Unified Security Budget Task Force Recommends Spending Reforms to Strengthen National Security, Reduce the Deficit
Thursday, 01 November 2012 14:26
Press Release
Analysis
Narrows Funding Gap Between Offense and Prevention to Strengthen Security, Reduce Deficit, Create Jobs
Washington, D.C. --(ENEWSPF)--November 1, 2012. As sequestration is
being intensely debated in Congress, the Unified Security Task Force
yesterday released “Rebalancing Our National Security: The Benefits of Implementing a Unified Security Budget,”
recommending military spending shifts to shed wasteful programs and to
balance offense and prevention with the aim of strengthening security
and reaching the achievable target of $1 trillion in cuts over 10 years.
Within the decade, this plan would achieve a 20 percent increase in the
international affairs budget—concentrated in the core missions of
diplomacy and development—and focus on investments in climate
stabilization, while allowing for $200 billion for deficit reduction and
$240 billion for domestic nation-building.123
“As we wind down two wars, we can responsibly begin to reduce a
military budget that has grown larger during the post-9/11 period than
at any time since World War II,” said Miriam Pemberton,
co-author of the report and research fellow at the Institute for Policy
Studies. “At the same time, we can shift resources to strengthen our
engagement with the rest of the world. This report lays out a blueprint
for doing so.”
“The report critiques the funding imbalance between the military
(Defense Department) and nonmilitary (State Department and Department of
Homeland Security) components of the American security apparatus. And
it injects some sanity and real numbers into the political debate over
how to best protect U.S. national security,” said Lawrence J. Korb,
report co-author, Senior Fellow at the Center for American Progress,
and former assistant secretary of defense under President Ronald Reagan.
“We need to protect the underfunded nonmilitary programs that help our
nation defend itself and prevent global crises from escalating into
military confrontations, which are often costly in both American lives
and dollars. The military can become leaner and stronger, but
politicians need to consider the broad array of security tools at their
disposal.
This report further recommends that the largest addition to the
prevention budget be in the area of climate security and requests that
the federal budget process include a climate change mission area.
Federal expenditures on climate should be accounted for, as was a duty
of the Office of Management and Budget before the requirement was
recently suspended by Congress, and presented in a unified way in the
federal budget. Because of the U.S. military’s real and growing concern
over climate change as a threat multiplier—a phenomenon with the ability
to exacerbate and accelerate instability and conflict—this unified
security budget proposes to add $20 billion a year in investments to
stabilize the climate through domestic and global efforts.
A full listing of members of the Unified Security Task Force—with
expertise in defense spending through the Department of Homeland
Security, offense spending through the Department of Defense, and
prevention spending through nonmilitary foreign engagement programs in
the Department of State and the U.S. Agency for International
Development—can be found in the report here.
###
The Unified Security Budget Task Force has reported annually since
2004 on the imbalance in security spending, which is tilted to heavily
toward military expenditures. Institute for Policy Studies is a
community of public scholars and organizers linking peace, justice, and
the environment in the United States and globally. We work with social
movements to promote true democracy and challenge concentrated wealth,
corporate influence, and military power.
Source: http://www.americanprogress.org
The
time is right to scrimp on military pay raises, says a new report that
appears to agree with a Pentagon proposal to cap basic pay hikes
starting in 2015.
The report, commissioned by the Defense
Department, was conducted by the Rand Corp., a think tank that has done
considerable research for the military on ways to hold down personnel
costs.
The report offers three reasons to justify military raises that are smaller than annual private-sector wage growth:
• A tight civilian job market has improved military recruiting and also has made midcareer troops less likely to leave.
•
The end of combat operations in Iraq and the winding down of the
mission in Afghanistan will dampen the political fallout of smaller
raises.
• Service members are well-compensated after a decade of
robust increases in pay and benefits. Since 2000, basic pay has risen by
45 percent, compared with increases of 33 percent in private-sector
wages and 31 percent in the cost of consumer goods and services.
When
tax-free housing and food allowances are factored in, the report says,
enlisted members are better paid than 80 percent or more of civilians,
compared with less than 60 percent in 2000.
