McConnell & Biden close to deal: tax cuts for wealthy capped at $400,000 (similar to deal House Republicans rejected) | Politics & Twitter |

Excerpts from bullet point news summary by Chuck Todd, Mark Murray, Domenico Montanaro, and Brooke Brower of NBC News

...Senate Minority Leader Mitch McConnell and Vice President Biden are very close to a deal. According to a source with knowledge of the negotiations, Biden is offering McConnell raising tax rates on income above $400,000-plus and an up-or-down vote on the estate tax in return for unemployment insurance and having the sequester offset by some of the increased revenues. (Folks, this is VERY similar to deal that President Obama offered House Speaker John Boehner, but from which Boehner walked away.) From what we understand, McConnell wants a deal -- he wants to get this tax issue off the table. So they are close. The question is whether Boehner would bring such a deal to the floor and whether it could pass in time. But if a Biden-McConnell deal gets 70 or more votes in the Senate, Boehner might not have no choice but to bring the legislation to the House floor.

*** Why we are possibly headed off the cliff: So it’s possible Congress could still come to some kind of agreement, but it's always been a likely outcome that we're headed to go off the so-called fiscal cliff. The reason: It's become the easiest -- and safest -- path for both sides; NBC's Mike Viqueira has called it the "inertia scenario." For Democrats, going over the cliff ensures the elimination of the Bush tax cuts, and it gets them the tax revenue they've been demanding without having to give up a thing. What's more, Democrats probably hold the upper hand if we go off the cliff, given all the polling suggesting that the American public would blame Republicans more than Democrats. For Republicans, having the Bush tax cuts expire means they don't have to vote to raise taxes and thus break any tax pledge. Instead, beginning in the New Year, they get to vote to lower them for the middle class (the income threshold TBD). 

*** What happens if we go over the cliff: But here’s an important reminder if we go over the fiscal cliff: The financial/economic world won’t come to an end, at least in the short run. While some things will take place immediately, others (including rising tax rates and government cuts) will be spread out over the year, and Congress has the ability to fix them retroactively. As the New York Times wrote last week, “Some hits — like a two percentage point increase in payroll taxes and the end of unemployment benefits for more than two million jobless Americans — would be felt right away. But other effects, like tens of billions in automatic spending cuts, to include both military and other programs, would be spread out between now and the end of the 2013 fiscal year in September. These could quickly be reversed if a compromise is found. Similarly, the expiration of Bush-era tax cuts on Jan. 1 would not have a major impact on consumers if Congress quickly agreed to extend them for all but the wealthiest Americans in early 2013, as is widely expected. Other probable changes, like a jump in taxes on capital gains and dividends, would most likely be felt over a broader period rather than as an immediate blow to the economy.” Yet one thing is for certain if we go over the cliff: The financial markets won’t like it.

*** The blame game: In his interview on “Meet the Press,”President Obama said congressional Republicans would get the blame if the country goes over the fiscal cliff. “Congress has not been able to get this stuff done. Not because Democrats in Congress don't want to go ahead and cooperate, but because I think it's been very hard for Speaker Boehner and Republican Leader McConnell to accept the fact that taxes on the wealthiest Americans should go up a little bit, as part of an overall deficit reduction package.” When NBC’s David Gregory asked Obama if he would deserve any blame, the president replied, “I negotiated with Speaker Boehner in good faith and moved more than halfway in order to achieve a grand bargain. I offered over a trillion dollars in additional spending cuts so that we would have $2 of spending cuts for every $1 of increased revenue. I think anybody objectively who's looked at this would say that we have put forward not only a sensible deal but one that has the support of the majority of the American people, including close to half of Republicans.” [MORE]

Via Eric Byler