Fiscal Cliff

At a dinner with lobbyists Thursday night, McConnell disclosed that Senate Republicans were eyeing a so-called “two-bill strategy” increasingly being pushed by lawmakers in both parties, according to multiple sources in the room.

The idea would be to advance two bills, giving each party an opportunity to vote on the approach they favored, but only one would be signed into law: The extension of the Bush-era rates for families who earn less than $250,000 annually.

But House Republicans haven’t bought into this scenario yet, the latest divide between the House and Senate GOP in the already tense negotiations.
Under one possible scenario, the House would take up a Senate-passed bill to extend the Bush-era rates for all but the top 2 percent of wage earners and increase taxes on capital gains and dividends from 15 percent to 20 percent, sending that to President Barack Obama’s desk on the backs of Democratic votes in the House.
Under this idea, the Republican-led House would also pass a competing bill to extend the Bush tax rates for all wage earners, including wealthy Americans, but that bill would be derailed in the Democratic-led Senate.


Read more: http://www.politico.com/story/2012/12/mcconnell-signals-movement-on-taxes-85106.html#ixzz2F46c6z7w

The feds can't run out of money.

There's no cure for stupid.

In exchange for the higher rates for millionaires, Boehner is demanding changes to federal health and retirement programs, which are projected to be the biggest drivers of future federal borrowing. Boehner wants $1 trillion in total savings, starting with adoption of a less generous way of calculating inflation that would save $200 billion over the next decade — about two-thirds of it by reducing Social Security cost-of-living adjustments.

Obama has offered $600 billion in spending cuts, with $350 billion coming from health programs and none from Social Security. Many congressional Democrats adamantly oppose dragging the program into the year-end talks.

Still, if Republicans make an offer on higher tax revenue that Democrats consider big enough, senior Democrats have signaled that they are open to the change in how inflation is calculated for the tax code and other federal programs, known as chained CPI.

The tax issue also remains problematic. Obama has called for the Bush tax cuts to expire for income over $250,000 a year, a move that would raise about $830 billion over the next decade, according to the Joint Committee on Taxation. He also wants higher taxes on inherited estates and new limits on tax breaks for the wealthy, to bring total new taxes to $1.6 trillion.

White House officials last week dropped their tax demand to $1.4 trillion and may be willing to go lower, Democrats said. But setting the income threshold for tax rate hikes at $1 million, as Boehner proposed, would sacrifice too much money, they said, adding that a threshold of $375,000 or even $500,000 might be more acceptable.

If a pact were reached, people in both parties say it likely would include a postponement of $100 billion in automatic spending cuts from the Pentagon and other agency budgets next year.
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Never going to happen - we won't get a deal before the end of the year at this point.

And we don't want one...