• Fiscal cliff deal includes at least $67.9 billion for special interests

    Getty Images for NASCAR, file

    The fiscal cliff compromise includes tax breaks worth $70 million over two years for the owners of race tracks like Charlotte Motor Speedway in Concord, N.C.

    By M. Alex Johnson, NBC News

    Taxpayers aren't the only ones who won't be flying off the fiscal cliff — this year, at least. Add race cars, movies and asparagus to the list.


    As part of their last-second deal to slam the brakes on an economy racing toward the so-called fiscal cliff, lawmakers gave the green light this week to extending dozens of business and industry tax breaks, like a cost-recovery program that will save the owners of "motorsports entertainment complexes" (that is, racetracks) about $70 million over the next two years.

    Much of the compromise agreement that President Barack Obama's autopen signed into law Thursday was targeted at individuals and families, notably preserving most of the tax cuts that passed under President George W. Bush, which were set to expire Monday. Rep. Debbie Wasserman Schultz of Florida, chairwoman of the Democratic National Committee, told MSNBC that the deal was "a big gift-wrapped present of certainty to the middle class."

    But the agreement also came loaded with extensions of separate existing tax breaks for businesses and industries, many of which had expired in the past year — about $67.9 billion in all in 2013, as tabulated by Congress' Joint Committee on Taxation.

    (The extensions will actually cost much more: Not only were they made retroactive to cover 2012, but some of the breaks and credits would be in effect for 10 years if left in place. Many cover only one or two years, however.)

    Read the full 10-year analysis from the Joint Committee on Taxation (.pdf)

    In addition to extending tax breaks for racing moguls, the legislation also extended:

    • A tax credit for construction of renewable energy projects, like wind turbines and biomass, geothermal and hydropower generation, for one year. It's projected to cost about $116 million, the committee said.

    That may seem like a drop in the bucket, but here's the kicker: While the extension to qualify for new projects covers only 2013, the actual tax credit itself is good for 10 years. That means new projects that break ground in 2013 will be able to claim the credit for the next decade, at an overall price tag the committee put at slightly less than $12.2 billion.

    • An arcane provision of corporate tax law, called active financing income, that lets U.S. corporations defer taxes on some income they earn from their overseas subsidiaries. That provision will cost the U.S. Treasury more than $9 billion this year and $1.8 billion next year.


    • Tax breaks for Hollywood producers who shoot their movies and TV shows in the U.S., at a cost of about $430 million through 2014.

    • A program that sends most federal taxes collected on rum produced in Puerto Rico and the U.S. Virgin Islands back to those territories to subsidize domestic production. Bar tab: $222 million over two years.

    • A tax break worth about $15 million a year for asparagus growers hit hard by cheap asparagus imported from Peru.

    • $4 million in tax breaks over the next two years for people who buy "2- or 3-wheeled plug-in electric vehicles" — in other words, electric scooters, Segways and the like.

    The purpose of the deal was to prevent a series of steep spending cuts and tax increases on the middle class from automatically taking effect in the new year. But "we're not making it (the tax system) better or fairer," Rep. Darrell Issa, R-Calif., chairman of the Oversight and Government Reform Committee, said on the House floor Tuesday in explaining why he was voting against the measure.

    Big policy losers in tax deal: deficit reduction and 'certainty'

    "We're not getting rid of the NASCAR loophole. We're not getting rid of the electric motor scooter low-speed loophole. We're not getting rid of a whole lot of tax things that are here," Issa said.

    Rep. Debbie Wasserman Schultz, D-Fla., tells Ed Schultz how the Democrats and the White House plan to move forward, with or without House Speaker John Boehner, pictured, as a larger fight over the deficit looms.

    Neither new nor secret
    Although many of the provisions are being characterized as new pork barrel programs that sneaked their way into the bill under cover of darkness, there's nothing new or secret about any of them.

    Most of the tax breaks had been scheduled to expire on Dec. 31, 2011, and as long ago as February, lawmakers were seeking a way to revive them.

    Industries in limbo as Congress mulls expired tax breaks

    Eventually, they were packaged together as the Family and Business Tax Cut Certainty Act of 2012. It was so titled because "people need certainty to plan their finances, and businesses need certainty to hire, invest and grow," as Sen. Max Baucus, D-Mont., chairman of the Finance Committee, said when the committee passed the package in August.

