FISCAL TALKS FREEZE: Lawmakers Refuse to Make First Move to Avert Crisis

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You go. No, you go.
That's the refrain on Capitol Hill, as House and Senate leaders each refuse to make the first move in crafting a bill that can avert the fiscal crisis scheduled to hit next week. President Obama, en route from Hawaii, will land in Washington Thursday morning -- but with Republicans and Democrats not exactly talking to one another, it looks like Thursday will be another wasted day as the odds mount of a historic tax hike setting in Jan. 1.
Though Obama, before leaving on vacation Friday, expressed hope that both sides could come together on a scaled-down package that at least averts most of the tax increases, no compromise bill has emerged. Instead, the leaders of the House and Senate returned to familiar talking points late Wednesday, as part of a drawn-out waiting game with huge consequences. The Senate is waiting on the House, the House is waiting on the Senate, and Americans are waiting to see what will happen to their paychecks in 2013.
Senate Democratic Leader Harry Reid, in a brief written statement, urged Republicans to pass a Senate bill that raises taxes for households making above $250,000 and preserves current rates for everyone else.
"It is time for House Republicans to put middle class families first by passing the Senate's bill to protect 98 percent of Americans from a tax hike on January 1. The Senate bill could pass tomorrow if House Republicans would simply let it come to the floor," Reid said. "The Senate has already rejected House Republicans' Tea Party bills, and no further legislation can move through the Senate until Republicans drop their knee-jerk obstruction. Right now, the Senate bill is the only bill that can become law, and House Republicans owe it to middle class families to let it pass with Democratic and Republican votes."
House Speaker John Boehner earlier made the same argument about two Republican-passed bills in his chamber -- one extending current tax rates for everyone; the other rearranging the $110 billion in spending cuts set to hit next year.
"The House has acted on two bills which collectively would avert the entire fiscal cliff if enacted. Those bills await action by the Senate," he and other Republican leaders said in a statement. "If the Senate will not approve and send them to the president to be signed into law in their current form, they must be amended and returned to the House."
They said the House would either accept those bills or continue to amend them, adding: "The House will take this action on whatever the Senate can pass, but the Senate first must act."
With each side refusing to make the first move, it may be incumbent upon Obama to give a negotiated bill one last try, presuming he can get all the stakeholders in the same room. Also unclear is what role Senate Republican Leader Mitch McConnell, who has stayed largely quiet throughout this debate, may play in pushing for an 11th-hour deal.
A new Gallup poll, though, showed Americans are growing increasingly pessimistic about the chances for an agreement in roughly five days. The Senate is in session Thursday for unrelated business, but the House is not. House Republican members have been told they would be given 48-hours notice if they are called back. Considering the time it takes to write and pass a bill of this magnitude, the best route for averting tax hikes may be to pass a short-term extension of current rates with the goal of approving a larger package early next year.
Lawmakers have not even agreed to that, though. Without a deal, more than $500 billion in tax hikes are scheduled to go into effect. This includes increases in income tax rates, investment tax rates, the estate tax, the payroll tax and other provisions. Budget cuts to the Pentagon and other federal agencies threaten to hit government contractors. All together, a prolonged failure to avert these policies could cause another recession, economists warn.
While Reid is in Washington, Boehner spokesman Michael Steel said Thursday that Boehner has not yet left Ohio. Steel said "lines of communication remain open" -- but, reiterating the speaker's position, he said "communication is no substitute for Senate action."

Read more: http://www.foxnews.com/politics/2012/12/27/house-senate-leaders-frozen-on-fiscal-talks-as-odds-tax-hike-rise/#ixzz2GGSVUWB5

Finger-Pointing Mounts Over 'Fiscal Cliff'

AP

Fear, finger-pointing mount over "fiscal cliff"

By Thomas Ferraro and Richard Cowan

WASHINGTON (Reuters) - Some lawmakers voiced concern on Sunday that the country would go over "the fiscal cliff" in nine days, triggering harsh spending cuts and tax hikes, and some Republicans charged that was President Barack Obama's goal.

"It's the first time that I feel it's more likely that we will go over the cliff than not," Senator Joe Lieberman, an independent from Connecticut, said on CNN's "State of the Union."

"If we allow that to happen it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history."

