Here’s an update from Ezra Klein this morning:
What set off yesterday’s debt-deal panic among congressional Democrats wasn’t so much information about a new deal as a better understanding of the old deal. What Boehner and Obama appear to be discussing is the $4 trillion deal they were discussing a few weeks ago. In that deal, $1.5 trillion in immediate cuts would be followed by processes for making a further $1.5 trillion in deeper cuts — many of them to entitlement programs — and reforming the tax code to raise a trillion more dollars than it does now. The plan would also include some sort of enforcement mechanism that would make sure the future spending cuts and tax increases manifested.
Congressional Democrats spent much of yesterday complaining that this plan doesn’t really have revenues while the White House spent much of yesterday swearing that it did. On this, congressional Democrats are mostly right. The revenue in this plan is approximately equal to the revenue from letting the Bush tax cuts on the rich expire — which is something Democrats could do with zero Republican votes in 2012, when the Bush tax cuts are set to expire automatically. In other words, Democrats are demanding, as part of this deal, that Republicans agree to let them do…something they could do even if Republicans refused to agree to it.
The best way to understand the revenue in this plan, in fact, is that it’s a concession to Republicans, not Democrats. It effectively takes the 2012 expiration of the Bush tax cuts and all of the leverage that gives Democrats off the table, but doesn’t ask for more revenue in return. Rather, there’s about 25 percent as much revenue in this plan as there is in simply doing nothing and letting the Bush tax cuts expire, and half as much revenue in this plan as in the Simpson-Bowles/Gang of Six plans recommended, and this plan also gives up Democrats ability to go for more revenue in 2012 when the Bush tax cuts expire. See this graph/post for a clearer comparison.
With more concerns than details, Democrats lashed out, saying that deep cuts to federal agency budgets and entitlements were too steep a price to pay. They questioned whether Obama shared their core values, and they sought reassurance — at a hastily arranged evening meeting at the White House that lasted nearly two hours — that the final legislative package would be the balanced approach that the president had promised.
“There has to be a balance. There has to be some revenue and cuts. My caucus agrees with that. I hope that the president sticks with that,” said Harry Reid. “It would concern me greatly if these folks—the tea party group—have been able to convince the president to go along with a deal that basically gives them everything they want but yet still takes away from those who are our most vulnerable,” said Maryland Rep. Elijah E. Cummings.
Also: Once again, The Onion reports on the continuing debate in a conclusion a little too close to home.