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Topsail Island. Photo by joanneleon. December, 2012

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OMG I'm shocked.  An Eleven dimension absolute eleventh hour deal? Skip town afterward?  Shocked!
Furious overnight negotiations!  They just might manage to screw us over before midnight after all.  And the bill will be written by the Senate.  Surprise!  Hopefully more people will now realize that the provision in the Constitution saying the House must initiate any revenue related bills is kaput and has been kaput for a long time.   Most or all major bills are written in the Senate.  Then they use a technique called substitution. They take a bill that has been passed previously in the Senate oops, big mistake -- House, previously passed in the House.  It can be any bill. It can be titled "Let's Screw the American People Act of 2012" or whatever.  They remove every single word from the passed House bill and inject the Senate bill into it and pass it.  Then they send it back to the House.  This is how most or all major bills are passed in the U S of A nowadays. It makes it much easier for the unitary executive and the 1% to get what they want too.  It's how Obamacare was passed and many others.  Somebody should change that Schoolhouse Rock music video.

Fiscal cliff: Biden, McConnell make major progress

Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden engaged in furious overnight negotiations to avert the fiscal cliff and made major progress toward a year-end tax deal, giving sudden hope to high-stakes talks that had been on the brink of collapse, according to sources familiar with the discussion.

[...]

Sources close to the talks said a deal is now more likely to come together but cautioned that obstacles remain, including how Speaker John Boehner and House Republican leaders react to any tentative agreement.

[...]

If there’s an agreement, it will come out of the Senate. Speaker John Boehner has said the House will take up whatever bill the Senate passes and either pass it, or amend it and send it back to the upper chamber.

If the Democrats let the Bush tax cuts expire, they have a much stronger hand and nobody dies falling off any ridiculous manufactured cliff.  The markets aren't even open on New Year's day but Congress can be open on New Year's day.  But that would mean a worse deal for the 1% and the 1% wants a deal cut today. Does the 1% always get what they want?  So now the deal is that if you make a half million a year or less (vast majority of the country) you get to keep your tax cuts and the ultra wealthy keep their estate tax cuts.  I would guess this is virtually a permanent situation now.  The Democrats should let the tax cuts expire and work from there.  Then any cuts proposed would be better than nothing.  But instead, some of the tax cuts for the wealthy are being called middle class tax cuts.  
The Two Sides Are Now Absurdly Close On A Fiscal Cliff Deal -- Here's The Latest Offer

* The Democrats agreed to raise the income threshold for tax increases to $450,000 a year (couples) from the prior $250,000. The Republicans are insisting on $550,000 threshold. This is a massive tax cut for almost the entire country relative to the rates that will otherwise take effect on January 1. (So agree on $500,000 already and call it a day.)

* However, to the Republicans' chagrin, the Democrats insist on raise capital gains and dividend taxes to 20% on households over $250,000 and reducing some of the allowable deductions. Importantly, this, too, is a massive tax cut relative to the scheduled changes, which would boost dividend taxes to 40% on incomes over $250,000.

* The Democrats conceded on the estate tax: They'll keep the threshold for taxable estates at $5 million, with a 35% rate over that level. This, again, is a massive tax cut over current law, in which the threshold will drop to $1 million with a much higher rate.

* The Democrats' offer would permanently protect middle-class households from the Alternative Minimum Tax. No details on how this would work.

* On the spending side, the Democrats' offer would delay the "sequester" (automatic spending cuts) until 2015. This would cost an estimated $200 billion. But it would avoid the cuts to the military budget that the Republicans are so desperate to avoid.

* The Democrats would also extend unemployment benefits for a year, extend farm subsidies for a year, and avoid a 27% cut in Medicare payments to doctors. The Republicans say they want offsets to these spending cuts.

[More...]





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