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The Corner

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An Obstacle to a Deal



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Let’s say that President Obama and Speaker Boehner agree on a deal that allows $1 trillion of the scheduled tax increases to take place over the next decade and cuts $1 trillion in spending over the same period. Most Republicans will view that as a deal with a 1-1 ratio of spending cuts to tax increases, and a lot of them will consider that ratio inadequate. But Democrats will look at the same deal and think about it differently. They believe that they don’t need any deal to get large tax increases. If they extend only the middle-class tax cuts, either before or after January 1, they get $800 billion in revenues. So from their perspective, the deal makes $1 trillion in cuts for $200 billion of extra revenue: a 5-1 ratio. It would be hard enough for both sides to agree to the same ratio; it’s even harder when they aren’t calculating that ratio the same way.



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