BREAKING DOWN THE NUMBERS
• What you stand to lose
The charts below show how basic pay would change for some troops —
and how much cumulative pay they would lose — under three Rand Corp.
pay-cap proposals if they took effect next year. The proposals are
compared to pay raises that would continue to match the Economic Cost
Index, a measure of private-sector pay growth. The calculations are
based on the Pentagon’s proposed 1.7 percent military pay raise for
2013, which would match the actual increase in the ECI, and the
Congressional Budget Office’s nominal estimates of 3.3 percent annual
ECI growth from 2014 through 2016. E-4 with 3 years of service
Assumes promotion to E-5 in 2013 and to E-6 in 2015, plus time-in-service raises in 2013 and 2015
2012
2013
2014
2015
2016
ECI
25,887.60
30,358.80
31,359.60
37,591.20
38,833.20
Option 1
25,887.60
30,211.20
31,208.40
37,404.00
38,638.80
Option 2
25,887.60
30,211.20
31,057.20
37,044.00
38,080.80
Option 3
25,887.60
29,851.20
30,837.60
36,961.20
38,181.60
E-6 with 8 years of service
Assumes time-in-service raises in 2014 and 2016
2012
2013
2014
2015
2016
ECI
37,717.20
38,358.00
40,888.80
42,238.80
46,234.80
Option 1
37,717.20
38,170.80
40,687.20
42,030.00
46,008.00
Option 2
37,717.20
38,170.80
40,489.20
41,623.20
45,345.60
Option 3
37,717.20
37,717.20
40,204.80
41,533.20
45,460.80
E-8 with 18 years of service
Assumes time-in-service raises in 2014 and 2016
2012
2013
2014
2015
2016
ECI
55,699.20
56,646.00
60,091.20
62,074.80
66,996.00
Option 1
55,699.20
56,368.80
59,799.60
61,772.40
66,664.80
Option 2
55,699.20
56,368.80
59,508.00
61,174.80
65,703.60
Option 3
55,699.20
55,699.20
59,086.80
61,038.00
65,876.40
O-2 with 2 years of service
Assumes promotion to O-3 in 2015, plus time-in-service raises in 2013, 2014 and 2016
2012
2013
2014
2015
2016
ECI
44,535.60
52,164.00
55,702.80
65,516.40
70,920.00
Option 1
44,535.60
51,908.40
55,432.80
65,196.00
70,570.80
Option 2
44,535.60
51,908.40
55,162.80
64,566.00
69,552.00
Option 3
44,535.60
51,292.80
54,774.00
64,422.00
69,735.60
O-4 with 10 years of service
Assumes time-in-service raises in 2014 and 2016
2012
2013
2014
ECI
77,022.00
78,332.40
84,949.20
87,753.60
93,636.00
Option 1
77,022.00
77,947.20
84,531.60
87,321.60
93,175.20
Option 2
77,022.00
77,947.20
84,124.80
86,479.20
91,828.80
Option 3
77,022.00
77,022.00
83,527.20
86,284.80
92,073.60
O-6 with 20 years of service
Assumes time-in-service raises in 2014 and 2016
2012
2013
2014
ECI
112,446
114,357.60
121,240,.80
125,240.40
132,732
Option 1
112,446
113,796
120,646.80
124,628.40
132,080.40
Option 2
112,446
113,796
120,060
123,422.40
130,172.40
Option 3
112,446
112,446
119,214
123,148.80
130,510.80
Sources: Rand Corp., Congressional Budget Office, Military Times calculations
“Military
pay buys a lot more than it used to,” the report says. “Overall,
conditions are currently favorable for DoD to … slow the growth in
military pay, enabling savings in military personnel costs while
achieving force management goals.”
This is hardly the first report
to attack military pay and benefits — but this one supports an active
Defense Department initiative.
The five-year defense budget plan
unveiled by the Pentagon in January proposes 2013 and 2014 raises that
would continue to match average annual increases in private-sector wage
growth. The request for 2013 is 1.7 percent; the size of the 2014 raise
will depend on private-sector wage growth next year.
The
nonpartisan Congressional Budget Office estimates that growth will be
3.3 percent, but the actual amount won’t be known until fall.
However,
defense officials have said that beginning in 2015, they would begin
proposing smaller pay raises that presumably would be less than the
average annual increase in private-sector wages.
