Politico: Inside the fiscal talks - San Diego, California Talk Radio Station - 760 KFMB AM - 760kfmb

Politico: Inside the fiscal talks

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Cut through the fog, and here's what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion — and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and "war savings." And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner (R-Ohio). The two men had a 30-minute phone conversation Wednesday night  — but the private lines of communications remain very much open.

No doubt, there will be lots of huffing and puffing before any deal can be had. And, no doubt, Obama and Congress could easily botch any or all three of the white-knuckle moments soon to hit this town: the automatic spending cuts and expiration of the Bush tax cuts, both of which kick in at the end of this year, and the federal debt limit that hits early next.

(Also on POLITICO: Can McConnell, Obama overcome bad blood?)

But it's clear to veterans of this budget fight a deal is there to be done. Here is the state of play that is sketched out by top officials in both parties:

The coming tax hike

There is no chance taxes are not going up for people making north of $250,000 — and virtually no chance that doesn't include their tax rates, too.

Republicans publicly say they are opposed to rate hikes — but privately they know they are going up, if not all the way to the Clinton-era 39.6 percent, then darn close.

The reason is simple math. Take a look at this list, and you will see that any tax loopholes worth closing won't get Obama or Republicans close to their targets.

To those involved in the talks, it's not really a mystery how big the overall hike will be. Boehner was for $800 billion before the election, and Obama slapped down an opening bid of $1.6 trillion after. So it doesn't take Ernst and Young to add those numbers, divide by two and know the president wants to end up close to $1.2 trillion.

(PHOTOS: Fiscal cliff's key players)

House Republicans, already worried about possible primary challenges in 2014, are pleading to keep that number below $1 trillion, even if it is by a hair. Still, they know it's likely to come in a shade higher. The safe bet is just over $1 trillion for the final number. A bit less, and that's a notable win for Boehner.



Read more: http://www.politico.com/story/2012/11/84364.html#ixzz2DdWiaYxT

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