Pelosi: Obama Should Raise Debt Ceiling Unilaterally

breitbart

This morning on CBS’ Face the Nation, House Minority Leader Nancy Pelosi (D-CA) blithely announced that if she were President Obama, she would simply invoke the 14^th Amendment to the Constitution and unilaterally raise the debt ceiling:

Well, you ask the Republicans, because we always passed the debt ceiling. When President Bush was president, as he was incurring these massive debts, and the Republicans weren't saying 'boo' at the time. There should be, this is a conversation where there should be no doubt. In fact, if I were president, I'd use the 14th Amendment, which says that the debt of the United States will always be paid.

Just in case Americans missed it, Pelosi left no room for doubt. When host Bob Schieffer asked, “You would just go ahead and do it, you wouldn’t wait for Congress?” she answered, “I would just go do it.”

There is no legal argument that the 14^th Amendment allows the President to ignore Congress’ power of the purse strings on incurring debt. The relevant text reads:

The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions and bounties for services in suppressing insurrection or rebellion, shall not be questioned. But neither the United States nor any State shall assume or pay any debt or obligation incurred in aid of insurrection or rebellion against the United States, or any claim for the loss or emancipation of any slave; but all such debts, obligations and claims shall be held illegal and void.

The text of this amendment is clear: no law can be passed which questions the validity of the public debt. But, of course, the debt ceiling does not do that. It merely prevents the government from borrowing more money to pay that debt. Government still carries the debt, and still has to pay it. It just can’t take out a second credit card to do so if the debt ceiling is not increased. (Incidentally, the purpose of the amendment was to prevent Southern states from voting to negate debts incurred by the Union in waging the Civil War against the Confederacy.)

This is even a bridge too far for the Obama administration, which says that the 14^th Amendment does not “give the president the power to ignore the debt ceiling – period,” according to White House spokesperson Jay Carney. But Democrat dreams of executive branch tyranny under Obama continue. And why not? So far, Obama hasn’t been disinclined to ignore the Constitution.

The View from the Bottom of a Fiscal Abyss

Doug Patton

thelastdaysbulletin.blogspot.com

Forty-one dollars in tax increases for every one dollar in spending cuts. That’s the shrewd deal Speaker of the House John Boehner negotiated with President Barack Obama. Obama, Boehner and other congressional leaders have known for a year and a half that these automatic tax increases and so-called spending cuts — also known as the fiscal cliff, or sequestration — were coming, and yet they did nothing. In fact, Obama seemed to gleefully taunt Republicans after his re-election in November, as though he wanted to go over “the cliff.” He taunts them still, and it will get worse.

Of course, the dolts who returned him to office see nothing wrong with penalizing the most productive people in our society in order to give them (the dolts) more free stuff. The indoctrination they have received in our government schools has taught them that even if two plus two equals four, it doesn’t matter because somehow the geniuses who represent us in Washington can make it equal seven.

Apparently, Obama was so exhausted from those two speeches he gave this week that he had to resume his multi-million dollar vacation the next morning. In fact, it was so important that he get back to Hawaii, the president left town without even signing the bill he had told us was so crucial to save us from economic Armageddon.

Before leaving, however, he informed the country that he will entertain no further debates — with Congress or anyone else, apparently — about how much of our great-grandchildren’s money he is spending. This is just a preview of the arrogance that will be on full display during his second term.

It is an inane joke to even talk about spending cuts in Washington. The last president to prevail upon Congress to actually cut government spending was Calvin Coolidge in the roaring twenties (hint: that’s why they roared). Today, what passes for a “cut” is actually nothing but a smaller increase in what they planned to spend.

Imagine a family that made $100,000 in 2012 but spent $150,000, putting the difference on a credit card. Their plan for 2013 (while still earning $100,000, mind you) was to spend $300,000. However, on New Year’s Eve, they decide to be “responsible” and only spend $250,000. In Washington, D.C., instead of a $100,000 increase in spending, this would be called a $50,000 cut.

Of course, in Barack Obama’s world, members of our hypothetical family would be forced to change their lifestyles to accommodate the government. The stay-at-home mom would have to go to work in order to pay for the increased costs of gasoline, food, clothing, housing, insurance, health care, and everything else the family needs to survive. And that, of course, when added together with what could be found in the children’s piggy bank, would reclassify the family as “rich,” which would necessitate an additional tax penalty in order to make them pay their “fair share.”

There is now talk of a challenge to Boehner for the position of Speaker. Do you think it will make a difference? Would House Majority leader Eric Cantor be a better negotiator? Would he be able to stop this spending spree? In the United States Senate — run by Democrats — they have not even passed a budget during Obama’s entire first term.

In a matter of weeks, this temporary New Year’s Eve fix will culminate in exactly the debate Obama claims he simply will not have, the one over raising the debt limit another two trillion dollars — that’s a two with twelve zeros behind it — which will not even fund this out-of-control government for six months.

This is not a fiscal cliff. This is fiscal insanity. It is a fiscal abyss, and we are about witness the view from amidst the rubble at the bottom of it.

The editors review 2012: Economics

EconomistMagazine

Fiscal Heroes and Zeroes

huffingtonpost.ca

Jan. 2, 2013, Fairfax, VA—Americans for Limited Government, a non-partisan group dedicated to limiting the size and scope of government at all levels, blasted members of Congress who voted in favor of the tax increase measure that passed both the Senate and House of Representatives on New Year's Day.