Read more: http://nation.foxnews.com/fiscal-cliff/2012/12/24/finger-pointing-mounts-over-fiscal-cliff?cmpid=NL_FiredUpFoxNation#ixzz2GBUiTVhQ

The Cost of Spending: In search of solutions to America's debt crisis

By Bret Baier 

We're always hearing from politicians about the urgency of the nation's fiscal situation. The debt is over $16 trillion. Deficits -- the annual shortfall -- are persistently north of $1 trillion. 

Those figures are constantly in the background, reminding both parties that whatever the solutions, they need to find and act on them quickly. And the solutions will have to be big -- because the problem is massive. 

Experts agree that drastic changes are needed to return America to a fiscally sustainable path. But it's a long road to get there -- in the face of $1 trillion deficits, closing the gap will be done one million, one billion, at a time. 

Here are a few ideas: 

• Shutting down the post office on Saturdays would help save about $3 billion. 
• Changing Medicare eligibility from 65 to 67 would bring back $6 billion, according to one estimate. 
• A plan proposed by Sen. Tom Coburn that cuts non-essential defense programs would save $7 billion. 
• Capping tax deductions at $25,000 would retain $68 billion. 
• And proposed additional taxes on the top 2 percent of earners would bring in $82 billion. 

Hypothetically, if all these proposed solutions were to be enacted, the U.S. would spend $166 billion a year less than it does today. 

That's a lot. But not when it's compared with how much is spent in a year -- $3.5 trillion in 2012. And it's even less when compared with the total national debt. 

Economist John Taylor, who wrote the book "First Principles: Five Keys to Restoring America's Prosperity," said lawmakers could solve the problem by focusing on a few key areas. 

"The problem was created in Washington. It can be fixed in Washington," he said. "I have to think in terms of economics what the best thing to do (is) and for me that's to gradually reduce spending as a share of GDP, that means reduce the growth rate." 

He continued: "That's what a family would be doing if they were borrowing too much, they'd just go back to where they were before the problems began. ...  Number two, we have an opportunity now for, to reform our tax code, that will also stimulate economic growth and work on this high unemployment rate. And longer term, there are some reforms in Social Security, Medicare in particular, that can reduce really what is expected to be an explosion of spending into something that's more sensible, more sustainable." 

Former Democratic Sen. Evan Bayh narrowed the solutions down to two categories. 

"Number one, getting our future rates of entitlement spending under control, particularly in the health care arena. Those are the big numbers," he said. "Secondly, even modest increases in the rate of growth in the economy, even .5 percent more per year." 

He said that over a decade or more, that growth "generates huge money which makes it so much easier to solve this problem in a way that's politically palatable." 

Alice Rivlin, Bill Clinton's budget director and one of the only people to serve on both of the most prominent deficit-reduction commissions in Washington, agreed that the growth in health care entitlements must be slowed. 

She added: "You have to put Social Security back on a firm foundation and you have to raise more revenues through a reformed tax code. Everybody who's looked at it comes out that way. ... But (lawmakers) are caught in this political game of blaming each other." 

Economists urged lawmakers not to squander the opportunity to correct course. 

"I'm actually convinced that now is a better time than ever," Arthur Brooks, president of the American Enterprise Institute, said. "We have a golden opportunity to do some of the things that we should have done a really long time ago. We have an opportunity to actually shape the entitlement crisis. ... The key thing that we have to remember is not to let this slip away."

Read more: http://www.foxnews.com/politics/2012/12/21/cost-spending-in-search-solutions-to-america-debt-crisis/#ixzz2FnhCNL00

Obama on cliff deal: 'Still think we can get it done'

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Lacking support, House pulls last-ditch cliff fix, heads home

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By Carrie Dann, NBC News

Updated 9:41 p.m. ET -- After a cancelled vote on a contingency bill and a dramatic defeat for Republican leadership, United States House members will head home for the Christmas holiday without legislative action to halt a mix of automatic spending cuts and tax increases set to take effect in just 11 days.  

Lacking enough support to pass a backup proposal to avert the so-called fiscal cliff, House Republican leaders on Thursday night were forced to pull from the floor a vote on 'Plan B' legislation that would have preserved Bush-era tax rates for all earners making less than $1 million but raised rates on the country's top earners.

At the end of a week that began with high hopes for compromise on a bargain to correct the nation's fiscal course, Washington now appears further apart than ever.  

