With the Senate getting past a procedural vote in approving the tax deal, it appears more and more likely that this deal will soon become law.

Last week, we reported the good news from the Congressional Budget Office that the Troubled Asset Relief Program (TARP) would cost $25 billion, significantly less than any previous estimates. Now, the Treasury has announced the sale of its remaining Citigroup stock for $10.5 billion, another bit of good news for taxpayers.

Financial markets have reacted to the new tax cut deal between the White House and Congressional leaders which would add some $800-900 billion to our national debt.

In the past two trading days since the deal was announced, we have seen the largest bond sell-off this year and so interest rates have gone up fairly dramatically. So far, yields on the benchmark 10 year Treasury bond have jumped by over 35 basis points (considered a sizeable rise), to the highest point since June. Money has shifted to the stock market, and the dollar is higher.

It appears that President Obama and Republican lawmakers have reached a deal to extend the tax cuts enacted from 2001 to 2003.

CBO has issued new numbers for the total costs of the Troubled Asset Relief Program (TARP). CBO now estimates that TARP will cost $25 billion over the life of the program. This is down $41 billion from CBO's previous estimate of $66 billion in their August 2010 Budget and Economic Outlook, $84 billion less than CBO's March 2010 estimate, and $88 billion less than OMB's most recent analysis (which relies on data up to May 31, 2010).

CBO gives the reasoning as to why the cost estimate has gone down over the past year:

You might have missed it last week if you were preparing to chow down on some turkey, but Our Fiscal Security (OFS)--a joint project of the Economic Policy Institute, Demos, and the Century Foundation--became another in a long list of groups/experts to put out a specific proposal for our long-term fiscal situation.

In an op-ed in the Financial Times today, Senator Mark Warner (D-VA) discussed tax breaks for the wealthy, an issue on everyone’s minds in the wake of the debt commission’s release and Congress's looming to do list.

Noted economist Brad DeLong is asking: where are the technocrats of the center? In a recent blog post, he laments the lack of a concrete plan among more centrist technocrats to get the economy going in the near-term while, at the same time leaving it better off in the long-run. He outlined a seven-point plan to accomplish this goal:

As widely expected (and priced into the markets), the Fed decided at its monetary policy committee meeting today that it would increase purchases of Treasury securities to boost the weak economy.

Bob Rubin, former Clinton Treasury Secretary, had an opinion piece in the Financial Times on Monday that made a lot of points we certainly agree with. Some of his major points (emphasis ours):