Bill Wilson, president of the group denounced the law saying, "This so-called 'deal' is typical Washington, D.C., laden with pork including a subsidy for Obama's Hollywood buddies and even NASCAR, while increasing taxes on every working American. Incredibly the law will be classified as a tax cut because it passed after the Bush tax cuts expired, so in D.C. doublespeak, politicians will claim to have cut taxes when everyone's taxes are actually going up."

An initial analysis of the legislation utilizing estimates from the Joint Committee on Taxation conducted by ALG showed that while the tax increases on those making more than $400,000 a year will generate approximately $30 billion in revenues a year, the cost of servicing the projected increased federal debt of $1.2 trillion will actually eat away about 88 cents of every new dollar raised.

"By avoiding actually dealing with Washington's spending addiction, they have raised taxes to do little more than pay the increased interest on the debt over the next year. Meanwhile, the head-in-the-sand types on Capitol Hill will be clamoring to spend this 'new money' on their favored special interests. We are truly through the looking glass."

View online here: http://getliberty.org/fiscal-heroes-and-zeroes/ >>

Norquist: Cliff Deal ‘Technically’ a Tax Cut

Newsmax

dailymail.co.uk

By Stephen Feller/

Americans for Tax Reform founder Grover Norquist said in an interview Tuesday that the fiscal cliff deal to keep most Americans’ taxes from increasing is “technically” a tax cut and does not violate the anti-tax increase pledge most Republicans in Congress have signed.

Norquist also told CNN's Anderson Cooper that when budget cuts to replace the blanket sequester of the cliff are discussed during the first two months of the year that there is room in the Pentagon budget to increase efficiency and cut waste.

“It’s technically not a violation of the pledge,” he said, adding “but I understand why a lot of Republicans said, ‘look, even though what’s happening is the tax cuts disappear, we’re restoring them for most people. So we’re not raising taxes, we’re actually cutting taxes.’”

Most Republicans in Congress have signed the pledge to voters not to raise taxes during their first campaigns for office, and it is seen as a significant promise to their constituents which they work to keep at every turn.

“They need to be able to say with a straight face that they fought to protect those tax cuts for everybody, and all the Republicans in the House have done that more than once,” Norquist said. “They’re fighting to oppose any and all tax increases.”

With a deal on the cuts reached, Norquist said that when Congress begins to look at the budget, they need to look at everything — including the sprawling Pentagon section which takes up a large portion of it.

He said that while the country must have a strong military to “make sure nobody can throw a punch at us successfully,” there are things to look at. Pensions and decisions on contracting are two significant ones, he said.

“Serious conservatives need to declare that they, that taxpayers, are looking at the entire budget and saying, ‘where can we be more efficient and more effective?’ We have a rather large Pentagon budget, larger than most of the other countries in the world that have armies, navies, and air forces combined,” Norquist said.

“Part of a strong America is to not have this massive spending that we’ve been having.”

Norquist said that the reason compromise on the cliff has been so difficult is because the Democratic and Republican parties are looking to move in opposite directions. “If somebody wants to go east, and somebody wants to go west, what would a compromise be? I’m in favor of compromising in the direction of liberty,” he said.

“The Democrats have an expansive view of the role of government,” he said. “They want higher taxes in order to spend more money. The Republicans want lower taxes and spending less money... We had a compromise in 2011. Republicans wanted to cut spending by $6 trillion — the Ryan plan — and we agreed to $2.5 trillion in spending cuts. That was a compromise.”

“We wanted more spending [cuts], we got less, because Obama wouldn’t support more spending reduction. So, you can have compromise in the direction of liberty, but raising taxes and spending more money, which is what Obama wants to do, is moving away from liberty. That’s not compromising for the American people. That’s losing.”

Read Latest Breaking News from Newsmax.com http://www.newsmax.com/newswidget/Norquist-deal-tax-cut/2013/01/01/id/469689?promo_code=10E2C-1&utm_source=&utm_medium=nmwidget&utm_campaign=widgetphase1#ixzz2GpkrJej2

Financial crisis: Let the REAL Games Begin

Judi McLeod

On the first back-to-business day after Christmas and New Year holidays, the stage, long lorded over by Barack Hussein Obama, is suddenly empty.

If the Fiscal Cliff had been a television show, it would have beat “American Idol”  in ratings, if only because it played out to a captive audience.  All during the holidays, you couldn’t miss the White Noise about the impending Fiscal Cliff.

For any who bothered to look down at the cliff’s bottom, a bleeding vulnerable America had been there all along, in fact way before the Fiscal Cliff loomed up on the public horizon.  Yet the Obama-created theme of the Fiscal Cliff was would the Republicans force America over.

Would weepy House Speaker John Boehner cave?  Would Republicans band together with TEA Party newbies and save the day?

As rich in drama as anything from Orson Welles, It all ended in a closed-door meeting, at 10:45 p.m., on a holiday—in a 257-167 vote, the end of New Year’s Day 2013 to plebes, the grand finale to a long running play for politicians of all stripes.

The morning-after empty stage is the giveaway of a well staged drama forced on the population for months. Leading Shakespearian thespian Barack Hussein Obama, whose main mantra has been ‘Eat the Rich’,  has not only left the building but the continent spending $7 million from the public purse to resume his holidays in Hawaii.

His phony conquering hero return to wintry Washington DC from the land of the sun and surf to lead the way on the Fiscal Cliff drama was the starring role of the long-running show.