Defense officials have never laid out in public testimony the details of their proposed raises for 2015 and beyond.
Documents
released by the Pentagon in February in conjunction with the fiscal
2013 budget proposal said only that raises beyond fiscal 2014 “will be
lower.”
The documents also said the lower raises are being delayed for two years to give troops time “to accommodate these changes.”
In
February testimony on the defense plan, a senior Pentagon personnel
official, JoAnn Rooney, told the House Armed Services Committee that
“slowing future growth of military compensation” was a key part of DoD’s
effort to cope with postwar force cuts and tighter budgets.
Defense
officials “understand [that] current fiscal pressures demand change and
that the costs of military compensation are significant,” Rooney said.
“Some cost savings will be achieved through proposing more limited pay
raises.”
Pay-cap options
Congress has not yet reacted to
the Pentagon pay study because lawmakers do not need to directly address
something that will not happen for at least two years, according to
congressional aides who work on personnel issues. However, the CBO is
skeptical that lawmakers would approve the capping of military pay.
The Rand report lays out three options for capping military pay raises, and how much money each would save:
• A one-time pay freeze that would save about $1.2 billion the first year and $17.7 billion over 10 years.
•
A one-time pay cap that would hold the military raise to half a
percentage point less than average private-sector wage growth, which
would save $360 million in the first year and $5.2 billion over 10
years.
• Four years of military raises capped at half a percentage
point less than private-sector raises, which would save $360 million
the first year and $17.5 billion over 10 years.
The report does
not specifically recommend any of the options but notes that a four-year
pay-raise cap could be hard to maintain because recruiting and
retention might worsen, the economy might improve, or new strains on the
force could emerge. Any of these factors could erode support for
maintaining limits on military raises, the report says.
While the
report emphasizes how military raises have well outpaced private-sector
wage growth since 2000, it never points out that military pay was far
behind civilian pay at that point.
From 2000 to 2011, Congress
approved annual military pay raises that outpaced private-sector wage
growth precisely because military pay had badly lagged in the 1990s — a
big factor in a recruiting and retention crisis that took hold after the
post-Cold War drawdown that decade.
In fact, 1998 and 1999 saw
the peak of the so-called “pay gap,” a comparative measure of annual
military and private-sector pay growth since 1982, the last time rough
parity was thought to exist.
With the pay gap at 13.5 percent and
troops voting with their feet, Congress embarked on its 11-year campaign
to make military pay competitive again.
A lesson not learned?
The
considerable effort required to make that happen over more than a
decade will be for naught if military pay is again allowed to lag behind
civilian wages, advocates say.
“It seems like this is a lesson we
never learn,” said retired Col. Steve Strobridge, government relations
director for the Military Officers Association of America and a former
compensation director for the Air Force.
“What will happen, most
likely, is what has happened in the past,” he said. “We will cap people
and short their pay … and keep doing it until the pain starts to show
with reduced recruiting and reduced retention, and then you reverse
course.
“We turn the tap on, we turn the tap off, and in the
process leave a military compensation system that lacks basic
principles, like paying people a fair wage,” he said. “What message are
you trying to send when you say to people in the military that they
don’t deserve the same pay as the average American?”
“Capping
basic pay is about the worst thing the military could do,” said Todd
Harrison, a defense analyst with the nonpartisan Center for Strategic
and Budgetary Assessments.
“Basic pay is one of the most
cost-effective forms of military compensation. DoD should reduce other,
less valued forms of compensation before [it considers] touching basic
pay,” said Harrison, who in July released a study based on surveys of
current and former service members about what trade-offs they would make
in their pay and benefits.
A long-term struggle
Since the
dawn of the all-volunteer force after the Vietnam War, the Pentagon has
struggled with how to set military pay rates. Defense officials want to
spend enough to be competitive with the private sector and fair to the
troops while being prudent stewards of taxpayer dollars.
The
general view has been that military pay should be “comparable” to what
service members would earn if they were not in uniform, according to the
Military Compensation Background Papers, a DoD history of pay and
benefits.
In the early 1970s, military pay was kept roughly equal
to the pay of federal civilian workers with similar years of service,
but that didn’t work well because federal pay was not keeping pace with
private-sector salaries.
