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Jan 01 2013

The mother of all fiscal cliff deals … breaking, final vote to be held soon

9:00 PM it passes! Fiscal cliff averted, fiscal cliff averted!

 

8: 20 PM Central Update: If people hogged the mic like this in a workplace meeting you’d want them fired, immediately. They think about 10 PM 11 PM central still to final vote. Unrelated note, pretty sure Dreier (R-Douche) copped to climate change data, awfully convenient since he is leaving the House.

7:40 House back in session, bill called up for one hour of debate then there will be a vote. This mess could soon be over folks. It’s funny, even moving at breakneck emergency ramming speed the House talking heads can barely keep my attention during this debate.

Breaking Update 7:30 PM Central: Vote could begin early! It’s intresting enough that I’m glued to CSPAN now. It was mostly House repubs whining about the debt they created with tax cuts, two wars, and an utter and complete demonstration of the catastrophic result of deregulation on the financial products industry. But this is a death rattle, The bell just rang to bring them back and I think this will pass. EtV, estimated time of vote? Supposedly 9:00 – 9:30 PM but it could start any minute now. It takes 218 voites to pass, there are currently 242 republicans and 193 democrats in the House of Representatives.

 

Breaking Update 7:00 PM Central: CNN is just now reporting the House will soon take up a vote on the clean unamended Senate bill. Vote expected in about an hour to an hour and a half. CNN White House correspondant reporting President’s office says they believe the votes are there to pass it with room to spare. Rumor now has it the House will finish amending the bill and vote on it; then, if it doesn’t pass, they will vote on the original Senate bill later tonight or tomorrow. There has been no confirmation that this is the case and no info on dem vs rep whip counts in the event either bill gets a vote.

Update 2:30 PM: Rumors abound that House republicans are whining and trying to amend bill before voting on it. If it passes amended it has to go back to Senate. With about 36 hours left in this Congress and the Senate already out of town, that seems to be cutting it too thin. Let em hold it up! If we have to wait for a new Congress we have more dems and less repubs anyway, and some of the worst teaparty loons are among those departing. Luke Russert on MSNBC says if this bill went to vote right now as is, unamended, it would probably pass based on his sources.

Update 2:00 PM Central: The House democrats are holding a news conference, the tone is very positive, they have spent most of it so far stating the “people deserve an up or down vote”  and talking about the art of compromise, suggesting widespread democratic support of the Fiscal Cliff Compromise, whatever it’s called, dunno that yet. Which would mean all we need now is for Boehner to allow a floor vote and a little over two dozen Republicans to vote aye to reach the magic majority of 218 votes.

Here’s where those of you who doubted my credentials as a centrist or non liberal or former moderate conservative come into play: I think it’s a great deal, I fully expected a complete sell out by enough dems to keep tax breaks for the wealthy and another of many trimmings of Social Security or Medicare. I think we cleaned their clocks on this, assuming it passes as its being presented. Fiscal Cliff Deal bullet points courtesy of Daily Kos below the fold.

  • The tax on capital gains and dividends will be permanently set at 20 percent for those with income above the $450,000/$400,000 threshold. It will remain at 15 percent for everyone else. (Clinton-era rates were 20 percent for capital gains and taxed dividends as ordinary income, with a top rate of 39.6 percent.)
  • The estate tax will be set at 40 percent for those at the $450,000/$400,000 threshold, with a $5 million exemption. That threshold will be indexed to inflation, as a concession to Republicans and some Democrats in rural areas like Sen. Max Baucus (D-Mt.).
  • The sequester will be delayed for two months. Half of the delay will be offset by discretionary cuts, split between defense and non-defense. The other half will be offset by revenue raised by the voluntary transfer of traditional IRAs to Roth IRAs, which would tax retirement savings when they’re moved over. [...]
  • The Alternative Minimum Tax will be permanently patched to avoid raising taxes on the middle-class. [...]
  • Two limits on tax exemptions and deductions for higher-income Americans will be reimposed: Personal Exemption Phaseout (PEP) will be set at $250,000 and the itemized deduction limitation (Pease) kicks in at $300,000.
  • The full package of temporary business tax breaks—benefiting everything from R&D and wind energy to race-car track owners—will be extended for another year.
  • Scheduled cuts to doctors under Medicare would be avoided for a year through spending cuts that haven’t been specified.