Congress—including newly-elected TEA Party types—have become the new Reality TV show, that forced in hundreds of millions of Americans who want their country run with more accountability, as the hapless bit players.

Today the Marxist cunning but intrinsically lazy Obama returns as the conquering hero to Michelle Obama, Valerie Jarrett and their dozens of on-the-take hangers on in Hawaii.  For sure, he won’t be admitting that after all the showmanship essentially twice as many Conservative Republicans outnumbered the RINOS (Republicans in Name Only) who voted with the Democrats against what just happened, or that it required conducting the business of a nation on a statutory holiday.

In Hawaii, Valerie and the Obamas are essentially preaching to an already converted choir and now playing to an empty stage.

Here’s a cabal getting rich by ostensibly killing off the rich to quell the envious who returned them to political power. Obama seeks the approval of Michelle and Valerie, while half of the American voting population patently ignore them.

No deafening applause drowns out the White Noise of last night’s late-hour act.  Those with free Obama cell phones were yakking it up with family and friends, free stuff and not the politics that brought it into their lives being primary on their minds.

The Saul Alinsky drawn up enemy is supposed to register shock followed by deep depression.  But BHO hightailing it back to Hawaii is Act 3.  Between golf and naps, he will be working out the details of the most costly inauguration party in American history.

If hotels are reporting the public’s lack of booking interest, the regime can always count on Hollywood celebrities to fill empty seats.

Here is how it’s supposed to work:  You awaken to the frozen tundra on January 2 barely getting the garbage out to the curb before the truck rolls by.

Now that you’re fully awake, you must deal with the worry of whether the retailer for whom you work made it through this year’s anemic Christmas sales while Obama gets in another round of golf before taking another nap.

Make way for the doomsayers who will fill the airwaves and the Internet with dire warnings like, “They’re coming to take your guns”; “You will lose your Granny to Obama’s death panels.”

Keep reading on canadafreepress >>

Financial cliff deal and Common sense

Here is a good way to look at this:

bbc.co.uk

US budget debts/ceilings Succinctly explained..
This puts things into a much better perspective. J
Lesson # 1:
* U.S. Tax revenue: $2,170,000,000,000
* Fed budget: $3,820,000,000,000
* New debt: $ 1,650,000,000,000
* National debt: $14,271,000,000,000
* Recent budget cuts: $ 38,500,000,000
Let's now remove 8 zeros and pretend it's a household budget:
* Annual family income: $21,700
* Money the family spent: $38,200
* New debt on the credit card: $16,500
* Outstanding balance on the credit card: $142,710
* Total budget cuts so far: $38.50
Got It ?
OK now......
Lesson # 2:
Here's another way to look at the Debt Ceiling:
Let's say, You come home from work and find
there has been a sewer backup in your
neighborhood....
and your home has sewage all the way up to
your ceilings.
What do you think you should do ......
Raise the ceilings, or remove the sh!t?

Fiscal Cliff Showdown Postponed to March

Frontpagemag

Matthew Vadum

With a cocky President Obama no doubt grinning from ear-to-ear, federal lawmakers yesterday gave their blessing to legislation that boosts income tax rates and government spending while kicking many of the “fiscal cliff” issues down the road for several weeks.

The $1.2 trillion in scheduled spending cuts –falling largely on the Pentagon– have now been officially postponed for two months. The next manufactured crisis comes March 1, the day the cuts will take effect unless Congress intervenes again to stop them.

Putting off dire problems for another day is now becoming routine in Washington, D.C., commentator Jim Antle opined on Twitter. “We have reached the point where temporarily averting self-inflicted disasters at the last second is a political success.”

The Obama-approved fiscal-disaster procrastination bill received final congressional approval in the House last night with relatively little Republican support after a prolonged fight during a long lame duck session of the outgoing Congress. Obama and Democrats got almost everything they wanted, as many Republicans dropped their long-standing opposition to income tax rate increases. Now Obama comes across to many low-information voters as a kind of champion of the middle class, and Republicans, whom the media would have painted as villains no matter what the fiscal cliff outcome, look like stubborn obstructionists who had to be forced to do the supposedly right thing.

By insisting on tax hikes only for the wealthy, President Obama skillfully played Republicans off against each other, launching what some are now calling a civil war within the Grand Old Party. Republicans were afraid of being blamed by the public for allowing taxes to rise if Bush-era tax rates, which expired Dec. 31, were not extended, so they held their noses and gave Obama largely what he wanted.

Charles Krauthammer called the measure a “complete rout for Democrats.” Many House conservatives “hate the bill for good reason … This is a complete surrender on everything.”

Bill Kristol called the bill a mess that was “ridiculous in too many ways to count” but urged House Republicans to vote for it anyway to get the issue behind them. “The two month delay of the sequester [i.e. spending cuts] will make actual governance even more difficult (how is the Pentagon supposed to plan for the rest of the year?) … And we will face another cliff when we hit the debt ceiling and the sequester again in two months.”

The stage is now set for the approaching battle over out-of-control federal spending. The bill passed Congress hours after the U.S. government bumped up against the limit on federal borrowing. In theory the government could default on its debts two months from now if the debt ceiling is not raised further.

The national debt is now about $16.4 trillion, up from $10.6 trillion on Inauguration Day 2009. But that $16.4 trillion figure is misleading. Government accounting tricks keep another $86.8 trillion in unfunded liabilities related to Medicare, Social Security, and federal employees’ future retirement benefits off the books and out of the public eye. The two figures added together produce the unimaginably large sum of $103 trillion. The U.S. government’s bond rating has been downgraded already and many more downgrades are on the horizon.

