mykeystrokes.com

President Obama’s opening bid for negotiations resolving the “fiscal cliff” has surfaced, and the contours are both familiar and sound. The Washington Postand an unofficial outline drafted by Republican aides both suggest that the administration has essentially proposed its budget request for fiscal 2013. And the president’s latest budget offers a solid framework for navigating the fiscal obstacle course, as it would substantially moderate the pace of deficit reduction while making a responsible down payment on longer-term deficit reduction. Relative to current policy, the contours are shaping up roughly as follows:

  • Allow the upper-income Bush tax cuts to expire (+$850 billion)
  • Restore the estate and gift taxes to 2009 parameters (+$120 billion)
  • Curb tax expenditures (+600 billion)
  • Stimulus spending (-$50 billion)
  • Extend emergency unemployment benefits (-$30 billion)
  • Extend or replace the payroll tax cut (-$110 billion)
  • Continue AMT patch, “doc fix,” and tax extenders (-$240 billion)
  • Defer sequestration…

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