House Speaker John Boehner intended that his last-ditch tax effort, coupled with revised spending reductions, would give the GOP-dominated House continued leverage in its negotiations with the White House and the Senate, both controlled by Democrats. But it was ultimately brought down by conservative Republicans reluctant to raise tax rates on any Americans, even the nation's top earners.

The House will now recess for the Christmas holiday, leaders said. Members have been advised that the House will return "when needed" before the end of the year.

"The House did not take up the tax measure today because it did not have sufficient support from our members to pass," House Speaker John Boehner, R-Ohio, said in a statement. "Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff.  The House has already passed legislation to stop all of the January 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation's crippling debt.  The Senate must now act."

The Senate is expected to return to session after the Christmas holiday on December 27.

In a statement, the White House promised continued work with Congress.

"The President’s main priority is to ensure that taxes don’t go up on 98 percent of Americans and 97 percent of small businesses in just a few short days. The President will work with Congress to get this done and we are hopeful that we will be able to find a bipartisan solution quickly that protects the middle class and our economy."

Boehner proposed the "Plan B" legislation Tuesday, saying that it would provide a backstop to prevent middle class tax rates from jumping if a larger deal was not reached by the cliff's deadline at the end of the year.

But the measure was panned from both sides, with the White House calling it a political ploy that would be subject to a presidential veto and Senate Democrats pledging that it would not even be taken up for a vote in the upper chamber.

Tax watchdog Club for Growth also urged Republicans to vote "no" on the measure, as did conservative group Freedomworks -- which originally supported the Plan B effort before abruptly switching to opposition on Thursday afternoon. The socially conservative Family Research Council also scolded that "Congress should know better" before the vote.

Boehner and other GOP leaders had firmly indicated earlier Thursday that they had sufficient support to pass the Plan B legislation, along with another package of spending cuts. "We're going to have the votes to pass both the permanent tax relief bill as well as the spending reduction bill," House Majority Leader Eric Cantor, R-Va., told reporters at a press conference at the Capitol."

But a breakdown became evident after the GOP-dominated House only narrowly passed the package of spending reductions, which was intended to replace automatic defense cuts, or "sequestration." That measure, meant to encourage possible conservative dissenters to support the tax proposal, squeaked to victory by a margin of 215-209, with twenty-one Republicans voting against the bill.

The House then immediately went into an unexpected recess, with members huddled behind closed doors before announcing the end of votes for the evening.

A source in the room tells NBC News that Boehner made an impassioned plea for his members to support the bill, saying they would lose their negotiating power if they didn't pass it. But his pleas - and urging from an emotional Mike Kelly, R-Penn., were not enough to muster the needed votes.

Freshman lawmaker and public Boehner critic Rep. Tim Huelskamp, R-Kansas, called the measure's defeat “a victory for Republican principles,” saying the GOP should not have to vote for "a show bill."

But fellow Republican Rep. Steve LaTourette of Ohio struck a mournful tune after the vote was abandoned.

"It's unbelievable, this is horrible," he said. "I'm angry, I'm sad for my friend the Speaker, and I'm sorry for the country.  We deserve better."

GOP intends to plow ahead with ’Plan B’ despite Dem opposition

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Is Boehner walking away -- again?

By Chuck Todd, Mark Murray, Domenico Montanaro, and Brooke Brower

*** Is Boehner walking away -- again? In July 2011, at the height of the White House-GOP talks over the debt-ceiling debate, House Speaker John Boehner walked away from the negotiations. His side argued that President Obama and his team moved the goalposts; others have pointed out that House Majority Leader Eric Cantor told Boehner that he and the GOP caucus couldn’t support any more counteroffers. But the bottom line is that Boehner walked away from the grand-bargain talks, and the White House let him walk. Now history seems to be repeating itself. After Boehner compromised last Friday to raise tax rates on income above $1 million, and after Obama compromised even further by raising his income threshold to $400,000 and putting Social Security cuts on the table, Boehner and House Republicans retreated to focus on “Plan B” -- a one-sided effort to raise rates above $1 million that Democrats NOW adamantly oppose. The House vote on the measure will take place today. "Tomorrow, the House will pass legislation to make permanent tax relief for nearly every American, 99.81% of the American people," Boehner said yesterday. "And then the president will have a decision to make: He can call on Senate Democrats to pass that bill, or he can be responsible for the largest tax increase in history."