It is worth noting that the bill passed last night only because House Democrats supported it.

The measure was approved in a House vote of 257 to 167 after GOP leaders decided not to insist on government spending cuts. Speaker John Boehner (R-Ohio) and Budget Committee chairman Paul Ryan (R-Wisc.) voted for the package, breaking with House Majority Leader Eric Cantor (R-Va.) and Majority Whip Kevin McCarthy (R-Calif.) who voted against it.

In total 85 Republicans voted for the bill and 151 voted no. On the Democratic side there were 172 votes in favor and 16 against.

After going against most of the House Republican conference on such a critical matter, Boehner’s speakership may be in jeopardy. Some conservatives are pressing GOP lawmakers not to reelect Boehner as Speaker when the new 113th Congress convenes on January 3.

American Majority Action spokesman Ron Meyer told Breitbart News late yesterday that enough House Republicans have come together together in an effort to take Boehner’s gavel away. To be considered elected, a candidate for Speaker must receive a majority of the votes.

“At least 20 House Republican members have gotten together, discussed this and want to unseat Speaker Boehner–and are willing to do what it takes to do it,” Meyer said. “That’s more than enough to get the job done, but the one problem these guys face is they need a leader to coalesce behind.” Early discussion on a possible Boehner challenger has centered on House Majority Leader Cantor.

Before the House took action late yesterday, at 1:39 a.m. the Senate approved the bill by a vote of 89 to 8. The only Republicans to vote against the measure were Charles Grassley (Iowa), Mike Lee (Utah), Rand Paul (Kentucky), Marco Rubio (Florida), and Richard Shelby (Alabama). (Jim DeMint of South Carolina and Mark Kirk of Illinois didn’t vote.)

Rubio said he couldn’t vote for the bill because he “wanted to be part of solving the long-term problems this country faces. Time and again, we’re given choices here that don’t involve that.”

“The real fiscal cliff is still there,” he said. “We’ll be back here again. In March, we’ll have a showdown like this all over again.”

Many Tea Party-backed Republicans opposed the legislation because it raises taxes without reducing government spending. According to an analysis by Joseph Henchman of the Tax Foundation, the bill raises taxes by $620 billion tax increase while cutting expenditures by a paltry $15 billion. That’s a ratio of $41 in tax increases for every $1 in savings.

While the legislation preserves the lower-income tax brackets from the Bush era permanently, it raises tax rates for joint filers earning $450,000 or more, phases out exemptions for high earners and limits the personal exemptions and itemized deductions they can claim. It also raises payroll taxes for all and discourages investment by raising the capital gains tax and dividends tax for high earners.

On the positive side, the legislation approved by Congress repeals the CLASS Act, a huge unfunded mandate promoted by the late Sen. Ted Kennedy (D-Mass.) that was part of Obamacare. The Community Living Assistance Services and Supports Act would have created a new national long-term care insurance system.

Quite apart from the fiscal cliff, yesterday Americans were hit with $1 trillion in new taxes to be fully phased in through 2022 to support the president’s unpopular health care reforms.

Among the new job-killing Obamacare-related levies effective January 1 were: an excise tax on gross sales by medical device makers; a  surtax on investment income for households earning at least $250,000; and an increase in the Medicare payroll tax for married couples earning more than $250,000.

Many more tax increases are likely headed our way in President Obama’s second term in office.

Fiscal cliff deal: House OKs proposal despite GOP objections

Visit NBCNews.com for breaking news, world news, and news about the economy

Visit NBCNews.com for breaking news, world news, and news about the economy

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Was the US fiscal cliff manufactured or a real crisis?

aljazeera

Read >>

The Truth About The Fiscal Cliff In Simple Terms

NoisyRoom
By: AJ

FISCAL CLIFF, OH NOES!!

Many either don’t know what the “fiscal cliff” is, or believe this problem is something that it’s not.

Although America ’s economic crisis is not rocket science, the media and politicians have done a good job of keeping the truth hidden so that our focus isn’t on the real problem. After all, if we, the people, understood the real problem, we would demand that they fix it and we are smart enough to know the real fix that’s needed.

To prevent this from happening, politicians and media conjured up this catchy phrase called “the fiscal cliff.” Then they established a narrative that gave us a false target to blame – the so-called “rich.”

In other words, keeping the people’s attention on class warfare directs our anger and rhetoric onto the false target they’ve fed us and off of ‘what’ and ‘who’ created the problem in the first place. This distracts us from formulating and voicing the real solution to the true problem.

So, what is the real problem that created this crisis?

In a nut shell, our elected politicians have continued to spend trillions more in the past four years than taxpayers have given them. Thus, they have brought America ’s economy to the point of near collapse. It’s that simple.

Three of the broader consequences of what they’ve done are:

• For the first time in the history of our nation, America ’s credit rating has been downgraded – twice.
• Our national debt now exceeds its yearly gross domestic product (GDP).
• The value of the dollar continues to decline, which makes prices rise on the things we need and want (i.e. inflation).

Right now on Capitol Hill, politicians claim to have a deal in the works whereby they will:

“…raise the tax rates on family income over $450,000 and individual income over $400,000 from 35 percent to 39.6 percent, the same level as under former President Bill Clinton. Also, estates would be taxed at 40 percent after the first $5 million for an individual and $10 million for a couple, up from 35 percent to 40 percent. Unemployment benefits would be extended for one year.”

