STOCK MARKET WATCH -- Tuesday, 12 June 2012

[girl gone mad]

19. As Fiscal Slope Negotiations Heat Up, Support for Letting Tax Cuts Expire, From Republicans

http://news.firedoglake.com/2012/06/11/as-fiscal-slope-negotiations-heat-up-support-for-letting-tax-cuts-expire-from-republicans/

It’s a testament to the mixed signals of the Democratic Party on taxes and the end-of-the-year fiscal situation that Matt Yglesias can talk to the same Senator on the same weekend as I and get a completely different impression. He basically saw no appetite for letting the Bush tax cuts expire completely and then coming back with an “Obama tax cut” package, while I did, particularly from Sen. Sheldon Whitehouse.

It is worth pointing out, however, that while Matt and I and others were reading tea leaves in Providence with Senators on the more liberal side of the spectrum, the ones more interested in using the fiscal slope as an opportunity to put together a massive deficit reduction package were making their move:

In an ornate room in the Capitol last Wednesday night, the Democratic senators who could hold the key to preventing a fiscal train wreck gathered for dinner and a talk with economists about their options for dealing with nearly $8 trillion in combined tax increases and spending cuts that are to be put in place automatically in January [...]

What separated the unannounced Wednesday session, organized by Senator Dianne Feinstein of California, from the earlier ones was the collective weight of the participants: the Senate’s No. 2 and No. 3 Democrats, Richard J. Durbin of Illinois and Charles E. Schumer of New York; the chairman of the Finance Committee, Max Baucus; and the chairman of the Budget Committee, Kent Conrad.

This looks like Jeff Merkley’s worse nightmare coming to pass, with a top-level secret huddle rather than a public process. Max Baucus, who confirmed the meeting, also said that the Senate needs to not “box itself out” with legislation too quickly. Meaning that the meetings will continue in back rooms without public scrutiny. One Senator, Johnny Isakson (R-GA), said that even talking about the talks’ existence would be a problem.