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Fiscal crisis deal could spell disaster for America's fragile economy

By Peter Morici

pakistankakhudahafiz.com

Washington has always made lots of things—bureaucratic regulations and hot air to name two—and it even prints money that instigates inflation.  Now in the names of fairness and fiscal responsibility, President Obama and Speaker Boehner are cooking up a deal to avert the fiscal cliff that could easily thrust the economy into a deep recession.

Taxes are going up.

Just about everyone agrees the two percentage point temporary reduction in the payroll taxes will lapse—it is too much of a drain on the solvency of Social Security. That will raise about $125 billion in revenue for 2013.

It is now apparent the Bush era income tax reductions for many wealthy families will not be extended. Mr. Obama is now willing to settle for raising rates on families earning over $400,000, whereas Mr. Boehner wants to set the threshold at $1 million. The cutoff that will likely emerge is about $500,000 and would generate another $50 billion a year in income taxes.

Clearly, Messrs. Obama and Boehner know a lot about getting elected but on economics they are spread thin. Like the sorcerer’s apprentice, they are courting disaster.

The administration would also like to limit the value of itemized deductions and other tax breaks, including the tax-free status of municipal bonds. Mr. Boehner is inclined to go along, and if he accepts the president’s framework, it should generate another $50 billion in income taxes.

Republicans want spending cuts that at least match tax increases. The question is what tax increases will they get matched—$100 billion in additional income taxes or that sum plus the additional $125 billion obtained by letting the payroll tax holiday lapse.

Given how stubbornly President Obama defends the rapid growth in entitlements and his desire to extend long-term unemployment benefits, the likely target for Republicans is $100 billion in cuts from permanent reductions in entitlements and some trimming in other domestic areas and defense.

hg.scimth.net

The president also wants some jobs creating temporary infrastructure spending in the range of $50 billion but that will take at least years to actually be effected.
Hence, overall taxes will rise about $225 billion and spending will be cut by about $75 billion, subtracting at least $300 billion from GDP in 2013—or nearly 2 percent, and owing to the ripple effects through the economy, about $450 billion from GDP in 2014.

The economy was growing at two percent until nervousness about the fiscal cliff recently dampened business spending and hiring.

Though some economists were optimistic that the housing recovery and stronger auto sales could spell better times, with such a new large drag on the economy, GDP growth in 2013 and 2014 will likely be below 2 percent for the next several quarters.

At that pace, businesses can easily handle most new demand by increasing productivity, and even trim payrolls to further boost profits. Hence, growth below 2 percent for several quarters could easily instigate a negative feedback cycle—layoffs cut household income and consumer spending, and in turn, the latter begets more layoffs.

What is going on in Washington these final weeks before the New Year is the kind of fiscal fundamentalism that is making Greece, Italy and Spain economic train wrecks.

With unemployment so high, real wages falling and so many folks working part time for lack of full time work, the unemployment rate could easily surge into the teens, and no amount of stimulus spending could bring it back.

Clearly, Messrs. Obama and Boehner know a lot about getting elected but on economics they are spread thin. Like the sorcerer’s apprentice, they are courting disaster.

Read more: http://www.foxnews.com/opinion/2012/12/19/fiscal-crisis-deal-could-push-our-economy-into-recession/#ixzz2FcMmSxrs

Sen. Rubio Discusses the Fiscal Cliff with Sean Hannity

SenatorMarcoRubio

GOP Readies 'Plan B' Vote Showdown

foxnews/

House Republicans are charging ahead Thursday with a pair of votes aimed at averting tax hikes scheduled to kick in 12 days from now -- but the move is fraught with tactical risk, as Democrats have effectively boycotted the legislation. 

The bills expected to come for a vote by Thursday evening amount to what House Speaker John Boehner is calling a "Plan B." One bill would prevent tax hikes for everyone save for those making more than $1 million. In a late decision, Republicans also introduced a bill that would temporarily replace automatic spending cuts set to hit in January. 

But while GOP leaders are gradually winning the support of their rank-and-file, Democrats in both chambers, as well as President Obama, are adamantly opposed. The White House on Wednesday issued a veto threat. 

Boehner and Obama had until early this week been engaged in seemingly productive talks toward a compromise package. The move to draft a "Plan B" could be aimed at strengthening Boehner's negotiating position, as he tries to extract more spending cuts and more modest tax rate hikes from the White House as part of any deal. But Democrats were so angered by the new proposal that the future of talks is unclear. 

