Here Comes The Cliff

rickcrickc Posts: 9,171 Admiral
It is really what both sides wanted and didn't have the guts to vote on. Real spending cuts, tax raises and deficit reduction.

Could be a good thing.

Congress will be forced to work together and fix the real problems for a change and the republicans don't have to break their pledge to Norquest and raise taxes.


http://www.newstatesman.com/politics/2012/12/wrangle-over-americas-fiscal-cliff-barack-obama-holds-all-cards

In the wrangle over America's Fiscal Cliff, Barack Obama holds all the cards

There is no incentive for the Democrats to be conciliatory on the budget negotiations; nor, after the last few years of partisan bad feeling, will there be much inclination among them to do so.

By Nicky Woolf Published 31 December 2012 10:0

As of now, it looks like the US will go off the so-called “fiscal cliff” tonight at midnight. Several days of extraordinary manoeuvring on and around Capitol Hill in Washington have so far resulted in no deal, and with one day left to galvanise America's behemoth political machinery the chances of one looks slimmer and slimmer.

This means that previously agreed measures (under a deal resolved with a kick-the-can-down-the-road Budgetary Control Act in 2011) will slot into place at midnight, removing a whole raft of tax breaks as well and making sadistically deep cuts to federal spending.

At a glance, it is hard to see why the Republicans are trying to make a deal at all. After all, weren't vicious spending cuts exactly what Romney and Ryan spent an election campaign demanding?

Part of the reason is, however, that the Republicans are afraid of public backlash. A recent Reuters/Ipsos poll found that almost twice as many people blamed the Congressional Republicans for the fiscal cliff than the President; a PEW/Washington Post poll from earlier this month said the same. If the country goes off the cliff, the mid-term elections are going to be very hard on the GOP.

Looked at in detail, going off the cliff looks very unpleasant indeed. Sure, it will cut 607 billion dollars from the national deficit – according to the nonpartisan Congressional Budget Office – but its effects on people directly are brutal. Tax breaks for parents will be halved and the Earned Income Tax Credit will go, affecting low and middle-income workers. A 2% payroll tax break for workers will vanish. Capital gains tax will increase, as well as the tax paid on dividends.

Dramatically, more than 40% of the five million people who have been unemployed for longer than six months will lose their unemployment benefits. There will also be cuts to tax credits for families paying college tuition. High-earning Americans won't escape bracing tax hikes either, especially those who earn more than a million dollars a year.

On top of that, all federal services, from roads to schools to homeland security – with a few exceptions including Medicaid and veterans benefits – face cuts, and perhaps redundancies. The defence budget in particular will be hit very hard, and of course that will have a knock-on effect on the vast number of tertiary industries employed by the Pentagon. All of this, experts agree, will hit the stock market hard, perhaps plunging the country back into recession.

Congress, like schoolchildren, have put off doing their homework until the very last minute, and Senators have been told not to make new years' eve plans. This is going right down to the wire: if a deal is going to be reached, it has to happen today.

It is very possible – almost probable – that America will go over the cliff; but – whisper it – it might not actually be so bad. Many of the harsher of these measures can and almost certainly will be reversed straight out of the gate; and the cuts in federal spending are due to be staggered over the course of the next decade. Obama has already stated that if the country goes off the cliff, then the Senate – controlled by Democrats – would act to pass emergency measures to prevent the loss of unemployment benefits and tax increases on lower-income families. In doing so, he would look like the hero. Certainly, there is no incentive for the Democrats to be conciliatory; nor, after the last few years of partisan bad feeling, will there be much inclination among them to do so.

Politically, Obama is holding most of the cards. The situation is lose-lose for the Republican party. If the country goes off the cliff, the House's Republican Speaker John Boehner and his party will probably be percieved as responsible for it – and are going to be forced into helping the Democrats clean up some of the mess. If it doesn't happen, the President is likely to get the credit. Boehner tried to re-cast this narrative with him as the problem solver with his alternative, the so-called “plan B” - but it was a flop, ridiculed by the Democrats and the media.

Now, he and his Congressional colleagues are scrabbling for anything they can to make the deal palatable to Republicans but still acceptable to the Democrats. They aren't being handed many scraps.

Replies

  • CaptBobBryantCaptBobBryant Posts: 5,716 Officer
    I really have no issue with the Fiscal speed bump...

    I mean this is the deal they made.....if it was a terrible deal....why did they make it in the first place....

    If extending the Tax Cuts was the magic bullet, then instead of a 1 year extension...they should have gone for 10 or permanent.
    If the spending cuts were such a terrible thing....then why woudl it get tied to a debt ceiling bill....

    This is the deal they made and for once we need to see if anyone in DC has a brain in the head.

    The Clinton rates weren't all that bad....now if we could just go back to the Clinton spending.....I mean really do we need $12k per man, woman, and child each year?
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  • Big BatteryBig Battery Posts: 19,252 AG
    Didnt Obama sign this bill into law?
  • SWFL_F1sh0nSWFL_F1sh0n Posts: 17,248 Officer
    Didnt Obama sign this bill into law?

    Which one?
    [SIGPIC][/SIGPIC]
  • CaptBobBryantCaptBobBryant Posts: 5,716 Officer
    Which one?

    Th first one to extend the Tax Cuts and the second one to raise the debt ceiling in exchange for the $1T in spending non-cuts.
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  • rickcrickc Posts: 9,171 Admiral
    here comes the cliff

    Bets anyone

    looks like it is the House of Representatives once again!
  • SuperFlukeSuperFluke Posts: 1,889 Captain
    fiscal-cliff-1.jpg
  • Big BatteryBig Battery Posts: 19,252 AG
    rickc wrote: »
    here comes the cliff

    Bets anyone

    looks like it is the House of Representatives once again!

    Obama Orders Pay Raise For Congress, Federal Workers, Joe Biden

    Yup, Obama is doing everything he possibly can to cut spending.... yup.
  • WaterEngineerWaterEngineer Posts: 24,414 AG
    And he claimed no tax increased on so-called middle class earners.
    Which ever one(s) of you little boys complained about quotes in the signature should be ashamed of yourself. :blowkiss

    Instead of complaining to the moderators you should just quit playing on this board.
  • rickcrickc Posts: 9,171 Admiral
    And he claimed no tax increased on so-called middle class earners.


    yeah and the Republicans will pay for this one in 2 years
  • SWFL_F1sh0nSWFL_F1sh0n Posts: 17,248 Officer
    The Best thing that can happen is Democrats bring forward a bill in the Senate, McConnel filibusters it, we go over the cliff. Tomorrow, Democrats submit a tax cut for 98% of Americans, it passes both houses and GOP loses in 2014.

    As of tomorrow, the Dem's only need 17 republicans to pass anything in the House . . GOP loses.
    [SIGPIC][/SIGPIC]
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