Fiscal framework emerges: Tax Now, Cut Later
Listen to top Democrats and Republicans talk on camera, and it sounds like they could not be further apart on a year-end tax-and-spending deal — a down payment on a $4 trillion grand bargain.
But behind the scenes, top officials who have been involved in the talks for many months say the contours of a deal — including the size of tax hikes and spending cuts it will most likely contain — are starting to take shape.
Cut through the fog, and here’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and “war savings.” And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner (R-Ohio). The two men had what one insider described as a short, curt conversation Wednesday night — but the private lines of communications remain very much open.