Boehner on Wednesday put the onus on the president to get Democrats on board with "Plan B." 

"Tomorrow, the House will pass legislation to make permanent tax relief for nearly every American," Boehner said, during a press conference that lasted less than a minute. "Then the president will have a decision to make. He can call on the Senate Democrats to pass that bill or he can be responsible for the largest tax increase in American history." 

Later in the evening, Democrats boycotted the meeting where lawmakers were setting the terms for debate on Thursday. Democrats, in a written statement, called the process "outrageous and empty," and a "hoax." 

Senior administration officials accuse Boehner of at least temporarily derailing fiscal talks with the "Plan B" move. During his own press conference Wednesday, Obama urged Republicans to "peel off the partisan war paint." 

Republicans, though, said the White House was being unreasonable. 

Read more: http://www.foxnews.com/politics/2012/12/20/republicans-plan-showdown-votes-on-fiscal-crisis-over-dem-opposition/#ixzz2FbTpsB11

Fiscal cliff talks reach make-or-break point

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By Chuck Todd, Mark Murray, Domenico Montanaro, and Brooke Brower

*** What is Boehner doing? That’s our question after House Speaker John Boehner yesterday unveiled “Plan B” -- legislation that would raise tax rates on household income above $1 million but keep them status quo for everyone else -- which the House is scheduled to vote on Thursday. Is Plan B, which comes after President Obama made some of his biggest concessions in the fiscal-cliff debate (chained CPI, moving the income marker to $400,000), a way to strengthen Boehner’s negotiating hand with the White House? Is it to prove a point to his rank-and-file members that they can’t have their entire way in these negotiations? (It’s highly doubtful that Boehner even has the votes to pass Plan B.) Or is it a way to scuttle the talks with the White House? Here’s the answer from Boehner’s office: “Making sure we protect 99.81% of Americans from a tax hike.” What we’re watching today: Do Boehner and House GOP leaders spend more time trying to get votes for Plan B, or do they spend more time negotiating with the White House?

*** Three reasons why the move is so puzzling: There are three reasons why Plan B -- if it’s a serious effort -- seems so puzzling. One, as we wrote yesterday, the two sides are thisclose in getting a deal done. (Where the two sides are publicly is not where they were Monday night; they have both moved in each other’s direction further.) Two, if we go over the fiscal cliff (and time is running out, folks), Republicans might not realize the extent to which President Obama will own the bully pulpit in January. After all, there’s a certain inaugural address on Jan. 21, as well as the State of the Union. And three, are enough House Republicans really going to cast a tough vote -- raising taxes -- without getting any spending cuts or resolution on the sequester in return? And are they going to cast a vote for legislation that breaks a longstanding pledge on taxes that has zero chance of becoming law simply to give Boehner leverage? If Boehner and leadership do pull this off and convince their rank-and-file to vote on legislation that is designed just to give Boehner leverage, it would be quite the political feat. But for what end? Boehner already had one big piece of invisible leverage over the White House: a 2013 domestic agenda. The White House knows not getting a deal now, while politically more damaging for Republicans, probably means he’ll get very little down legislatively next year -- perhaps his ONLY year in a second term to focus on passing legislation.

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It's the spending, stupid -- the GOP must stay on message

Fox By Liz Peek

John Boehner held a press conference Thursday, at which he accused President Obama for “just not being serious about cutting spending.”  It’s about time.

Republicans are being hammered in the court of public opinion, and they have only themselves to blame. Americans are sick to death of political bickering, and want to see a deal done to avoid the fiscal cliff. Most people think a tax hike on the wealthy is part of a reasonable approach to narrowing our budget deficits. Republicans bucking this popular notion continue to drag out the tired arguments about hitting small businesses where it hurts; most people don’t imagine that the local barbershop is in the top one percent – and they’re right.

Here’s what the GOP should be talking about: our ever-increasing spending. For the first two months of the current fiscal year, federal spending is up 16%. No one has broadcast that figure -- and it is a stunner. Because spending is up more than revenues, which have climbed 10 % so far this fiscal year, our budget deficit is higher – by 25% -- than a year ago. That’s right—higher. Even as President Obama claims to have cut spending.

Republicans need to tap into America’s innate conservatism, and they have failed to do so.

