A ‘fiscal cliff’ deal is near: Here are the details

Washington Post - Wonkblog ^ | 17 Dec 12 | Erza Klein

[SkyPilot]

All at once, a

[SkyPilot]

Have we built the border fence yet that the Democrats promised Reagan in exchange for his amnesty for illegals?

Ted Kennedy phoned in from Hell and said he is still working on it.

[chopperjc]

How much better was the “grand bargain” deal last year before House republicans shot it down? I’ll bet there are some that wish that was back on the table now?

What is my point? Do not let the good be the enemy of the perfect. Look I am not a fan of Boehner’s but he has very little to negotiate with. The grand bargain was a great start for conservative principals. Obviously not perfect but much better than we will be stuck with this time. We played poker with the election and lost.

[kabar]

Well, the Feds don't count Gas, Food, or Healthcare when computing COLA raises. So, you see....there is no inflation! Aren't you happier now?

You are wrong.

The SSA uses the BLS CPI-W to calculate COLA. CPI-W monthly indicies since 1974

What goods and services does the CPI cover?

The CPI represents all goods and services purchased for consumption by the reference population (U or W) BLS has classified all expenditure items into more than 200 categories, arranged into eight major groups. Major groups and examples of categories in each are as follows:

FOOD AND BEVERAGES (breakfast cereal, milk, coffee, chicken, wine, full service meals, snacks)

HOUSING (rent of primary residence, owners' equivalent rent, fuel oil, bedroom furniture)

APPAREL (men's shirts and sweaters, women's dresses, jewelry)

TRANSPORTATION (new vehicles, airline fares, gasoline, motor vehicle insurance)

MEDICAL CARE (prescription drugs and medical supplies, physicians' services, eyeglasses and eye care, hospital services)

RECREATION (televisions, toys, pets and pet products, sports equipment, admissions);

EDUCATION AND COMMUNICATION (college tuition, postage, telephone services, computer software and accessories); OTHER GOODS AND SERVICES (tobacco and smoking products, haircuts and other personal services, funeral expenses).

Also included within these major groups are various government-charged user fees, such as water and sewerage charges, auto registration fees, and vehicle tolls. In addition, the CPI includes taxes (such as sales and excise taxes) that are directly associated with the prices of specific goods and services. However, the CPI excludes taxes (such as income and Social Security taxes) not directly associated with the purchase of consumer goods and services.

The CPI does not include investment items, such as stocks, bonds, real estate, and life insurance. (These items relate to savings and not to day-to-day consumption expenses.)

For each of the more than 200 item categories, using scientific statistical procedures, the Bureau has chosen samples of several hundred specific items within selected business establishments frequented by consumers to represent the thousands of varieties available in the marketplace. For example, in a given supermarket, the Bureau may choose a plastic bag of golden delicious apples, U.S. extra fancy grade, weighing 4.4 pounds to represent the Apples category.

The Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) is based on the expenditures of households included in the CPI-U definition that also meet two requirements: more than one-half of the household's income must come from clerical or wage occupations, and at least one of the household's earners must have been employed for at least 37 weeks during the previous 12 months. The CPI-W population represents about 32 percent of the total U.S. population and is a subset, or part, of the CPI-U population.

[Mouton]

If that jerk thinks last november was a rout, wait till he seens what happens in 2014 because putting this off for one year will put all the GOP on the firing line in 2014 based on what they do going into 2014. This jerk boehner did this to himself in 2011 when he put everything off till after the 2012 election with the stupid cliff idea. He had real power then and decided to punt.

What a lame brain and someone who should be a barkeep at a whore house, not speaker of the house albeit their is not a big difference between the two.

[SkyPilot]

This could still fall through. Also, if there is any real teeth to Entitlement reform, the Democrats won't give it one vote.

The only GOP fall back Plan "B" is to let Obama take us over the cliff, watch the recession unfold, watch the military get destroyed, and then hope that when the debt ceiling expires in mid February they can rally the public to their side and refuse to raise it without real Entitlement reform.

That's probably a loser as well.

Too many people taking Entitlements, and not enough pulling the wagon to make it go faster.

Obama's approach is to whip the horses that are pulling wagon even harder, until they bleed. This is NOT about tax revenue for him, it is about hurting "rich whitey" and making everyone poorer. I am 100% convinced of that.

[kabar]

See my post #63

[SkyPilot]

Well thought out post. I stand corrected. Thanks.

I have been to a grocery store in the past three years.

Food prices have gone through the roof. No COLA increase from 2008 - 2012 remotely matched reality.

In the end, what they say is tied to the COLA and what is reality is far different.

http://www.nbcnews.com/business/seniors-face-tiny-social-security-raise-next-year-1C6407453

[Eleutheria5]

A Doggerel of David

I feel for the country that gave me birth,
Though I live elsewhere on the earth
This is the way the world deflates
With debt ceilings and credit rates
Fatigued into submission, all
Paralyzed, watching the bottom fall

[SkyPilot]

This jerk boehner did this to himself in 2011 when he put everything off till after the 2012 election with the stupid cliff idea. He had real power then and decided to punt.

Well, I agree with you there.

The whole "debt deal" with hopes in a "Super Committee" was folly. Moreover, agreeing to gut Defense with 50% of the cuts when it is 17% of the budget was beyond stupid. But, the GOP fell for it.

[SkyPilot]

We played poker with the election and lost.

Pretty much.

[socialism_stinX]

I don't think the explanation that "the GOP forced us to cut SS and Medicare" would be accepted and believed by the voters. It looks like the plan is to make relatively modest reductions in the growth rate of spending on SS and Medicare, and the modest political cost has to be shared by both parties. Considering that the democrats control the White House and the Senate, the voters will never believe that the GOP forced them into anything.