    Once it was out of committee, the measure went nowhere. That is, until this week, when — with a lame-duck Congress just hours away from going home without having addressed the fiscal cliff — it was substituted almost word for word into the deal brokered by Vice President Joe Biden and Senate Republican leader Mitch McConnell of Kentucky.

    It makes up Titles III and IV of the final bill, with many of the alterations reading like this:

    Paragraph (1) of section 7652(f) is amended by striking "January 1, 2012" and inserting "January 1, 2014".

    (If you want to see what changed, here's the Family and Business Tax Cut Certainty Act of 2012 (.pdf) and here are the changes made to it in the final bill (.pdf).)

    Former Sens. Alan Simpson, R-Wyo., left, and Erskine Bowles, D-N.C., co-chairman of President Barack Obama's 2010 deficit commission, said Congress missed a 'magic moment' to reform the tax code.

    By taking the clock down to 00:00 and backing itself into a corner, Congress "missed this magic moment to do something big to reduce the deficit, reform our tax code and fix our entitlement programs," said former Sens. Erskine Bowles, D-N.C., and Alan Simpson, R-Wyo., the co-chairmen of Obama's 2010 commission responsible for finding a way out of the country's economic morass.

    "We have all known for over a year that this fiscal cliff was coming," they said in a joint statement Tuesday, adding: "Yet even after taking the country to the brink of economic disaster, Washington still could not forge a common sense bipartisan consensus on a plan that stabilizes the debt."

    Sen. John McCain, R-Ariz., was less diplomatic.

    "It's so incredibly disappointing that members of Congress saw fit to add hundreds of millions of dollars in special-interest handouts to the recently passed 'fiscal cliff' bill, which had the simple purpose of avoiding massive tax rate increases on average Americans," McCain said Thursday.

    "It's hard to think of anything that could feed the cynicism of the American people more than larding up must-pass emergency legislation with giveaways to special interests and campaign contributors," he said. "And this growing cynicism — largely justified in my view — will make it harder for us to deliver the tough medicine needed to address our crushing national debt."

    Unloved for so long, Congress not fazed by public's disapproval

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  • 'Do something!' Americans fed up with Washington as fiscal-cliff deadline looms

    Americans from across the country express their frustration with lawmakers in Washington who have yet to reach an agreement on averting looming tax increases.

    By Tracy Connor, Staff Writer, NBC News

    Tennessee Sen. Bob Corker said Friday that “the American people should be disgusted” the nation’s leaders haven’t been able to avert the fiscal cliff.

    Well, mission accomplished.

    John Makely / NBC News

    Abigail Holt, 17, (right), of Hartford, Conn., says Washington's inability to avert the fiscal cliff is "annoying."

    Across the country, people are shaking their heads about negotiations that go nowhere and fingers that point everywhere while the nation hurtles toward the precipice of a new economic crisis.

    “They should make a plan, make up their minds and do something!” Abigail Holt of Hartford, Conn., told NBC News.

    She’s 17 years old and admits she’s just learning about the federal government and the fiscal cliff. But she knows this much: “It’s annoying.”

    And that's being polite.

    Writing in the Daily Beast, Howard Kurtz called the nation's capital "the country’s biggest day-care center." The famous sex therapist Dr. Ruth Westheimer hit below the belt, noting on Twitter that "Members of Congress who can't compromise probably aren't good lovers."


    Californian Pat Marshall said the politicians "appear to be very self-centered on making sure that they’re taken care of and the American public comes second."

    After an hourlong meeting Friday with congressional leaders that he described as "constructive," President Obama acknowledged that people outside Washington were bewildered by D.C. "dysfunction" and that time -- and patience -- were running out.

    Lawmakers have 'lost touch'
    Indeed, with higher taxes and deep spending cuts looming without a deal, Americans’ faith in Washington is dissipating by the day.

    A Dec. 9 Gallup poll found that 59 percent thought it was likely the White House and Congress could hammer out a deal to avoid a slide down the cliff; by this week, that had sunk to 50 percent.

    Skeptics were gaining ground, meanwhile: 48 percent think an agreement before the year-end deadline is unlikely, up 10 points from two weeks earlier.

