I got into this a bit in today’s column, but I think it’s worth digging deeper into the size of the revenue concession the White House offered the GOP last weekend, as it’s easy to miss if you’re not paying attention.
What you need to know is that both the fiscal commission and the White House’s April speech included two tax increases: the one they proposed, and the one they assumed. Over 10 years, the fiscal commission wanted to raise about $1.2 trillion and the White House sought about $750 billion. But both of them assumed that the Bush tax cuts for income over $250,000 would expire in 2012, netting them another $800 billion or so in revenue. So the total revenue in the Simpson-Bowles proposal was closer to $2 trillion, and Obama’s proposal was more like $1.5 trillion. Both of these were less than simply letting the Bush tax cuts expire — which would get you $3.8 trillion, and $4.6 trillion if you include the consequent reduction in interest payments — but they were significant.
What Obama offered Boehner was an opportunity to take the Bush tax cuts off the table. So though $800 billion in revenue sounds sizable, it’s only half as much in total revenue as the White House’s April proposal, two-fifths as much as Simpson-Bowles wanted, and one-fifth what we’d get if the Bush tax cuts expire next year.