Well this looks to me like a win for the White House and the economy:
Taxes would rise in some sense on the top 2 percent of earners, as Mr. Obama had wanted. That is because the deal would reinstate provisions to tax law, ended by the Bush tax cuts of 2001, that phase out personal exemptions and deductions for the affluent. Those phaseouts, under the agreement, would begin at $250,000 for single people and $300,000 for couples.
The estate tax would also rise, but considerably less than Democrats had wanted. The value of estates over $5 million would be taxed at 40 percent, up from the current 35 percent. Democrats had wanted a 45 percent rate on inheritances larger than $3.5 million. Under the deal, the new rates on income, investment and inheritances would be permanent.
Mr. Obama and the Democrats would be granted a five-year extension of tax cuts they won in the 2009 stimulus law for middle-class and working-poor taxpayers. Those include a child credit that goes out as a check to workers who do not earn enough money to pay income taxes, an expanded earned income credit and a refundable credit for tuition. Democrats also secured a full year’s extension of unemployment insurance without strings attached, a $30 billion cost.
The sticking point now is how to stop the spending side of the equation from taking effect immediately. The Dems want a one-year sequester pause; the GOP apparently doesn't. I'm with the GOP on this. The only way to get the kind of momentum we need to cut entitlements and defense is the pressure of the sequester. I do not believe it should be suspended now – when a grand bargain has not yet been reached. It should, instead, be reformed as soon as possible to make it a much less crude instrument – and as part of a larger reformist deal. If the tax hikes are neutralized and unemployment insurance extended, as appears to be the case, the immediate threat to the economy is lifted. I see no reason to surrender on spending cuts over the next decade now. It would mean that the US still cannot get a grip on future spending. And I want to see the Pentagon finally face the music.
As for Obama's just concluded speech, it was remarkably jovial and a little tart when it came to dissing Congressional inaction. It contained one key threat, it seemed to me. Obama is not going to simply enforce the sequester or serious spending cuts without further give from the GOP on revenues and tax reform. At least, that's what I inferred from his statement. This is the middle of a titanic struggle, not the end.
(Photo: Senate Minority Leader Mitch McConnell (R-KY) walks to his office on Capitol Hill December 31, 2012 in Washington, DC. The House and Senate are both still in session on New Year's Eve to try to deal with the looming 'fiscal cliff.' By Drew Angerer/Getty Images.)
The Dish 