    John Makely / NBC News

    Rich Dodds, 49, of Houston, Texas, says the elected officials in Washington have "lost touch" with Americans who will be affected by the fiscal cliff.

    “It doesn’t feel like they’re doing much,” said Rich Dodds, 49, an energy product manager from Houston, Texas. “I think they’ve lost touch with who the American people are. It’s a pretty elite group in Washington.”

    The fact that both houses of Congress went into recess -- the Senate took a nearly week-long break, and the House is still on vacation until Sunday -- bothered some.

    “This is one of the most important issues and they are not even working,” said Bill Prosser, 49, a telecommunications salesman from Clifton, Va. “I’m very disappointed in them.”

    Nicole Hayward, 28, of Brooklyn, N.Y., was so angered by the congressional recess that she posted a petition on Change.org demanding lawmakers get back to business.

    “I turn on the news every day while I’m getting ready for work and I saw coverage about how Congress was going to break for the holidays and we might not have a resolution,” the marketing director said. “I thought, who cares about their holiday vacation? It really got me going.”

    Hayward got only 101 signatures on her petition. She attributed the lack of interest to cynicism.

    “The reason why the average American doesn’t pay attention to this issue and the details is they think Congress will come together and pass something that just kicks the can down the road and things won’t change in [their] life,” she said.

    John Makely / NBC News

    Bill Prosser, 49, of Clifton, Va., says members of Congress should be locked in a room until they can make a deal.

    Bipartisan blame
    Inside the Beltway, Democrats are condemning Republicans and vice versa for the stalemate. But the nation’s voters are more bipartisan in their blame, with neither Republicans nor Democrats obtaining majority support.

    “Essentially, right now, 25 percent of the public approves of the job the GOP congressional leaders are doing and 40 percent approves of the job the Democratic leaders are doing,” said Jocelyn Kiley, a senior researcher for the Pew Research Center for the People & the Press.

    Prosser thinks there’s a time-tested way to bring the two sides together before Jan. 1 -- something akin to the old papal conclaves in which cardinals were locked in a room until they chose a new pontiff.

    “Just say you’re not going to leave until you have a deal,” Prosser said.  “Get in a room -- and get it done!”

     

  • NBC/WSJ poll: Public wants compromise to avoid fiscal cliff

    President Obama said he's willing to compromise, but it remains to be seen whether or not he will reject House Speaker John Boehner's back-up plan which would prevent tax hikes on those making less than $1 million. NBC's Chuck Todd reports.

    By NBC’s Mark Murray

    An overwhelming majority of Americans want Congress and the Obama White House to reach a deal featuring both tax increases and spending cuts to avert the so-called fiscal cliff, according to the latest national NBC News/Wall Street Journal poll.

    Click here for full results from the NBC News/Wall Street Journal poll (pdf)

    In fact, majorities of Democrats, Republicans and political independents each support such a deal.

    Yet respondents are split over whether any kind of agreement can be reached, and nearly seven in 10 believe that the coming year will feature Democrats and Republicans in Congress showing little willingness to come to an agreement on important matters.

    Democratic pollster Peter D. Hart, who conducted the survey with Republican pollster Bill McInturff, says the public is sending this one-word message to Washington: compromise.

    “Doing something trumps doing nothing,” Hart said.

    Related: Boehner: 'Serious differences' separate GOP from Obama

    The survey – conducted a month after November’s election – also shows a positive uptick in opinion toward President Barack Obama, and more negative views about defeated GOP presidential nominee Mitt Romney and the Republican Party. The poll also finds that a majority of Americans now support gay marriage.

    Fiscal cliff talks have stalled as 'serious differences' remain between both parties – and according to the latest NBC/WSJ poll the public wants an agreement, soon. Although both sides are still discussing ways to avoid the fiscal cliff, neither side is optimistic that they'll come to a resolution before Christmas. NBC's Chuck Todd reports.

    ‘Hints of a thaw’

    According to the poll, a combined 68 percent of Americans say that the fiscal cliff – the looming combination of tax increases and spending cuts set to take place at the beginning of next year if nothing is done – is either a “very serious” or “fairly serious” problem.

