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White House pre-spins fiscal cliff defeat

December 31, 2012 | 3:06 pm
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Minority Leader Mitch McConnell has reportedly struck a deal with Vice President Joe Biden on at least the tax side of the fiscal cliff and liberals are not happy. Phil Klein has outlined the details of the agreement here, and The Washington Post’s Ezra Klein estimates the tax hikes will net the federal government about $660 billion in revenue. Klein goes on to report:

A top Senate staffer on the Democrats’ side e-mailed me with a similar sentiment. He’d heard the McConnell-Biden deal was in the range of $660 billion. That’s “$940b below the President’s initial position, $340b below Boehner’s last offer, and $140b below the $800b the President told Boehner he gets for free,” he griped.

So how does Obama plan to sell a fiscal cliff tax hike that raises less revenue than Boehner’s first offer? Klein again:

It would be going too far to say White House officials are thrilled with this package. But it looks pretty good to them. As they see it, it sets up a three-part deficit reduction process. Part one came in 2011, when they agreed to the Budget Control Act, which included more than a trillion dollars in discretionary spending cuts. Part two will be this deal, which is $600 billion — and maybe a bit more — in revenue. And part three is still to come, but any entitlement cuts that Republicans want will have to be matched by revenues generated through tax reform. If Republicans want $700 billion in further spending cuts and the White House insists on $700 billion in tax reform, they’ll end up with more revenue than in Obama’s final offer to House Speaker John Boehner.

This is beyond delusional. The fiscal cliff is Obama’s one chance at more revenue until at least 2015. And if Republican maintain the House in 2014 it is his last. There simply is no way House Republicans will ever agree to another tax hike, especially in the context of the debt limit which they view as their chance to get more spending cuts.

No wonder Jonathan Chait, Paul Krugman, and Noam Scheiber all hate the deal.

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