While politicians and media are in lock-step focusing everyone’s attention on whom the government can take more money from, who realizes that this simply allows the politicians to continue to spend trillions more at our expense?

Taking more money from the people will result in less growth of the economy, which leads to greater loss of jobs, which leads to increasing the number of people plunged into poverty.

For those buying into the class warfare narrative, know that you are supporting your own demise. How so? The trickle down effect most people don’t realize is that, whether you’re a car mechanic, a retailer, a construction worker, a car dealership, a waiter, a grocery store cashier, etc., these businesses are negatively impacted when customers have less money to spend; therefore, employers will have less income with which to pay employees. Jobs will be eliminated and some businesses will have to shut down altogether.

It’s not rocket science, it is economic reality.

So let’s cut through the political spin, false narratives and diversions and give you the simple truth about the economic crisis and the real solution, which can be found in a “real world” example of what people have to do when they’ve created this same kind of financial mess for themselves.

This might be a helpful way to explain it to family and friends who aren’t aware.

We already know that when a person, family or business continues to spend a lot more than they take in, eventually they find themselves in pretty serious financial trouble. Why? Because they’ve amassed an unsustainable amount of debt that they cannot realistically repay. (Same goes for a country, and that’s exactly what our politicians have done.)

Think of a family that takes home $50,000 a year. If they spend 25% more than they take in each year (say they’re spending $62,500 each year even though they only bring home $50,000 a year), after four years, they’ve accumulated $50,000 in new debt, plus interest, which they owe to creditors.

What happens to this family? Interest on the debt continues to accrue, their FICO score (credit rating) declines and their creditors warn that action will be taken against them to recover what is owed.

The family now has to solve the financial mess they created for themselves.

If they’re serious about solving the problem, what’s one of the first things they have to do? Cut spending.

In addition to cutting their spending down to what they take in ($50K/year), they’ll cut even more spending so they can begin to pay off the debt and interest they racked up.

In most cases, when creditors start receiving regular monthly payments on the debt, things will stabilize as long as the family continues to pay. It becomes apparent to creditors that the family has created a budget that reduces spending and frees up money to start paying down their debt.

When we look at the typical things this family will cut, first to go are luxury purchases, trips, gifts, costly entertainment/hobbies, sending money overseas… basically, non-essentials that they couldn’t afford to be spending on in the first place. Next might be things like having meals at home instead of eating out at restaurants, sack lunches for the kids instead of the daily school cafeteria expense, trading in the fancier car for one that’s half the cost, driving less, using less in utilities, etc.

If that’s not enough, they may start selling non-essential possessions/assets to raise more cash to pay toward their debt. Taking on another job would be good, but in this Obama-economy it’s probably not a realistic possibility. Some families may even need to downsize their residence; move to a two-bedroom apartment instead of maintaining the cost of the four-bedroom home they’ve been renting.

Bottom line is the family has to cut their spending “with a chainsaw,” as Jim Roger’s said when referring to what the government needs to do to solve the financial mess they created for our country.

But politicians refuse to cut spending. They want to continue spending trillions more than they take from us each year.

What is their solution?

• Create a faux fight over how much MORE they will take from us so they can keep over-spending.
• Keep spinning it as class warfare to give us a false ‘target’ to blame.
• Keep us fighting among ourselves as we get behind one of the political party’s ‘plans’ (so that we’re actually rooting for their solutions to take MORE from hard-working taxpayers).
• Divert our attention away from the real problem and the politicians who actually created the problem.
• Remain blind to the fact that politicians want to perpetuate the problem, not solve it.

Insidiously brilliant, isn’t it? It is masterful propaganda and it’s what they always do.

Investopedia explains what will happen if politicians don’t act, but don’t forget that all the ‘expirations,’ sequestration and triggers were put in place/enacted by them.

“If Congress and President Obama do not act to avert this perfect storm of legislative changes, America will, in the media’s terms, “fall over the cliff.” Among other things, it will mean a tax increase the size of which has not been seen by Americans in 60 years.”

So you see, it is our elected politicians who set the stage for this crisis in order to dupe the American people and carry out the political theater now on display so they can get away with taking more from taxpayers, continue the massive over-spending and avert the possibility of torches and pitchforks outside the Capitol.

When these politicians conclude this round of theater, American’s will unwittingly breathe a sigh of relief that they reached a ‘deal’ and saved us.

In reality, the cold hard truth is that we, the taxpayers, continue to serve at the feet of these politicians. As long as they can take more from us – and they surely can – that’s exactly what they’ll continue to do until we have no more for them to take.

The truth about the fiscal cliff, in simple terms, is that the President and Congress deliberately created the economic crisis our country faces. Their massive spending is intentional and, clearly, it hasn’t helped us; it has hurt us. Their intention all along was to continue to take more and more from the people, thereby increasing their power and wealth – and extinguishing ours. How better to expand the ranks of the poor, further de-industrialize America and destroy, from within, a once-great and prosperous nation?

After all, isn’t that what the Progressives’ hundred-year journey to institute “social justice” in America, from both sides of the aisle, has been all about? Of course it has.

Tyranny comes when the people of a nation can no longer do what they did when they were free. Are we there yet?

