A VISUAL BREAKDOWN…. Analysis of any compromise is invariably going to focus on who got what, and in this case, the New York Times offers this breakdown of the tax policy agreement between the White House and congressional Republicans.
Of its estimated $900 billion-plus cost over two years, roughly $120 billion covers the high-end tax cuts and the estate tax cut, $450 billion covers Mr. Obama’s wish list and $360 billion covers the tax cut extensions both parties favored.
Tim Fernholz asked rhetorically, “Was anyone else expecting a $450 billion stimulus this year? Me neither.”
I thought I’d go ahead and create a visual for this. The left column shows the cost of the Republicans’ high-end tax cuts in the deal; the middle column shows the cost of President Obama’s progressive priorities like an extension of unemployment benefits; and the right column shows the cost of the tax cuts for those making under $250,000, which both parties generally supported. (The y axis is in billions of dollars.)
The clear majority of the costs here are going to Democratic priorities. And why on earth would Republicans go along with a proposal that includes expenses beyond their own priorities? Because as Jon Chait noted yesterday, “Republicans love them some rich folk,” and GOP leaders are “willing to bargain away a lot to help the very rich.”
That doesn’t necessarily make the agreement a great deal, but it’s a context worth keeping in mind.