By 1981, military wages were considered
to be far behind what service members could earn in the private sector,
leading to two huge catch-up raises: 11.7 percent in fiscal 1981 in the
last Carter administration budget and 14.3 percent in fiscal 1982 in the
first Reagan administration budget.
But military pay quickly began to lag behind the private sector again, leading to the peak 13.5 percent pay gap in 1999.
The
next year saw Congress approve a new pay formula that required annual
military raises to be half a percentage point above average
private-sector wage growth as measured by the Labor Department’s
Employment Cost Index, or ECI.
Initially imposed for just five
years — over DoD objections — the “ECI-plus-½” formula was used by
Congress for 11 years, cutting the pay gap to 2.4 percent by 2010, where
it remains.
However, DoD strongly argues that any pay gap disappeared long ago if military housing and food allowances are factored in.
Those
allowances, which with basic pay form what DoD calls “Regular Military
Compensation,” saw major increases over the past decade as a result of
changes in the way they are calculated and paid.
In fact, the 2008
Quadrennial Review of Military Compensation argued that, using the RMC
yardstick, service members were paid better than their civilian
counterparts. The QRMC said cash compensation for enlisted members was,
on average, $5,400 more than for comparable civilians. Officers did even
better, with average cash compensation $6,000 more than civilians with
similar experience and education.
Lawrence Korb of the Center for
American Progress, the Pentagon’s top personnel official from 1981 to
1985, said he agrees with the Rand report’s conclusion that military
raises have been overly generous in recent years, but he said he is not
sure a long-term cap on military raises is the answer.
Korb said he supports keeping military raises at the same level as annual private-sector wage growth.
“We got ourselves in a lot of trouble in the ’70s, when we capped raises,” he said. “We do not need to do that again.”
Think tank recommends big benefits cuts
By Rick Maze - Staff writer
Posted : Thursday Nov 1, 2012 11:36:21 EDT
A
new report by a liberal-leaning think tank recommends a dramatic
overhaul of military pay, retirement and health care benefits as part of
a $1 trillion cut in defense spending over 10 years.
The Center
for American Progress calls for
capping pay raises,
eliminating military
health benefits for many retirees who are covered by an
employer-provided plan, and
reducing the value of military retired pay
as well as making retirees wait until age 60 to start receiving it.
Recommendations
are included in a report, Rebalancing Our National Security (below),released
Oct. 31 by the progressive think tank and advocacy group. The report
opposes across-the-board cuts in defense spending that could occur
beginning in January under sequestration but still calls for major
reductions in defense spending.
Capping pay raises, the report
says, could save $16.5 billion over the next five years.
Reducing
retiree health care benefits, through a combination of restricting care
and raising fees, could save $15 billion a year.
Reforming military
retired pay could save, in the short term, up to $13 billion a year, and
over time could save up to $70 billion a year off the current plan.
In
addition to cutting compensation and benefits, the report also
recommends cutting the number of active-duty troops permanently based in
Europe and Asia, saving $10 billion a year. It recommends withdrawing
33,000 troops from Europe and about 17,000 from Asia.
In calling
for less spending on military pay raises, the report basically endorses a
plan proposed, but not yet executed, by the Defense Department. Under
the Pentagon plan,pay raises beginning in 2015 would be capped at less than the average
increase in private sector pay,a move that responds to a belief that
military members are being paid more than civilians with comparable jobs
and experience.This happened because Congress, over Pentagon
objections, has regularly provided the military with raises that were
slightly larger than the average private-sector raise to eliminate what
had been perceived as a pay gap. The end result, says the report, is
that the average service member is receiving $5,400 more in annual
compensation than a comparable civilian.
The Defense Department
plan calls for a 0.5 percent raise in 2015, a 1 percent raise in 2016
and a 1.5 percent raise in 2017 to bring pay levels back in line, which
the CAP report endorses.
“To its credit, the Department of Defense
has attempted to tackle this problem in its FY 2013 budget request,
outlining a plan that would gradually bring military pay back in line
with the Employment Cost Index without cutting any service member’s
pay,” the report says. “Congress should demonstrate political courage
and allow the Department of Defense to execute this long-term plan.”
