Government Shutdown Averted: $1 Trillion Dollar 'Deal' Cuts IRS Funding for Affordable Care Act, Drops Millionaires' Tax

 There won't be a partial government shutdown, apparently, as House and Senate leaders negotiated a $1 trillion deal to fund the government through 2012, with 27 hours to spare. The bill eliminates the restrictions on travel to Cuba that the administration opposed. It still contains a ban on the District of Columbia spending local tax money on abortion, cuts out funding for the IRS to begin gearing up for implementation of the Affordable Care Act, and of course blocks new light bulb standards, standards that were signed into law by George W. Bush.

On the payroll tax cut extension, unemployment benefit extension, Medicare "doc fix" front, there are possible outcomes, the best of which is a temporary two-month extension so they can come back and hammer out the precedent-setting pay-fors. Apparently all sides have conceded that tax cuts for the middle class have to be paid for, even if those for rich people don't, so someone is gonna get hurt. And it's not going to be millionaires, because that demand has been officially dropped.

And it’s unclear what they got in return, aside from a pledge from Republicans not to jam Democrats with their partisan payroll tax bill.

With the millionaire surtax gone, most of the cost of the bill will likely be paid for with budget cuts agreed to in Super Committee negotiations, which ultimately failed. To make up the difference, Democrats are insisting that the GOP abandon other, conservative payfors, such as greater means-testing in Medicare. Instead, they’re pushing Republicans to accept ideas like ending a tax benefit for corporate jet owners, and counting war savings toward the cost of the bill. [...]

Outside the payfors, Republicans are still pushing hard for a rider that would force the Obama administration to make a swift decision on the construction of the Keystone XL oil pipeline. Democrats, both on the Hill and at the White House, are softening their opposition to this demand.

The final call on that one is the State Department's, which has refused to play so far, saying "Should Congress impose an arbitrary deadline for the permit decision ... the Department would be unable to make a determination to issue a permit for this project."

Disturbingly, Sen. Max Baucus (D-MT) appears to be willing to deal on unemployment benefits cuts, saying "one consideration was to link the eligibility period of unemployment benefits to the level of joblessness in each state."

It's not going to be at all pretty, but they'll get their holiday vacation.

Daily Kos / By Joan McCarter | Sourced from

Posted at December 16, 2011, 5:11am

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