    A similar two-thirds of respondents are willing to accept an increase in taxes or cuts in federal government programs they care about to reach an agreement to avoid the problem.

    Asked another way, 65 percent say leaders in Congress should find a compromise to reduce the budget deficit, even if that means Democrats would need to accept targeted spending cuts to Social Security and Medicare, and that Republicans would need to accept targeted increases in tax rates.

    NBC's Mark Murray and Domenico Montanaro discuss the latest developments in the fiscal negotiations between President Obama and House Speaker John Boehner.

    By comparison, just 28 percent believe that leaders should stick to their traditional positions on the deficit – even if that means Congress goes over the fiscal cliff, triggering those automatic spending cuts and tax increases.

    “There are hints of a thaw here, compared to previous data we’ve seen,” McInturff says.

    Indeed, for the first time in the poll, a majority of Republicans (59 percent) want GOP leaders in the House and Senate to make compromises in order to gain consensus in the current budget debate.

    Previously, in 2011, majorities of Republicans said they preferred GOP leaders to stick to their positions rather than make compromises.

    And the percentage of Democrats who favor compromise on this question (70 percent) is now at an all-time high in the survey.

    With Christmas less than two weeks away, the White House is faced with the same key question – Can House Speaker John Boehner deliver enough Republican votes for whatever debt deal he and President Barack Obama agree on. The Daily Rundown's Chuck Todd reports.

    Who’s to blame if there isn’t a deal? Everyone

    Yet the public is split – 48 percent of respondents are optimistic, and 48 percent are pessimistic – over whether Congress will be able to reach consensus to avoid the fiscal cliff. And another 69 percent believe that the next year on Capitol Hill will be marked by division and little willingness to compromise.

    If there is no compromise on the fiscal cliff and the automatic tax increases and spending cuts go into effect at the beginning of next year, 24 percent say they will blame congressional Republicans more, while 19 percent will point the finger at Obama and congressional Democrats.

    But a majority of respondents (56 percent) say they’ll blame both sides equally.

    Still, twice as many Americans say they trust the president more in handling this fiscal situation (38 percent) than House Speaker John Boehner and the congressional Republicans (19 percent).

    And significant majorities believe Obama holds a clear mandate from the election on issues related to this subject:

    • 68 percent say he has a mandate on cutting taxes for families earning less than $250,000 per year
    • 65 percent say he has a mandate on reducing the deficit by both increasing taxes on the wealthy and reducing federal spending
    • And 59 percent say he has a mandate on eliminating the Bush-era tax cuts for household income over $250,000 a year.

    Obama’s lift vs. the GOP’s decline

    Speaking of Obama, the poll shows an uptick in his numbers after his victory in last month’s presidential election.

    Fifty-three percent of adults approve of his overall job performance, and 49 percent approve of his handling of the economy – higher marks on these questions than at any time during the 2012 campaign.

    Another 53 percent say they feel either “optimistic and confident” or “satisfied and hopeful” Obama will do a good job as president, which is up three points from Oct. 2012.

    “Any president has a little bit of a lift heading into the first few months of any new term in office,” McInturff, the GOP pollster, says.

    Thursday's "Gaggle" which includes Jackie Kucinich, Margie Omero, Perry Bacon and Bob Costa talk about the fiscal cliff negotiations.

    But if Obama is getting a lift after the election, the Republican Party is seeing a further decline.

    The GOP’s favorable/unfavorable rating in the poll now stands at 30 percent/45 percent (minus-15 points), which is down from 36 percent/43 percent (minus-7) right before the election.

    That’s compared with the Democratic Party’s 44 percent/35 percent rating (plus-9 points).

    What’s more, asked to give a word or short phrase to describe the Republican Party, 65 percent offered a negative comment, including more than half of Republicans.

    Some of the responses: “Bad,” “weak,” “negative,” “uncompromising,” “need to work together,” “broken,” “disorganized” and “lost.”

    By contrast, 37 percent gave negative descriptions of the Democratic Party, while 35 percent were positive.

    “Republicans have gone off the image cliff,” says Hart, the Democratic pollster.

    “Elections have consequences,” McInturff adds about the GOP. “And among those consequences is the cost of losing.”

    The consequences of losing also exist for Romney, whom Obama defeated in November.