At a high level, it looks like Obama and Boehner are trying to get more revenue through economic growth, as the Fed continues to print money and mortgage rates fall below 4%. Actually, with our ongoing oil production boom and robust automotive replacement cycle happening right now, that growth plan just might work. That growth plan could work, if we can negotiate an end to the Iranian nuclear weapons program, or make a quick surgical military strike on Iran that only drives up oil prices for a month or two. We could actually have a fairly strong economy next year in that scenario.

[Colonel_Flagg]

Barry’s got trouble to his left on this.

Given that the only person to Barry's left is Josef Stalin, I think he comes out pretty good in this. As the left ALWAYS does.

[kabar]

Again, they would have been blamed either way. If there was no deal, the coming losses of 2 million jobs due to Sequestration would be blamed on them. The gutting of the military would be blamed on them because they voted for Sequestration 18 months ago. They would be blamed when the debt ceiling expired and SS checks were (once again) threatened to not be direct deposited because of them (even if the House authorized the funding in a seperate line).

Blamed is one thing. Commiting political suicide is another. If the Reps don't stand by their principles, what is left? Sequestration was a bad deal, but it was Obama's idea and he signed it.

Sequestration was the result of the debt limit fight. The GOP traded the deal for getting spending reductions later. That hasn't happened. We are still running $1 trillion deficits and spending will continue to increase. We are giving Obama more revenue for more promises of spending cuts. The revenue will be used to keep the welfare state afloat.

The Dems have been saying that SS does not contribute to the debt. We know that is a lie. SS has been running in the red since 2010 and the payroll tax holiday means that the General Fund must come up with $130 billion a year to fund the shortfall. 42 cents of every federal dollar spent is borrowed. Let Obama explain why the SS checks can't be sent out.

The COLA adjustment was all they could get. Yes, there is a formula in place now, but even with that there was no COLA increase until last year. The Govt saved Billions by cooking the books and not issuing COLAs even when there was real inflation. Will the "deal" make COLAs (for SS, Fed pensions, and military pensions) even smaller? Absolutely!

There was no cooking of the books. COLAs are like compound interest. When you start reducing them, it will have an enormous impact on future spending and unfunded liabilties. It will keep the system treading a little longer without making the changes needed to reform the program. But it is just more kicking the can down the road.

It will compress pensions between those at higher rates and those at the lower rates. I have no doubt that the deal is that those with lower pensions will not be affected and those with higher pensions will receive lower COLAs. The net impact will be a closing of the gap between those at the bottom and those at the top. It fits Obama's idea of social justice and redistribution of wealth. It is part of the means testing that will be the solution for all of the entitlement programs. It is called communism.

Both parties do not want to make the hard decisions necessary to reform the entitlement programs. The costs will still continue to go up as 10,000 people retire a day for the next 20 years. The population of those over 65 will double in the next 20 years--one in five by 2030. And there will be fewer workers to tax to pay for those benefits.

[lu shissler]

The Boner on TV was looking just a bit drunk to me!!

[cableguymn]

- Raise the debt ceiling for a year

(and a year after that and a year after that....)

- Hints at lowering COLA for SS and pensions

(only a hint, a minor suggestion)

- Vague entitlement “reform” - Payroll tax stays

(maybe, someday, After pigs fly)

- Tax raise rise for folks somewhere between $250 and $1 million a year; I would guess in between there

(doubtful. They will go up on EVERYONE.)

I’ll be the first to say it, there won’t be a deal.

[popdonnelly]

They took Social Security taxes out of people’s paychecks, and now they want to cut the COLA? It’s not like anyone’s getting rich on Social Security.

[kabar]

The truth is, the GOP had pretty much lost this "negotiation" before it ever started. It lost it the Wed after the election in November. Period.

The option for the House is to allow the fiscal cliff to happen, which will trigger a major recession, gut the military, kill about 2 million jobs, and will accelerate the economic death spiral.

It was lost because the GOP acted like it lost when really all that happened was the status quo. Obama received 5 million votes less than 2008. He won with just 51% of the vote. The Reps had and have leverage. They just need the cajones to use it. Let's see if we really go over the cliff. And there will be no gutting of the military. That is a red herring.

Let's get real as to what sequestration really means. We are talking about $1 trillion in cuts over a 10 year period--half from defense and half from the welfare programs. We are talking about cuts amounting to $100 billion a year out of an annual budget of $3.7 TRILLION. Does anyone really believe that we can't absorb such a puny cut? Hell, Obama is asking for $60 billion emergency aid for Sandy. In any event, we know that Congress will not stop spending and that includes both parties.

We will still have the guns versus butter battle as the welfare state continues its death spiral. And the political elites will ask for increases in taxes for the middle class. It is just a matter of time. And look for a VAT in our future. We have seen this play before. It is what happened to Europe. They are spending about 1% of GDP on defense now as they look for money everywhere they can. Spain, Grece, France, Italy, etc. are raising taxes on businesses and the rich. They are eating their seed corn. They are cutting the size of the government. They are taxing everyone at very high levels now. We will be going the same route.

[popdonnelly]

I think this is Boehner’s last fling as Majority Leader. He will be gone in the next Congress.

[mikrofon]

That too....

[PeterPrinciple]

It was lost because the GOP acted like it lost

---

You cannot compete against the message of free stuff. It is only when the free stuff is gone that many will listen to the conservative message.

So our only option is to wait until they run out of free stuff.