Similarly,
the report endorses many of the Defense Department’s proposals for
cutting health care costs by raising fees, mostly on retirees and their
families. But the report goes a step further: “To truly restore the
Tricare program to stable financial footing, the Defense Department
should enact measures to reduce the overutilization of medical services
and limit double coverage of working-age military retirees,” the report
says.
One idea would be to modify Tricare for Life benefits for
Medicare-eligible retirees so that the program would not cover the first
$500 of costs per year and would cover only 50 percent of the next
$5,000.
Another idea would be to mandate that working-age retirees
could only have Tricare benefits if they or their spouses do not have
access to employer-provided health benefits. The report suggests this
would be an income-based restriction but does not say what the cutoff
should be.
The report also recommends modifying military
retirement benefits.
For anyone currently in the military with fewer
than 10 years of service, benefits could be cut:
Instead of receiving 50
percent of basic pay after 20 years of service, with immediate
benefits, the report says the benefits would be 40 percent of base pay
with payments not beginning until age 60.
For people not yet in the
military, there would be no fixed retired pay in the future, only a
pre-tax retirement savings plan based on contributions from the service
member
'Fiscal Cliff' Agreement Passes in the Senate, House Expected to Act Next
Washington, DC Monday, December 31, 2012
The Senate
passed HR 8, the Tax Relief Extension Act, by a vote of 89 to 8. The
so-called "fiscal cliff" agreement had been negotiated earlier in the
day between Senate Minority Leader Mitch McConnell (R-KY) and Vice
President Joe Biden.
The House is in for legislative business at
noon ET and is expected to take action on the Senate agreement some time
during the day.
The Senate returns at 2pm ET this afternoon.
Last
night, House Democratic Leader Nancy Pelosi (D-CA) issued a statement
on the agreement, noting that she would present it to the House
Democratic Caucus once a final agreement was reached and passed in the
Senate.
House Speaker John Boehner (R-OH) and other members of the
Republican leadership team also issued a statement tonight on the
Senate agreement.
“The House will honor its commitment to consider
the Senate agreement if it is passed. Decisions about whether the
House will seek to accept or promptly amend the measure will not be made
until House members -- and the American people -- have been able to
review the legislation.”
Secretary of State Hillary Clinton's blood clot is between her brain and skull behind right ear
CNN just reported that Secretary of State Hillary Clinton's blood
clot is behind her right ear between the skull and the brain. I believe
they called it a right venous transverse sinus thrombosis.
She is reported to be in good spirits, and with her family and should make a full recovery.
She did not have a stroke nor has she suffered any neurological damage, and she is doing "quite well."
A follow-up doctor said this is within the blood system and not
inside the brain itself, however, I'm not certain exactly what this
means. Although, he his not her doctor, he says she should be able to go
home and be treated with anti-coagulants for some number of months.
The expert said these veins travel over the surface of the brain, and
my impression is that the implication is that this is not as serious as
if it were inside the brain.
Oh dear, on behalf of all of us here I extend our best wishes and
hopes for a speedy recovery to Secretary of State Hillary Clinton.
We love you Hillary! Get well soon!
2:16 PM PT: ABC is the first to post a written story on this, in Hillary Clinton has blood clot under skull: doctors Posted 4 minutes ago
Yesterday, we learned Secretary Clinton was hospitalized with a blood
clot after a routine follow-up exam after her concussion several weeks
ago.
US secretary of state Hillary Clinton has a blood clot between her
brain and skull, but she is expected to make a full recovery, her
doctors say.
A subsequent scan revealed "a clot in the vein that is situated in
the space between the brain and the skull behind the right ear. It did
not result in a stroke, or neurological damage," the doctors said in a
statement this morning.
They said Ms Clinton was "making excellent progress and we are confident she will make a full recovery."
"She is in good spirits, engaging with her doctors, her family, and her staff," they added in the statement.
Updated: 09:07, Tuesday January 1, 2013
For a little time zone fun, I left the Australian posting date up so
we can get a glimpse of tomorrow's news which will announce that
.
Mrs Clinton topped the 2012 list compiled by Gallup, with 21 per cent
of those surveyed naming her as the woman they most looked up to this
year. It is the 11th straight time that Clinton has topped the annual
poll, and the 17th altogether - a first for Gallup.