    Romney’s favorable/unfavorable rating in the poll is 35 percent/44 percent (minus-9 points), down from his 43 percent/44 percent score (minus-1) before the election. Much of that drop comes from Republicans and conservatives. 

    Majority supports same-sex marriage

    Finally, for the first time ever in the NBC/WSJ poll, a majority of respondents – 51 percent – support same-sex marriage.

    That percentage in support is up from 30 percent in 2004, 41 percent in 2009 and 49 percent in March 2012, demonstrating how quickly public opinion on this issue has changed in just eight years.

    The NBC/WSJ poll was conducted Dec. 6-9 of 1,000 adults (including 300 cell phone-only respondents), and it has an overall margin of error of plus-minus 3.1 percentage points.

     

  • As cliff looms, both sides position on entitlements

    Aides to House Speaker John Boehner refused to provide details about his face-to-face meeting with President Barack Obama Sunday morning about the fiscal cliff. NBC's Mike Viqueira reports.

    By Carrie Dann, NBC News

    WASHINGTON -- As the days dwindle before the U.S. reaches the fiscal cliff, Republicans and Democrats are jostling for position on long-term fiscal reforms even as they urge an emergency fix to dodge automatic spending cuts and tax hikes before the first of the year.

    "The president wants the [tax] rates to go up. That doesn't solve the problem," House Majority Whip Kevin McCarthy, R-Calif., said on NBC's Meet the Press. "We don't want to be back here in another year, in another ten years, answering the same questions."

    While the public standoff continues between President Barack Obama and House Speaker John Boehner, both sides are staking out their ground for a looming fight over entitlement reform even as some Republicans acknowledge that they may lose the short term debate over tax rates for the highest-income Americans. 

    Sen. Tom Coburn, R-Okla., one of the first Republicans to suggest allowing the president to raise rates on the top two percent of earners, reiterated Sunday that he could support a rate increase as part of a larger deal but accused Democrats of "lying to the American people" about the need for painful entitlement fixes. 

    CNBC's John Harwood says it has become clear that Republicans will give ground on tax hikes for the wealthiest Americans, but the question remains what Obama will give them in return.

    "You can't play the game and hide," he said on ABC's "This Week." "Medicare and Social Security and Medicaid, if those aren't fixed, if we're not honest about how to fix them and the fact that - yes -  everybody in this country will have to participate in some discomfort if we're going to get out of this ... it is dishonest and beneath anybody in Washington." 

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    Coburn - along with Senate colleague Bob Corker, who said Sunday that accepting Obama's tax rate position may be the "best route for [Republicans] to take" -- urged the party to turn to the issues of entitlement reform and spending in the new Congress after the tax fight is resolved. 

    Obama ally and Senate Majority Whip Dick Durbin, D-Ill. said on Meet the Press that reforms to the costly but popular Medicare system will be necessary to put the nation's finances in order but that a measured look at the program is needed rather than a quick fix. 

    "We know that we have to do something, to make sure that we take an approach that doesn't voucherize it or take the approach of the Paul Ryan budget, but keep this a sound program and a solvent program. I just don't think we can do it in a matter of days here before the end of the year," Durbin said. "We need to address that in a thoughtful way through the committee structure after the first of the year." 

    Assistant Majority Leader of the Senate Dick Durbin says the Democrats, President Obama are working hard to avoid going off the fiscal cliff.

    Durbin acknowledged that he supports means testing for Medicare, a sliding scale that would offer fewer benefits for wealthy seniors and boost support for poorer recipients. But he also resisted GOP proposals to raise the retirement age as a way to chop substantial savings out of the costly Medicare price tag. 

    "I listen to Republicans who say 'we can't wait to repeal Obamacare and the insurance exchanges,'" he said, noting that early retirees could face gaps in coverage during years of potentially poor health. "Where does a person turn if they're 65 years of age and the Medicare eligibility age is 67?" 

    McCarthy, who -- along with most of his House Republican colleagues -- wants to keep even the top rates stable, said that public opinion is squarely in the GOP's corner when it comes to addressing the federal government's expenditures. 

    "This is really about spending," he said.  "I don't think Republicans or Americans want to raise any taxes just to continue the spending in Washington. They want it more efficient, more effective, and more accountable."