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This afternoon, President Obama is meeting with congressional leaders in a last-ditch attempt to avoid going over the so-called fiscal cliff. Most people in Washington think the effort is futile. That’s probably good thing, as going over the cliff is better than enacting the deal the White House is reportedly putting on the table at the summit.
While the details are sketchy and reports conflicting, according to the New York Times, the proposal would extend the Bush tax cuts up to $400,000 (instead of the $250,000 most Democrats want), and it would extend some important tax credits, but it would leave the estate tax as is, do nothing about the sequester (the automatic spending cuts that will go into effect January 1) and do nothing about the debt ceiling.
If you’re a progressive, those items are, respectively, mediocre, somewhat positive, bad, mixed and terrible. While the $400,000 threshold is tolerable in a larger deal, it’s no good in a bad deal. Changing the estate tax is a must, as current rates exclusively help the heirs of wealthy people to the tune of hundreds of millions of dollars in lost revenue. Some of the tax credits are vital, such as the Earned Income Tax Credit, but these should be passed automatically, not as something Democrats need to bargain for. The sequester is mixed because half the cuts come from the military, which are valuable and generally politically unachievable, but the other half come from the rest of the government, including programs like Medicaid and food stamps.
Other reports paint a more positive picture of the deal Obama will offer, but they seem less realistic, as the contours outlined by the Times fit with the deal Obama previously offered, which liberals rejected out of hand.
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