I’ve seen some teeth gnashing among progressives so far, mostly on three key points. I argue two of those points are neutralized by various factors leaving only the third as a point of contention we may have to live with, for at least a while.

Social Security and Medicare
As hoped for benefits and eligibility age are untouched. However, the payroll tax holiday we’ve all been enjoying for two years is going away. The paycheck deduction are usually 6.2% per employee and another 6.2% for each employee paid by the employer. Both were cut to 4.2% for the last two years. They will resume to 6.2% in 2013 and beyond under this framework. This will affect me a millions like me who are on a tight budget. But … these are my benefits, paying full boat increases my sense of ownership in these benefits, and I’m going to need these benefits. I’m willing to pay for my benefits, even if it hurts a little, and in the event things turn up before I retire I don;t mind having chipped in a little for other people’s benefits too.

Top Tax Bracket
President Obama campaigned on raising the tax rate on adjusted gross income over 250k from the Bush rate of 35% to the Clinton rate of 39.6%. The actual deal being debated in the House right now raises that cut off to 400k for an individual and 450k for married couples. That has a lot of progressives grumbling. But if you calculate cost of living adjustments from 1997 when the Clinton rates were in effect through 2012, the future value is almost exactly 400k. Raising the brackets means, for most families, you’d need to make half a million or more before the change would have any impact at all. That helps secure indepdendant voters for our side making up to half a mill and removes any excuse that there might be some circumstances where 250k/year is still just middle class. Half a million a year takes you out of the middle class in any city in the US no matter how expensive.

Dividends and Capital Gains
Under the Bush tax cuts capital gains and dividends were taxed at a flat 15%, under this proposal the top rate will be raised to a mere 20% on income over 450k. That is a bit of a sell out to the super rich, but it will also mean the super rich pay hundreds of thousands to millions more in taxes. Nevertheless, we need to address this. There’s no reason why someone making 10 million a year captured by stock options or dividends should pay half what someone making a million dollars in wages pays. That’s about the only real downside I see in this bill.

The bill is now being debated in the House and most newscaster I’ve been watcing assume Boehner will allow it to be brought to the floor for a vote (There is some talk the GOP might try and stuff a revoilting ammendement in there, like demanding all children be arme din school or some shit, but the consensus is that’s not like). There are 435 members, currently 242 Republicans and 193 Democrats. Each bill must pass by a simple majority of 218 votes. If we assume 190 democrats vote for it, we need 28 Republicans to come over. It seems reasonable Beohner will get 28 members of his caucus to vote aye, so the smart money is it will pass. But if it doesn’t, the composition is about to change. In a few days there will be a new congress, with 201 democrats and 234 Republicans providing even better odds, for us.

3 comments

  1. 1
    yhcmichael

    With the Bush tax cuts the lower brackets being upheld, that is actually a tax cut for the rich that will not be equalized by returning the top bracket to the Clinton era.

  2. 2
    Physicalist

    So, Beohner can let it come up for a vote, it probably passes, and he probably loses his speakership?

    And if he doesn’t let it come up for a vote, does he stay on as speaker?

  3. 3
    Stephen "DarkSyde" Andrew

    They’re paralyzed. The GOP is hemmed in, in between factions and ideology and leadership, they have usually consistent trusted sources telling them conflicting info. They literally do no know as a body what to do or what they want. I’ve never seen anything uite like it.

    It’s hard to gauge a collection of panicked politicians on anything, let alone predict what they’ll do for a leader after a hypothetical vote. But the default action is to do nothing, I suspect they’re drawn to that. Why Beohner wants to remain speaker.of this mess is beyond me.

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