Imagine: our budget deficit for the first two months equals $292 billion. Not long ago, Americans would have swooned over that much red ink.  In fact, our annual deficit has exceeded that amount only eight times in our nation’s history – and four of those have been under President Obama.

Americans don’t like deficits; they consistently rank as a top priority reining in spending. Voters know that we are borrowing heavily – one of every three dollars we spend – to finance our red ink, and in the process debasing our dollar. 

They know the Federal Reserve is spinning out new money at an unprecedented rate to keep the ship of state afloat; that institution now has a balance sheet of more than three trillion dollars.

They are unhappy that our federal debt now tops $16 trillion – and that President Obama is now demanding free rein to raise our debt limit even further. They know it is only a matter of time before some investor, somewhere, decides that the U.S. is no longer the best of a bad bunch, and starts demanding higher returns on his loans to Uncle Sam.

Republicans need to tap into America’s innate conservatism, and they have failed to do so. They have allowed President Obama to tag them as the party of “no” -- weapons of mass obstruction. It’s time the GOP got some new talking points, and told Americans the truth about our budget and this White House.

During the election, the back-and-forth between Mitt Romney and President Obama became a bewildering swirl of facts and figures, with both parties denouncing the other for misleading the public.  Both candidates very nearly accused the other of lying.

The truth is that budget projections are based on myriad assumptions and projections; the data is confusing. Here’s what is not confusing: the record. Had the GOP focused on what Obama has actually spent, and not on his fanciful visions of the future when mythical cuts to Medicare (which really are poppycock) and to other programs take hold, they would have scored higher. As it was, a newly cynical public got bored and tuned out. What voters remembered was that Obama pledged to go after the wealthy – and not them.

Read more: http://www.foxnews.com/opinion/2012/12/13/it-spending-stupid-and-gop-must-start-to-deliver-message/#ixzz2FKaCg2EM

Boehner offers to lift debt limit for 1 year

WP/ By Lori Montgomery and Paul Kane 

House Speaker John A. Boehner has offered to push any fight over the federal debt limit off for a year, a major concession that would deprive Republicans of leverage in the budget battle but is breathing new life into stalled talks over the year-end “fiscal cliff.”
The offer came Friday, according to people in both parties familiar with the talks, as part of the latest effort by Boehner (R-Ohio) to strike a deal with President Obama to replace more than $500 billion in painful deficit-reduction measures set to take effect in January.

With the national debt already bumping up against the $16.4 trillion cap set last year, Congress risks a government default unless it acts to raise the debt ceiling in the next few months.
Many Republicans had argued that party leaders should use the threat of default to demand additional spending cuts from Obama. But Boehner’s offer would head off that potentially nasty fight — at least until the end of next year.
Boehner’s offer also includes a proposal to raise tax rates for millionaires, generating $460 billion over the next decade — about half what Obama has demanded from the wealthy, according to official estimates.
The White House rejected the offer, saying it would raise too little cash to significantly dent record budget deficits and do nothing to extend emergency unemployments benefits into the new year, according to a Democrat familiar with the talks.
But the tax offer was viewed as a breakthrough, the Democrat said. Senior White House officials remained in contact with Boehner’s staff throughout the weekend in a sign that serious negotiations had finally begun after weeks of stalemate and partisan posturing.
“Recognizing the importance of raising tax rates is a big, positive and important step,” said former White House economic adviser Lawrence Summers, who emphasized that he was not speaking for the Obama administration.
“The evaluation of any deal should depend on how much total revenue is raised, whether adequate demand is maintained to sustain the recovery and whether we are restoring confidence or just marking time until another debt-limit crisis,” Summers said.
Boehner and Obama have not spoken directly since the Friday afternoon phone call when Boehner extended his latest offer. With Obama in Newtown, Conn., to attend a Sunday-night service for victims of Friday’s elementary school massacre, aides were uncertain when their next meeting would take place.
All told, Boehner’s proposal would generate about $2 trillion in savings over the next decade, split equally between new taxes and spending cuts, according to a Republican familiar with the talks. On the tax side, about $460 billion would be locked in by letting the George W. Bush-era tax cuts expire on income over $1 million a year.
That would boost the top rate from the current level of 35 percent to 39.6 percent for about 400,000 families in the 2013 tax year. The rest of the tax revenue would come through a rewrite of the tax code next year aimed at limiting deductions and other tax breaks. More >>

