Reuters - California Governor Jerry Brown and Democratic legislative leaders have reached a deal that bypasses Republicans and relies on higher tax revenue forecasts and some spending cuts to close a $10 billion gap.
In a long-overdue moment, governor Jerry Brown has finally admitted the obvious, the state's pension system is broke and California Has "Lived Beyond Our Means". Unions of course are howling at that obvious admission.
California, like Greece is perpetually in fiscal trouble. Overoptimistic revenue forecasts coupled with spending $2 billion more than expected has California in a deep hole. Governor Jerry Brown has the same non-solution as ever, hike taxes.
Brown wants a "temporary" (as in seven years) tax hike. Given we all know there are no such things as temporary tax hikes in California (seven years is permanent enough in the first place), and also given the California school budget needs an axe, the I say let him.
The Democrats made several key concessions yesterday in the Fiscal Cliff negotiations. As a result, the two sides are absurdly close together. If we don't get a deal at this point, the entire country will be justified in being outraged.
S&P 500 futures are up 24 points (1.7%) and gold is up $22 (1.3%) on news McConnell-Biden Said Close to Deal Except for Sequester
The White House and congressional negotiators have agreed to contours of a deal to avert the fiscal cliff including tax cut extensions, with the remaining sticking point being how to handle automatic military and domestic cuts, according to an official familiar with the talks.