WASHINGTON -- The preliminary fiscal cliff deal being negotiated by Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden would achieve up to $790 billion in revenue over the next decade. Some of that money would be offset by extensions of tax credits and other stimulative policy, leaving roughly $715 billion in debt reduction over that same time period. Because the revenue is counted over a decade, much depends on a variety of inexact assumptions, which is why the White House calculation of the total revenue raised by the deal is only $600 billion.
The details for the deal, which are still being tinkered with, were passed along to The Huffington Post by a source with direct knowledge of the talks. While progressive lawmakers and pundits have bemoaned some of the provisions, some top Hill aides seemed increasingly bullish on the prospect of closing a deal before the day was through.
Under the framework, the Bush-era tax cuts would be extended permanently for individuals at $400,000 and joint filers at $450,000. A second Senate Democratic source familiar with the state of play confirmed those details. The top rate on ordinary income would go back to 39.6 percent and raise an estimated $370 billion in revenue over 10 years.
The same thresholds would be applied for capital gains and dividends, with the top rates in that case going up to 20 percent -- a concession to Republicans (the rate on dividends was set to return to 39.6 percent) but not far from the president's position during the campaign.
Left unaddressed, at the moment, are the $1.2 trillion in sequestration-related cuts that will be triggered on Jan. 1. The parties are arguing over how long to stave off the cuts, and whether and how to offset them.
House Republicans will make no decision on next steps until the Senate finally acts, at which point the leadership will convene the entire conference and make a party-wide decision, said a person familiar with the planning. The aim is to avoid a repeat of the Harry Reid-dubbed "mother of all debacles" that was Plan B, which was concocted by the Republican leadership and delivered to the conference, which publicly rejected it.
The estate tax, which had been a sticking point, will be raised slightly. Currently, it stands at 35 percent on a $5 million threshold. That would be raised to 40 percent, again on a $5 million threshold, which would raise an estimated $25 billion in revenue over 10 years.
Tax benefits would also decrease for high-income earners, with respect to their personal exemptions and itemized deductions. Under the deal being negotiated, the personal exemption phase-out would be capped at $375,000 for individual filers and $425,000 for joint filers. The limitation on itemized deductions would be set at $250,000 and $300,000 respectively. What this means, in basic terms, is that above those income levels, the value of exemptions and deductions goes down and the tax bill paid by those taking the exemptions and deductions goes up. These provisions would raise an estimated $185 billion over 10 years.
The deal being negotiated would, in addition, include a permanent patch to the alternative minimum tax, which was designed to ensure that the wealthy paid a share of taxes, but could engulf millions of middle-class earners if left untouched.
The deal would include a five-year extension of stimulative tax policies, such as the Earned Income Tax Credit, the Child Tax Credit and the college credit expansions. Democrats are counting $135 billion in savings here because they are not extending these policies over a ten year window (the savings come from letting the policies lapse in years five through 10). It's an accounting gimmick that the White House hasn't made itself, in part out of a belief that the provisions will likely be extended beyond 2017.
The deal would also include a one-year extension of the 50 percent bonus depreciation provision introduced in the American Recovery Act, which enables small businesses to deduct up to $250,000 of the cost of machinery and other equipment.
There are still major areas of disagreement to be negotiated. For example, the deal calls for a one-year resolution to the so-called doc-fix, which adjusts the amount of money doctors receive for taking Medicare patients. But as of Monday morning, there was no agreement on how to pay for it.
Both sides had also agreed that unemployment insurance should be extended for one year, affecting an estimated 2 million recipients. But again, there was a dispute over how to cover the $30 billion cost.
While those issues remain unresolved, questions also loomed over whether there was enough support among lawmakers to see the deal through.
A top Democratic Senate aide, wondering why Democrats are panicked at the prospect of a deal that keeps Bush-era tax rates for income higher than $250,000 when the House couldn't even pass one that keeps them for $1 million in income, noted that whatever happens in the Senate still needs to be dealt with by House Speaker John Boehner (R-Ohio). "What I want to know is: if Boehner couldn't get $1 million through the House and now McConnell is caving at $450,000, then how does Boehner deal with this?"
Earlier on HuffPost:
Nuts Bring Buckets of Same
Just in case anyone forgot that the House Judiciary Committee ACORN hearing was a House Judiciary Committee hearing about ACORN, <a href="http://www.huffingtonpost.com/2009/12/02/acorn-hearing-a-barrel-of_n_376882.html">Representative Steve King (R-Iowa) helpfully brought a bucket of acorns</a> to the House Judiciary Committee. Also that day, colleague Lamar Smith praising the "turnout so early in the day" at 2:30pm, and Louie Gohmert offering up the malaprop: “From one acorn, many nuts can grow.” Like, say, Peter King.
Hello Kitty, Hello Revolving Debt
Credit cards. Were it not for them, we would have to save up money in order to buy things. But do some credit cards take it too far, marketing to the youths? Byron Dorgan thought so when he saw the Hello Kitty Platinum VISA. "Does it seem to you like they’re targeting that 10-year-old, the 14-year-old." Ha! He should see the <a href="http://www.shopinprivate.com/hello-kitty-pink-guilty.html">Hello Kitty vibrator</a>.