The result 'further solidifies her position as the most often named
Most Admired Woman in Gallup's history - a total of 17 times going back
to her first year as first lady in 1993', the polling company said.
7:53 PM PT:
A special thanks to everyone who recommended this post as you have
helped me put me over 32,000 total recommendation on this last day of
the year.
Hurray the Senate did something the House could not. HAHAHAHA!!!!!!!!
By Chris Frates
Updated: December 31, 2012 | 5:35 p.m.
December 31, 2012 | 3:27 p.m.
AP Photo/Susan Walsh
Senate Minority Leader Mitch
McConnell of Ky. walks toward the Senate floor on Capitol Hill in
Washington, Monday, Dec. 31, 2012.
Echoing President Obama’s statement
that a fiscal-cliff deal is near, Senate Republican Leader Mitch
McConnell took to the Senate floor on Monday afternoon to announce that
he and Vice President Joe Biden have struck a deal to prevent tax hikes
on the middle class.
“I can report that we’ve reached an agreement on all of the tax, the
tax, issues. We are very, very close as the president just said,”
McConnell said.
The Republican leader’s statements ratchet up pressure on Democrats,
who are split over how to handle across-the-board spending cuts, called
sequestration, which start Jan. 2. McConnell is arguing that lawmakers
should vote on tax relief now and leave the spending cuts for later.
McConnell and Biden have agreed to raise income-tax rates on families
making more than $450,000 and make the Bush-era tax cuts permanent for
everyone under that limit. And the estate tax would be exempted on the
first $5 million with assets over that amount being taxed at 40 percent.
“A deal to prevent tax hikes on millions of Americans is finished,” a GOP aide said.
But Democrats disputed that, saying no deal is final until there is agreement on sequestration.
“There is no deal yet,” Sen. Dick Durbin of Illinois, the Senate’s No. 2 Democrat, told National Journal.
A Republican aide said that McConnell and Biden had a sequestration
deal last night that would have allowed votes on two separate bills. But
the White House backtracked when it became clear there was disagreement
among Democrats on how to handle the votes.
On the floor, McConnell said his last conversation of the night with
Biden was at 12:45 a.m. Monday. At 6:30 on Monday morning, the two
kicked off another day filled with phone calls.
"This has been, clearly, a good-faith negotiation," McConnell said.
1. Republicans haven’t conceded anything on the debt ceiling, so over the next two months – as the Treasury runs out of tricks to avoid a default – Republicans are likely to do exactly what they did before, which is to hold their votes on raising the ceiling hostage to major cuts in programs for the poor and in Medicare and Social Security.
2. The deal makes tax cuts for the rich permanent (extending the Bush tax cuts for incomes up to $400,000 if filing singly and $450,000 if jointly) while extending refundable tax credits for the poor (child tax credit, enlarged EITC, and tuition tax credit) for only five years. There’s absolutely no justification for this asymmetry.
3. It doesn’t get nearly enough revenue from the wealthiest 2 percent — only $600 billion over the next decade, which is half of what the President called for, and a small fraction of the White House’s goal of more than $4 trillion in deficit reduction. That means more of the burden of tax hikes and spending cuts in future years will fall on the middle class and the poor.
4. It continues to exempt the first $5 million of inherited wealth from the estate tax (the exemption used to be $1 million). This is a huge gift to the heirs of the wealthy, perpetuating family dynasties of the idle rich.
Yes, the deal finally gets Republicans to accept a tax increase on the wealthy, but this is an inside-the-Beltway symbolic victory. If anyone believes this will make the GOP more amenable to future tax increases, they don’t know how rabidly extremist the GOP has become.
The deal also extends unemployment insurance for more than 2 million long-term unemployed. That’s important.
But I can’t help believe the President could have done better than this. After all, public opinion is overwhelmingly on his side. Republicans would have been blamed had no deal been achieved.
More importantly, the fiscal cliff is on the President’s side as well. If we go over it, he and the Democrats in the next Congress that starts later this week can quickly offer legislation that grants a middle-class tax cut and restores most military spending. Even rabid Republicans would be hard-pressed not to sign on.
What You Need to Know About the Fiscal Cliff Before You Go to Your New Year's Party
Yes, we're going over the cliff. Yes, there's probably going to be a bipartisan deal. No, you shouldn't freak out.