Details of Tentative Deal

 

foxnews

WASHINGTON –  Highlights of a tentative agreement Monday between the White House and Senate Minority Leader Mitch McConnell, R-Ky., aimed at averting wide tax increases and budget cuts scheduled to take effect in the new year. The measure would raise taxes by about $600 billion over 10 years compared with tax policies that expire at midnight Monday. It would also delay for two months across-the-board spending cuts otherwise set to begin slashing the budgets of the Pentagon and numerous domestic agencies.
   Highlights include:
   --Income tax rates: Extends decade-old tax cuts on incomes up to $400,000 for individuals, $450,000 for couples. Earnings above those amounts would be taxed at a rate of 39.6 percent, up from the current 35 percent. Extends Clinton-era caps on itemized deductions and the phase-out of the personal exemption for individuals making more than $250,000 and couples earning more than $300,000.
   --Estate tax: Estates would be taxed at a top rate of 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35 percent.
   --Capital gains, dividends: Taxes on capital gains and dividend income exceeding $400,000 for individuals and $450,000 for families would increase from 15 percent to 20 percent.
   --Alternative minimum tax: Permanently addresses the alternative minimum tax and indexes it for inflation to prevent nearly 30 million middle- and upper-middle income taxpayers from being hit with higher tax bills averaging almost $3,000. The tax was originally designed to ensure that the wealthy did not avoid owing taxes by using loopholes.
   --Other tax changes: Extends for five years Obama-sought expansions of the child tax credit, earned income tax credit, and an up to $2,500 tax credit for college tuition. Also extends for one year accelerated "bonus" depreciation of business investments in new property and equipment, a tax credit for research and development costs and a tax credit for renewable energy such as wind-generated electricity.
   --Unemployment benefits: Extends jobless benefits for the long-term unemployed for one year.
   --Cuts in Medicare reimbursements to doctors: Blocks a 27 percent cut in Medicare payments to doctors for one year. The cut is the product of an obsolete 1997 budget formula.
   --Social Security payroll tax cut: Allows a 2 percentage point cut in the payroll tax first enacted two years ago to lapse, which restores the payroll tax to 6.2 percent.
   --Across-the-board cuts: Delays for two months $109 billion worth of across-the-board spending cuts set to start striking the Pentagon and domestic agencies this week. Cost of $24 billion is divided between spending cuts and new revenues from rules changes on converting traditional individual retirement accounts into Roth IRAs.

Read more: http://www.foxnews.com/politics/2013/01/01/details-tentative-deal-that-would-avert-fiscal-crisis/#ixzz2Gl5FAXwt

Republican House leaders voice serious concerns over fiscal bill

Foxnews

Washington –  House Republican leaders voiced serious concern Tuesday afternoon about the Senate's just-passed fiscal crisis bill during a closed door meeting with rank-and-file lawmakers, sources told Fox News. The response raised questions about how the House would handle the deal, which was highly touted by bipartisan officials in the Senate just hours earlier.
Doubts that the GOP-controlled House would pass the plan intensified Tuesday afternoon. Lawmakers have just two days to go before a new Congress convenes which limits the House’s options. The House can reject the plan, pass it as written by the Senate – which is unlikely given strong GOP opposition – or amend it. If the House amends it, the legislation goes back to the Senate where time constraints would likely kill it for the current Congressional session.
GOP lawmakers privately met midday Tuesday to gauge support for the accord. While Republican lawmakers expressed concern about the plan they did not directly speak out against it. Instead, Fox News has learned that House Speaker John Boehner held a venting session where members of his party voiced their concern about the legislation. Members also offered up options on what they’d like to see added in or taken out of the bill.
As Boehner listened to Republicans, Vice President Joe Biden listened to what House Democrats had to say. The outcome of Tuesday’s mini-meetings are not yet known. What is known is that time is running out for lawmakers to approve the plan or make meaningful changes to the one passed by the Senate this morning.
The Senate’s plan would prevent taxes from going up on the poor and middle class but would raise rates on households making more than $450,000 a year. It also would also put off for two months more than $100 billion in automatic spending cuts that were set to hit the Pentagon and domestic programs starting this week, and it would extend unemployment benefits for the long-term unemployed.
The Senate voted 89-8 in favor of the package two hours after midnight.
Senate leaders hailed the deal as an “imperfect” but vital solution to the fiscal crisis.
“The president wanted tax increases, but thanks to this imperfect agreement, 99 percent of my constituents won’t be hit by those hikes,” Senate Republican Leader Mitch McConnell said.
Obama praised Senate lawmakers for passing the bill and implored the House to do the same.
"There’s more work to do to reduce our deficits, and I’m willing to do it," Obama said in a statement. "But tonight’s agreement ensures that, going forward, we will continue to reduce the deficit through a combination of new spending cuts and new revenues from the wealthiest Americans."
Senate leaders assembled the vote after a marathon weekend of talks during which Vice President Biden and McConnell did much of the hard bargaining. After the White House and Senate Republicans agreed to the framework, Biden was brought in once more to sell the deal to reluctant Senate Democrats Monday night.
The late-night deal ironed out the last major sticking point between the two sides -- what to do about the $110 billion in automatic spending cuts set to kick in starting in January.
Officials said the two sides agreed to postpone the cuts by two months, in exchange for a 50-50 mix of revenue increases and spending cuts. Of those cuts, half would come from defense and half would come from other budgets.
Fox News has also learned the deal contains a repeal of an ObamaCare program called the CLASS Act. The provision, which would set up a government-run long-term care program, was never actually implemented amid concerns that it couldn't generate enough revenue to sustain itself.
Fox News' Ed Henry, Chad Pergram and Mike Emanuel contributed to this report.