"I'll See Your Baby, And Raise You Two Tweens"
Last time out, we made mention of Representative John Shadegg's (R-Ariz.) attempt to wield a baby in order to make a point about how terrible health care reform was. We neglected to mention that Representative Pete Stark (D-Calif.) took it a step further, and attempted to bring two young children to make his own points about health care (5:25 in video), at which point the House was officially barred from trafficking in human props any further.
John Thune's Stackin' Dollars
How much is too much stimulus? When it allows representatives to make junior high math analogies based on topography and astronomy, maybe. Here, Senator John Thune (R-S.D.) makes some stupid pictures of dollar stacks that extend into the sky, to the celestial firmament itself. “If you took 100 dollar bills, Mr. President," Thune said, "and stacked them on top of each other you would have a stack that goes 689 miles high.” He added, "In other words, if you took the 100 dollar bills and not stacked them on top of each other, but wrapped them side-by-side all around the earth… If you could believe this, it’d go around the earth almost 39 times." So, we cannot stimulate the economy, because of science! (1:15 in clip)
Gettin' High On Your Own Supply (Of A Substance That Does Not Get You High)
Representative Steve Buyer (R-Ind.) wasn't having any of that whole "regulating tobacco" stuff. Why? Because it's "not the nicotine that kills, it's the smoke!" So, he argued, why don't we regulate lettuce, to keep people from smoking lettuce? Wouldn't that prevent a "pandemic" of cancers? This would have been a good point, were it not for the non-existence of either a massive industry geared toward curing lettuce and rolling it into cigarettes, or a target market of consumers who were even remotely interested in smoking lettuce. BUT YEAH OTHER THAT ALL THAT STUFF (and the fact that nicotine is addictive) STEVE BUYER IS A GENIUS.
And Now, A Poem From Ted Poe
From Rep. Ted Poe (R-Texas): <i>It came on two pages, It has withstood the ages. / The word "shall,'' is only 10 times mentioned, But enough to get one's attention. / No taxes did this law raise, To this day it continues to create much praise; / Two great religions does it claim, The "Law of the Ten Commandments'' is its name. / A current writing, 1,990 pages long, Has a socialist philosophy that is all wrong; / Difficult for the people to understand, And troubling what big government doth demand. / Over 3,445 "shalls'' it does loudly shout, New massive taxes does it proudly tout; / Written in secret by the bureaucrats, For exclusive use of the taxacrats. / The Congressional bill called "Health Care Reform," Is illusionary, the authors are still ill-informed; / Government ought not take over America's health biz. / And that's just the way it is."</i> And so, America, this is why you should have to die of easily treated medical conditions.
And Now, An Even Dumber Poem, From Roland Burris
From the junior senator from Illinois: <i>"It was the night before Christmas, and all through the Senate / The right held up our health care bill, no matter what was in it / The people had voted a mandated reform / But Republicans blew off the gathering storm / We'll clog up the Senate, they cried with a grin / And in the midterm elections, we'll get voted in / They knew regular folks needed help right this second / But fundraisers, lobbyists and politics beckoned / So try as they might, Democrats could not win / Because the majority was simply too thin / Then across every state there rose such a clatter / The whole senate rushed out to see what was the matter / All sprang up from their desk and ran from the floor / Straight through the cloakroom and right out the door."</i> <a href="http://www.huffingtonpost.com/2009/12/22/burris-backs-reform-with_n_400456.html">There's more</a>, but you will probably want to shoot yourself in the face after you read it.
Chuck Grassley Goes All Aggro On The Speaker Box
For some reason, in the course of discussing fuel efficiency standards, Senator Chuck Grassley decided he should drive his point home by shouting out Ashton Kutcher and his movie, "Dude, Where's My Car." Prior to this, Grassley went on an <a href="http://rawstory.com/news/2008/Speech_by_GOP_Senator_references_stoner_0924.html">extended monologue</a> about Pink Floyd's <i>Dark Side of the Moon</i> album and the shards of a broken prism and the "multishades" of light. Just straight up tripping balls, in the well of the Senate. Anyway, as you now know, this TOTALLY fixed fuel efficiency standards!
Sam Brownback Will Save Your Inanimate Genetic Material
Who's looking out for your precious bodily fluids? Kansas Senator Sam Brownback, that's who. And he's enlisted the help of a young girl, named Hannah, who has the power of talking to human embryos! "<a href="http://thinkprogress.org/2006/07/18/brownback-embryo/">Are you going to kill me?</a>" the embryos asked Hannah, who immediately scrawled a picture of this conversation on a giant piece of posterboard, so that Sam Brownback could stop people from killing the stem cells. And then Sam Brownback went on to support a bunch of wars in the Middle East!
The Most Important Prop Of All
James Inhofe (R-Batshit) hates him some gay marriage, and the gays in general. And to make his point, he carries around with him The Most Important Prop in America: a picture of his family. "As you see here, and I think this is maybe the most important prop we’ll have during the entire debate, my wife and I have been married 47 years. We have 20 kids and grandkids. I’m really proud to say that in the recorded history of our family, we’ve never had a divorce or any kind of homosexual relationship." Ha! THAT HE KNOWS OF!