The GOP has dropped its demand that moving to chained CPI for calculation of Social Security benefits be part of the fiscal cliff deal.
They play to return to it as part of the debt ceiling negotiations instead. Those are going to be fun!
Both parties in the Senate have apparently agreed to extend the Bush tax cuts for families making up to $400,000 or $500,000.
Right now they’re fighting over the Dem position that the spending cuts called for in the sequestration be delayed for two years. The GOP is balking at this and doesn’t want to use increased tax revenue for more spending.
Negotiations continue, and the Senate is going to reconvene tomorrow.
As we watch Europe fall off a cliff, let’s not forget that we ourselves will take a plunge on January 1 unless Congress pulls us back.
The CBO has gamed out three scenarios. If the Bush tax cuts expire and the automatic cuts in domestic and defense spending take effect, GDP will fall 1.3% between the fourth quarter of 2012 and the second quarter of 2013. So we’re talking another recession.
If the Bush tax cuts are extended, the payroll tax cut expires, and the automatic spending cuts don’t happen, GDP will grow by 1.7% in the same time frame. No new recession, but not great growth either.
If we keep on the same path, with all tax cuts extended (Bush and payroll) and no automatic spending cuts, GDP will grow by 5.3%.
I’m with Option 3. Let’s get some solid growth, and then we can deal with the deficits and national debt.
David Brooks has a column in the NYT today praising Mitt “I’m Also Unemployed” Romney and his advisers. Brooks specifically mentions chief economic adviser R. Glenn Hubbard as part of “the gold standard of adviser teams.”
Really? Hubbard was Bush 43’s Chairman of the Council of Economic Advisers, a man who pushed the Bush tax cuts, not just the pre-9/11 ones, but the 2003 cuts, despite our having to pay for two wars. Hubbard was a huge fan of deregulation and derivatives. In other words, Hubbard is high on the list of those who deserve blame for the economic collapse.
I don’t want him anywhere near the White House again. Mr. Brooks, all that glitters is not gold.