence on just “enforcing existing law.” Obviously what will really matter is what specific measures he can support.
* And Bloomberg keeps pressing for gun law reform: New York mayor Michael Bloomberg is sending videos of family members of shooting victims pleading for action to every single member of Congress. As one puts it: “I can’t believe that Americans are going to stand by and watch babies being slaughtered and say nothing and do nothing.”
The point that shouldn’t get lost here is that if the Newtown massacre of 20 children isn’t enough to prompt action, then it’s hard to imagine a level of horror that would ever be enough.