Read more: http://www.foxnews.com/politics/2013/01/01/senate-leaders-aim-for-vote-on-fiscal-crisis-deal-as-congress-misses-deadline/#ixzz2Gl3muF5R

House reviews Senate fiscal cliff compromise; timing on vote unclear

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White House, Senate leaders reach deal on taxes, delaying 'sequester' cuts

President Obama and Senate Republicans reached a sweeping deal late Monday that would let income taxes rise significantly for the first time in more than 20 years, fulfilling Obama’s promise to raise taxes on the rich and averting the worst effects of the “fiscal cliff.”
According to Democratic aides, Vice President Biden is on his way to the Capitol to explain the details of the pact he negotiated with Minority Leader Mitch McConnell, and a Senate vote on the package could be held by 10:30 p.m. ET, beating a midnight deadline. White House officials gave in on the last issue, how to handle estate taxes, yielding to GOP wishes, aides said.
The House will begin considering the bill tomorrow, with a vote on final passage in the next day or two. 

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NO TAX VOTE IN HOUSE TONIGHT; US POISED TO GO OVER FISCAL CLIFF

As of early evening on New Year's Eve, negotiators had not yet reached a comprehensive deal to avert the combination of automatic tax hikes and spending cuts that will take effect on Jan. 1. With the House adjourning, the government appears certain to go over the cliff, triggering automatic tax increases for all Americans and deep cuts in military and discretionary spending.

As the hours dwindled before the midnight deadline, talks between Senate Republicans and the Obama administration had failed to produce an accord. Senate Minority Leader Mitch McConnell, R-Ky., said mid-afternoon that both sides were "very, very close" to an agreement and had, in fact, made a deal allowing taxes to rise on individual income over $400,000 per year, and household income of $450,000 per year.

The sticking point involved the "sequester," the automatic and swift cuts to spending that make up the second prong of the fiscal cliff. Republicans have signaled they might let the sequester take effect unless it was offset by other spending cuts; the GOP has also said it might accept a delay, but only for a few months.

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Obama: Fiscal cliff deal 'within sight'

(CNN) -- An agreement to avert the "fiscal cliff" of automatic tax increases and spending cuts appears to be "within sight," President Barack Obama said Monday.

"There are still issued left to resolve, but we are hopeful Congress can get it done," Obama said.

The deal that was taking shape included an agreement to raise the income tax rate on top earners to what it was during President Bill Clinton's last term in office, according to sources close to the process.

A GOP source told CNN negotiators are "very close" to a deal. The sticking point is $24 billion in spending cuts being sought by Republicans, according to the source.

"It's like looking under the cushions at this point," the source said. "If we can't find that at this point, we should pack this place up."

But one leading Senate Democrat warned the deal could run into trouble -- not only from House Republicans who have long opposed any tax increase, but also from liberals in the Senate who oppose allowing more high-income households to escape a tax increase.

"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said.

President Barack Obama was expected to discuss the issue in public remarks at the White House.

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No fiscal deal Sunday; Senate to return New Year's Eve

By Michael O'Brien, NBC News

After a day of talks that were expected to yield some sort of compromise on the so-called fiscal cliff, Senate leaders called off any further votes until Monday morning, just hours before the deadline that will trigger across-the-board tax increases and dramatic cuts in military and domestic spending. 

The Senate will meet again on New Year's Eve, the last full day before the "cliff" takes effect on Jan. 1. Negotiations were expected to continue in the meanwhile.

A day of wrangling in the Senate came and went without an accord to avoid the fiscal cliff, leaving lawmakers just a matter of hours to sort through thorny issues of taxes and spending that have beguiled Congress for the better part of the past two years. 

Significant distance remains between the two sides and negotiations continue, although the clock continues to tick. Even a simple deal appears far from certain.

 

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The Fiscal Cliff is a Diversion from the Real Problem

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Scott Powell

The fiscal cliff is a less a crisis than a creation that diverts the attention of policymakers, the media and the public away from the big picture abyss that threatens the United States and shifts focus to the smaller and more immediate tax and spending debate associated with the year-end expiration of the Bush tax cuts.

The central problem facing the U.S. that few understand is the growing systemic risk from the unsustainable trajectory of deficit spending and debt accumulation and the $225 trillion derivatives exposure largely held by a handful of U.S.  banks that are too big to fail.

We are told that if Congress and the President cannot agree on a bill to cut spending and raise taxes, we go over the fiscal cliff on January 1st, which triggers the expiration of the Bush tax cuts and the sequestering of government spending by $1.3 trillion over ten years, which is about $125 billion per year or 3% of the annual federal budget.  So, in reality, we go over the fiscal cliff either way.  The concern is that with the latter course of reversion to the pre-Bush tax regime, the severity and breadth of the tax hikes on the middle class combined with spending cuts would be a double–barrel dose of austerity that could trigger a recession.

But what is striking about the current debate is how relatively small the numbers are compared to those associated with the greater problems of systemic risk that could precipitate a financial collapse: 

• The U.S. Government bond market bubble that has grown 55% to $16.38 trillion in the first 4 years of the Obama administration, a sum which is now 107% of U.S. GDP and equals the entire debt accumulated in the first 225 years of America’s history. 
• The $220 trillion in U.S. derivatives exposure held by JP Morgan, Bank of America, Citibank and Goldman Sachs, a sum which amounts to 3.3 times the entire world Gross Domestic Product.

