If you're just joining us for news about Obama's compromise on the Bush tax cuts, here's how to catch up.
-- The plan's outline is here.
-- If you don't know what to think, choose from the buffet of reactions here.
-- Top Democratic mayors support the plan here.
-- House Democrats reject the plan here.
-- The Bush tax cuts, unemployment benefits and payroll tax cuts -- three key elements of the plan -- are explained here, here and here.
The last point I want to make on the Bush tax cut compromise is about perspective. Critics of the plan have said that the plan is bad for the deficit, bad for the economy, and bad for the low-income poor. Are they right? Yes and no. Depends on what you compare it to.
This $800 billion plan is a deficit disaster ... but compared to the Senate Democrats' plan -- permanent extension of the Bush tax cuts for 98 percent of Americans, which would cost about $3 trillion over ten years -- its impact on national debt is fairly ho-hum, especially if it expires into a reformed tax code.
Using $120 billion (or so) to extend tax cuts for the rich is a poor use of finite resources ... but compared to a scenario where there is no deal, and none of the Bush tax cuts are extended, and American families' tax burden rises by thousands of dollars, a $120 billion compromise looks like a cinch when you're talking about keeping a $14 trillion economy afloat.