Both Parties in Congress May Have Reason for January Deal

[Purveyor]

Republicans and Democrats in the U.S. Congress are starting to talk about the benefits of waiting until January to reach a budget deal, even as House Speaker John Boehner signals openness to allowing tax rates to rise for millionaires.

President Barack Obama rejected a Dec. 14 offer by Boehner to raise rates on household income above $1 million a year and lift the federal debt ceiling in exchange for containing entitlement program costs. While Obama wants higher rates for income above $250,000, Boehner’s offer marked movement because he has opposed increased rates for any income level.

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Still, making a deal in early January that extends income tax cuts for all except top earners could be easier for Boehner to sell to House Republicans because all rates will have risen as of Jan. 1. At that point, Obama will have made good on his campaign pledge to raise rates for top earners, giving him political cover to accept cuts to entitlement programs that Republicans are seeking.

Republican ‘Incentive’

“One could make the argument that Republicans would have incentive to do it so they don’t have to vote for tax increases” and can vote for a tax cut in 2013, said Representative Joseph Crowley, a New York Democrat.

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http://www.bloomberg.com/news/2012-12-17/both-parties-in-congress-may-have-reason-for-january-deal.html

[DanM]

1. Boehner wants a January deal . . .

. . . because that's after his election as Speaker will no longer be in jeopardy. Cynical.

[1StrongBlackMan]

2. From the article ...

Still, making a deal in early January that extends income tax cuts for all except top earners could be easier for Boehner to sell to House Republicans because all rates will have risen as of Jan. 1. At that point, Obama will have made good on his campaign pledge to raise rates for top earners, giving him political cover to accept cuts to entitlement programs that Republicans are seeking.

I agree with the first part; but the second part makes no sense. I will be easier for boehner to sell re-enstating the tax cuts for those under $250K after we go over the cliff, than have his caucus to vote on it before; but once we go over the cliff, there is no reason for President Obama to give anything more on entitlements than what he has already offered, e.g., cost saving, cutting reimbursements to teaching hospitals, negotiation on drug prices.