Was the Tax Deal Partly About START?

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A few weeks ago the White House ponied up $4 billion in new spending to modernize the US nuclear complex at the insistence of Arizona Republican Senator Jon Kyl, who has been holding up Obama’s New START nuclear arms reduction treaty with Moscow. Democrats understood Kyl to have promised that he would support the treaty in return for the money–and, given that the rest of the Senate GOP has been following Kyl’s lead on the issue, that it would be enough to win START’s passage. But Kyl said he still wasn’t satisfied.

Now comes the new tax cut deal between the White House and the GOP, which contains an unexpected compromise on the estate tax, which will be adjusted to a level next year that is closer to the Republican position than the Democratic one. Ezra Klein calls this “an ugly surprise,” one that will cost $10 billion more than returning the estate tax (which had a quirky one-year sunset in 2010) to its 2009 level. Under the new deal, the estate tax will be set at 35% percent, with an exemption for up to $5 million of inheritance. Which just happens to be the very plan that a certain Republican Senator from Arizona, who cares a lot about the estate tax, has been pushing for many months.

Now let’s watch to see whether, in the wake of this budget compromise, Kyl is willing to stop stopping START. If so, we may have a clue about how this particular sausage was made. (No offense!) It may be that Kyl has charged Obama $14 billion to make it happen.