Rasmus says further tax breaks are coming at a time corporations pay the lowest effective rates in over 25 years. Corporate taxes in the past two years as a percent of profits averaged about 12.4%.
From 1989 - 2007, they averaged 24.7%. Corporations hoarded over $2.5 trillion in cash. With that amount and record low taxes, what justifies cutting more?
It's coming anyway at the public's expense. What's ahead includes deep cuts in Medicare, Medicare, Medicaid, Social Security, Education, Veterans benefits, postal services, unemployment insurance, food stamps, and other social safety net programs.
The tax base will be broadened. It's coming through cutting mortgage deductions and other exemptions.
Middle and lower income households will be hard hit. The top personal tax rate will be marginally raised. So will the threshold to reach it. Taxes on upper income groups will be increased incrementally over decades.
Agreed on defense cuts will be mostly or entirely suspended. Veterans can expect benefit reductions. Agreement is close on next year's defense authorization. Expect it to exceed FY 2012.
When Congress addresses FY 2014, agreed spending will likely hit record highs. America already spends more on "defense" than all other countries combined. It comes at a time no enemies exist except ones Washington invents.
Rasmus believes the "mix of spending cuts to tax hikes will be no less than 6 to 1." Every dollar more in taxes will be offset by $6 in cuts. Simpson-Bowles called for four to one.
In June 2011, Biden offered Boehner 87% in cuts for closing 13% of tax loopholes.
Expect something agreed by yearend or early next year. Continuing resolution hokum can delay what's agreed and when implemented.
Cuts will be largely backloaded. Small ones may occur next year. Others will begin taking effect incrementally in 2014 or 2015. Annually they'll increase.
Whatever is agreed on will be austerity, not stimulus when it's badly needed. At issue is how much pain, how quickly and when.
Rasmus expects something finalized by end of February or sooner. Households most in need will be hurt most. So will middle-income earners.
Whatever the final deal, its economic effect will be negative. Cuts come at a time of global weakness. Europe and Japan face recessions. America's economy is fragile. The knock-on effect severity remains to be seen.
Stephen Lendman lives in Chicago and can be reached at Email address removed .
His new book is titled "Banker Occupation: Waging Financial War on Humanity."