By Molly Ball
Reuters
So, you want to go out drinking for New Year's Eve, but you also want to
know what's going on with the fiscal cliff. (Surely this describes most
Atlantic readers: both fun-loving and well-informed.)
Do we have a deal or what? If we do, what's in it? Is it good or bad?
Here's a quick FAQ to make you sound smart -- at least until the third
glass of champagne. After that, we can't help you.
Is there going to be a deal? What's the latest?
A deal
appeared imminent late Monday, with Senate Minority Leader Mitch
McConnell declaring shortly before 3 p.m. that the two sides were "very,
very close" and had "reached an agreement on all of the tax issues."
President Obama said earlier in the afternoon that a deal was "within
sight." Led by McConnell (for the Republicans) and Vice President Biden
(for the Democrats), the two sides had come to tentative agreement on
making permanent the current tax rates for individual income under
$400,000 and family income under $450,000, and allowing rates to rise to
their Clinton-era levels for higher incomes. Accord had also been
reached on permanent fixes to the Alternative Minimum Tax, capital gains
tax, and estate tax, plus temporary measures to address the child tax
credit and earned income tax credit.
National Journal's Chris Frates has the details following post.
What are they still haggling about?
The fact that the
parties have agreed on tax rates resolves the No. 1 sticking point up to
now and bodes extremely well for a deal on the rest. But "the rest"
still has to be worked out.
Remember, the major components of the
so-called fiscal cliff are (1) the expiration of the Bush tax cuts, and (2) the spending cuts set to kick in automatically as a result of the
"sequester" agreement that resolved the 2011 debt-ceiling fight.
With
the former largely dealt with, the latter is the biggest thing still on
the table. Neither side wants to see defense and discretionary spending
indiscriminately slashed as the sequester would do, but Republicans
would like to see substantially more spending cuts in other areas to
compensate.
How is the president feeling about all this?
Obama gave
a remarkably loose, jokey statement before a backdrop of middle-class
Americans at the White House Monday afternoon, upbraiding Congress for
not getting its you-know-what together on a more overarching agreement
that would more meaningfully reduce the deficit and fix the tax code.
Republicans acted stung by the president's performance, but it appeared
aimed primarily at convincing Senate Democrats that the deal was good enough to support.
"My preference would have been to solve all these problems in the
context of a larger agreement, a bigger deal, a grand bargain, whatever
you want to call it," Obama said. "But with this Congress, that was
obviously a little too much to hope for at this time."
How should Republicans be feeling about this?
As a deal
lurched into view Monday, McConnell was urging quick passage of the
agreed-upon tax components, with spending cuts to be decided and passed
later. That was leading to some grousing among conservative Republicans
who noted, with some accuracy, that when the tax increases come up
front, the hypothetical future spending cuts often have a way of
evaporating. But a lot of Republicans seemed to be resigned to their
fate, like Senator Lindsey Graham, who said on Fox News Sunday,
"Hats off to the president. He won." Graham added, "I want to vote for it even though I won't like it."
How about Democrats?
Some on the left, like Senator Tom Harkin and commentator Jonathan Chait,
were fretting that Obama was giving away the store by not holding to
his initial threshold of $250,000 in income to be protected from tax
hikes. "This looks like a very bad deal the way this is shaping up,"
Harkin said on the Senate floor, noting that it would make permanent the
vast majority of the tax cuts Democrats fought so hard against when
they were proposed by President George W. Bush in 2001-03. Obama, in his
statement, tried to quell such qualms, talking up the GOP's concessions
and warning of the consequences of the sequester cuts to liberal
priorities like Head Start. "Keep in mind that just last month
Republicans in Congress said they would never agree to raise tax rates
on the wealthiest Americans," Obama said. "Obviously, the agreement
that's currently discussed would raise those rates, and raise them
permanently."
Wait, don't they still have to vote on this? Why are they all going home? ARE WE GOING OVER THE CLIFF?
Calm down.Yes, the House was headed home late Monday and would not
vote on any prospective deal before the dawn of the New Year.Yes, that
technically means we'll miss the December 31 deadline and "go over" the
"fiscal cliff."
But what does that mean?
