Ezra Klein heard that lawmakers and the White House will have a deal to avoid the fiscal cliff by December 21. Here’s how it’s shaping up:
December 21st, people keep saying. We’ll have a deal by December 21st… Here’s how it could work: The top-income tax cuts expire, as Obama wants. Those cuts only raise about $80 billion in 2013, so they’re a ‘down payment’ on reform. And their cost is that the Democrats identify roughly $80 billion in spending cuts that can be passed into law now — so Republicans also get a ‘down payment’ on the bigger deal. And all this happens in the context of a framework for a larger deal, which includes the promise of tax reform in 2013.
Not bad, but it depends on what those cuts are. Based on what the White House has done in the past, it could be programs that don’t work anymore — possibly some from Defense and others from social spending.