The fact that the Federal Reserve recently decided to more than double its monetary stimulus (also known as “money printing,” debt monetization, quantitative easing or simply QE) to $85 billion a month is telling.  It suggests the Fed may be taking emergency measures to contain systemic risk and fund deficit spending and U.S. government debt issuance foreigners no longer want.  The doubling of QE to a trillion dollars a year is a complete departure from what any previous Federal Reserve board would consider appropriate or responsible. 

In addition, if the Fed policy of reducing federal funds rate to zero has been unprecedented, consider that fact that we are now 5 years into this zero interest rate engineering—a Fed policy that explicitly deprives savers, especially the retired and elderly, of interest income, forcing them to spend principle or take more risk at time when they can least afford it.

Since the November 6 elections, no one seems to be discussing what the U.S. needs to do to restore its economic health and return to normal.  Staying in denial and addicted to deficit spending, QE and artificially low interest rates is an unquestionably risky path—one that leads to misallocation of resources and discourages investment, capital formation and wealth creation.

Obviously QE and low interest rates facilitate the Federal government’s deficit spending, as well as assisting in bailing out the banking and housing sectors.  But the money that the Fed is creating is making the holders of dollars nervous.  If investors shun the dollar and the exchange rate falls, interest rates will rise and the price of bonds and mortgage-backed securities declines.  And when debt prices fall the collateral backing the banks massive derivatives bets could trigger a financial collapse that would make 2008 look like a cakewalk. 

Deficit spending financed by the printing of money and escalating federal debt cannot be sustained.  It risks triggering significantly higher inflation or a collapse of the dollar and the bond market. Either outcome hurts most the very people the Democratic Party claim to represent—the middle and lower class. Moreover, uncontrolled public debt now threatens to rupture society as the older generations’ benefits are increasingly financed by debt born by the young.

What is needed now is leadership and conviction to do the right thing for all Americans.  We will get through the fiscal cliff one way or another, but then the real work needs to commence.  Outside Washington, there is a palpable sense that the U.S. economy is rigged and in a precarious state. The Republican majority in the House of Representatives can start to reclaim the moral high ground by exercising the courage and commitment to educate the public about the nation’s fiscal reality and explain the corrective options available to steer clear of the abyss of financial collapse.

-----------------------------
Scott Powell is a senior fellow at the Discovery Institute in Seattle. Email him at scottp@discovery.org

Senators work behind scenes Saturday on fiscal deal, votes would come Sunday

Senate Minority Leader Mitch McConnell and House Speaker John Boehner outside the White House in Washington. (AP)

Senate leaders are working off-stage Saturday to reach a final-hours deal to avert a fiscal crisis, with no official proposals or votes expected until Sunday.

Senate Majority Leader Harry Reid, D-Nevada, has adjourned the chamber until Sunday so Democratic and Republican leaders can negotiate on a deal to present to the House.

House members will officially return to Capitol Hill on Sunday in expectation that the Senate will present them with a plan to stop tax increases that are scheduled to kick in next week.

Senate leaders from both sides of the aisle vowed late Friday to scramble over the weekend to produce a new bill, on the heels of a high-stakes White House meeting with President Obama that is seen as the last chance to come together before the tax-hike deadline.

Minority Leader Mitch McConnell said he hopes senators can come forward with a recommendation as early as Sunday. 

Several senior administration officials told Fox News late Friday night that McConnell, R-Ky., is showing strong signs that he will help seal a deal.

However, they acknowledges he will have a difficult time getting a deal passed in the Republican-controlled House, which  has so far rejected any plan that includes allowing tax rates to increase for higher-earning Americans.

Reid called the White House meeting Friday "very constructive." 

"We need to have everybody step back a bit," he said.

The pledge to work on a new bill is by no means a solution to the sweeping set of tax hikes set to hit Jan. 1, followed by steep spending cuts. Lawmakers still have to write the bill, and produce something that can pass both chambers. 

Obama, speaking from the White House briefing room late Friday, voiced a dose of doubt about the Senate leaders' final push for a deal. 

He said he's "modestly optimistic" but that if Reid and McConnell fail, the Senate should allow an up-or-down vote on a scaled-back proposal the president is pushing. 

"The hour for immediate action is here, it is now," Obama said. "We're now at the last minute, and the American people are not going to have any patience for a politically self-inflicted wound to our economy. ... We've got to get this done." 

Considering how late this effort is getting underway, lawmakers easily run the risk of missing the deadline and causing at least some uncertainty with Americans' tax bills starting next week. 

The developments late Friday, though, at least showed Reid and McConnell were beginning to work together. And it marked a decision by lawmakers that the Senate should make the first move -- for days, House Speaker John Boehner has insisted that the Senate act, but Reid has resisted and put the onus on the House. 

It's unclear what the new bill would entail. It appears the Senate wants to tweak the Obama plan, which would include an extension of current tax rates for most Americans -- but potentially adjust it so fewer earners see a tax hike, and add a provision dealing with a looming expansion of the estate tax. 

The debt ceiling, which Obama wants increased, would not be part of this bill. And a senior White House official admitted it is unclear how a looming set of spending cuts would be addressed. 

Read more: http://www.foxnews.com/politics/2012/12/29/senators-work-behind-scenes-saturday-on-fiscal-deal-votes-would-come-sunday/#ixzz2GT2vFe9D