The "Gang of Six" plan unveiled yesterday offers $1 trillion in new revenue as part of its deficit-reduction package. However, CBPP's Robert Greenstein explains that this is not the same thing as the $1 trillion in new revenue from the previous grand bargain that House Speaker John Boehner walked away from. The grand bargain plan assumed that the Bush tax cuts for the rich would be made permanent (thus reducing revenue by $700 billion) and then added $1 trillion on top of that, for a net total of $300 billion in new revenue. The Gang of Six plan assumes the Bush tax cuts for the rich are allowed to expire and then adds $1 trillion more, for a net total that's genuinely $1 trillion.
In other words, regardless of any legerdemain with CBO scoring, the Gang of Six plan raises taxes way more than the plan Boehner rejected because his conference was dead set against it. And that's in addition to the fact that it's obviously far too complex to be put into legislative language, scored, and moved through Congress in less than two weeks. So explain to me again why everyone was so excited about this?
I suppose one advantage of the G6 plan is that it makes only a few cuts immediately and basically punts everything else into the future, including the tax hikes. And since conservatives, in addition to being anti-tax, are also convinced that spending cuts promised for the future are just a sham, maybe they figure that tax hikes promised for the future are also a sham. So the G6 plan allows them to vote for kicking the can down the road without any intention of ever voting for the future tax hikes.
Or something. Frankly, I'm not really sure what's going on anymore and I'm not sure anyone else is either. For now, I'm going to stick with my guess that we'll blow by the August 2nd deadline, markets will go nuts, and we'll end up with some kind of debt ceiling increase by August 7th. We'll see.