It means tax rates have gone up
on the income taxes you don't have to file until April 2014;
it means
the government is supposed to start gradually implementing some cuts to
programs. Both of these automatically-triggered events can be fixed
retroactively by a vote in the next couple of days with no material
effects.
The biggest immediate danger of going over the "cliff" -- which
the anti-cliff-alarmists have always preferred to call a "slope" or a
"curb" for exactly this reason --
is that it would freak out the stock
market. But the markets are closed until Wednesday, and investors aren't
likely to panic as long as it's clear a deal is in the works.
December 31, 2012 | 3:09 p.m.
Updated: December 31, 2012 | 3:57 p.m.
AP Photo/Susan Walsh
Senate Minority Leader Mitch McConnell passes reporters as he walks from the Senate floor to his office on Monday.
It’s New Year’s Eve, the countdown to the fiscal cliff
is on, and the message from lawmakers is a collective "Let’s see what
happens."
Here’s a stitched-together look at how members passed the day:
Democratic Rep. Gerald Connolly of
Virginia huddled near one of the fireplaces in the speaker's lobby,
chatting with reporters—it was chilly on the House floor, he said.
Republican Rep. Tom Cole of Oklahoma talked into a TV
camera near the statue of fellow Sooner-stater Will Rogers.
At the North
end of the Capitol, Senate Republican Whip Jon Kyl of
Arizona ladled chicken Florentine soup into a throwaway container,
grabbed a pack of crackers, and, when asked whether he was frustrated
about the status of the fiscal-cliff talks, told a reporter, "Don't talk
to me now, please."
So, yes, the mood on the Hill this New Year's Eve is a mix of idle tension and expectation.
Even though Senate Minority Leader Mitch McConnell and Vice President Joe Biden are engaging in legislative alchemy to negotiate a fiscal-cliff exit ramp and optimism reigns--for now--it's frustration that rules.
"There's only two people in this town trying to solve the problem.
The other 534 are sitting around waiting for somebody to agree to
something in a back room.
It ought to be done out in the open. The
public's business ought to be public," Sen. Chuck Grassley, R-Iowa, said in an interview.
President Obama said negotiators are homing in on a deal to prevent
across-the-board tax hikes after midnight. Even though it's not done
yet, details of what has been agreed to
began to emerge. That's where the optimism comes in, especially for
members in the majority, like Senate Finance Committee Chairman Max Baucus, D-Mont.
"This is democracy. I'm not frustrated at all. It's democracy, like
Winston Churchill's description of democracy. There are fits and starts.
But we all work it out," Baucus said.
The sourness of being left out of talks is not limited to Republican
senators. Their minority counterparts in the House are left wondering
what's next as well. "Unfortunately, a majority of us are not involved in any of the
negotiations, and we go back to our districts and people say, 'What are
you doing? What's happening?' And we're waiting like anybody else," said
Democratic Rep. Dutch Ruppersberger of Maryland.
While frustration over the status of the talks is common in the
Capitol, the blame for the stalled process lies depends on who's
talking. For Cole, the issue lies in the Democratic-controlled Senate.
"When the president sends a budget up here that not a single Democrat
votes for in two years, then you know we don't have a serious
negotiating partner in the White House or the Senate," he said.
But for Connolly, the issue has been House leadership, which, he
argues, has waited until too close to tonight's deadline to solve the
cliff.
"The whole process is frustrating. I guess I start with being
frustrated with [how] the House leadership here has squandered time.
It's unconscionable. We have been out on recess for 15 weeks since
August. I thought it was a crisis. It's not like we're caught unawares
on New Year's Eve," he said.
The last-minute nature of the talks, say some members, is a symptom of a deteriorating political center.
"It should have been worked out earlier. There used to be the center,
which played a role when we got in these stalemates, but the centers
are gone," said Rep. Carolyn Maloney, D-N.Y.
Kyl, who's retiring after 17 years in the upper chamber, expanded on
his mid-ladle comments. Asked to gauge the level of annoyance at the
process, he was eager to wrap up and spend the day, if possible, with
family.
"I'm frustrated. We shouldn't have gotten ourselves in this position.
My wife would like to see me on New Year's Eve and I'd like to be with
my family, but it is what it is," he said.
