Word has been trickling in from a variety of sources all day about the basic outline of a deficit-reduction deal that President Obama and Speaker John Boehner are nearing. While both sides are denying it in their preferred arenas — the White House through its spokesperson at a press conference, John Boehner with a telephone call to Rush Limbaugh — it still seems like we've got our hands on the latest trial balloon! Summary: It sucks for Democrats.
The White House has maintained its unwavering promise that the President won't sign any major deficit reduction deal without substantial revenue increases. Much of this could come through closing tax loopholes and canceling ending major subsidies, but obviously the cornerstone of the White House's call for more revenues is to return the highest two income tax bracket rates to their Clinton-era levels. But yet again, it's starting to sound like that's being put on hold.
The framework for deficit reduction President Obama will lay out Wednesday is a mixed bag for members of his party. It borrows heavily in some areas from the conservative-leaning Bowles-Simpson recommendation, but commits elsewhere to enhancing the cost-cutting programs in the health care law and rejects Republican proposals to privatize entitlements, or maintain or reduce the tax burden on the upper class.
The White House released its big budget proposal today for fiscal year 2012, which begins in October. There's been talk about major cuts the administration would be making, and this proposal would supposedly cut $1.1 trillion in deficits over the next ten years. It mostly accomplishes that through a five-year spending cap on non-defense discretionary funding, an area that only accounts for 12% of the budget anyway and isn't related to America's long-term debt problems. But it may make President Obama seem tough to Washington Post columnists, so it must be done!