Boehner: ’Serious differences’ separate GOP from Obama

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Boehner: ’No progress’ toward resolving fiscal cliff

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The Engineered Fiscal Cliff

TheAlexJonesChannel On the Sunday, December 2 edition of the Alex Jones Show, Alex breaks down the ongoing effort by the international banksters to take down the United States with their relentless economic warfare and long-term effort to consolidate power and foist a centralized globalist government on the nation and the world as a whole. He talks about the so-called "fiscal cliff" currently under negotiation behind closed doors by the corporatist one party system and what it means to the future of a withering middle class and America as a whole as an engineered astronomical debt piles up and the value of the dollar slides toward the abyss.

Analyst Slams 'One Of The Most Dangerous Ideas Circulating In Washington'

Joe Weisenthal 

businessinsider.com

On Bloomberg TV this morning, columnist Josh Barro expressed alarm that more and more liberals are saying: "Just go over the cliff."

BofA/ML analyst Ethan S. Harris is not a fan.

We’ve written about this before, but it bears repeating: One of the most dangerous ideas circulating in Washington is that it is okay to go over the cliff temporarily. This increasingly popular view is that going over the cliff will make it possible to strike a better deal.

Harris is correct that this idea is circulating more and more. Liberals like it because the thinking is that it will force the GOP to be in the position of taking the blame for the tax hikes, and that they will have to capitulate on lowering taxes on the middle class, while leaving the tax hikes in place.

Even if you assume that we could go slightly into January without harming the economy much, Harris sees four reasons to be skeptical

They are:

• It's a contradiction that going over the cliff will induce a deal without hurting the economy. If we don't feel pain, what induces the deal? If we do feel pain, then it was a blunder.
• There's no reason a better deal would happen post cliff. More likely going over triggers a blame game.
• The GOP may take a hard line on reversing spending cuts.
• Going over the cliff will represent a dangerous way Washington does business.

What we really need is some number that indicates the kind of damage going into January could do to the economy.

But Harris makes interesting points, especially on the matter of assuming that a deal would be easy once we go over. It could make both parties dig in and wait until there's real damage.

SEE ALSO: If we go off the Fiscal Cliff, the GOP will get blamed >

Read more: http://www.businessinsider.com/bank-of-america-on-one-of-the-most-dangerous-ideas-circulating-in-washington-2012-12#ixzz2E6H4ULQP

Income tax rates just one piece of Obama proposal

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By Tom Curry, NBC News national affairs writer/

In the debate over how to avoid going over the “fiscal cliff” of tax increases and spending cuts, much rhetoric has focused on what President Barack Obama is proposing to do on income tax rates, but that’s just a part of the overall revenue total the president proposed raising from higher-income earners in his budget blueprint.

Obama wants the top two marginal income tax rates to be 39.6 percent and 36 percent, instead of the current 35 percent and 33 percent.

But increasing the tax rates that apply to upper-income people is only a part -- less than a third -- of his longer-term tax proposal.

In the short run, Obama is urging the House to take up a one-year tax measure which the Senate OK’d earlier in the year on July 25.

“The Senate has already passed a bill to keep income taxes from going up on middle-class families,” Obama said in his weekly radio address on Saturday. “Democrats in the House are ready to do the same thing. And if we can just get a few House Republicans on board, I’ll sign this bill as soon as Congress sends it my way.”

He said once that bill is signed, then “we’ll have more time to work out a plan to bring down our deficits in a balanced way – including by asking the wealthiest Americans to pay a little more.”

Monday's Gaggle, which includes, The Chicago Tribune's Clarence Page, The New York Times' Jeff Zeleny and Republican pollster Kristen Soltis, talk about the discussions surrounding around the fiscal cliff.

That Senate-passed bill which Obama wants the House to pass would do the following for one year, 2013:

• Extend income tax rates enacted in 2001 for individual taxpayers making less than $200,000, for heads of households making less than $225,000 and for married couples filing a joint tax return who make less than $250,000 a year.
• Raise the top income tax rates on taxpayers above those thresholds to 36 percent and 39.6 percent.
• Increase the tax rate from 15 percent to 20 percent on dividend income and capital gains income for taxpayers whose income exceeds the threshold amounts above.
• Extend for a year the American Opportunity tax credit, a temporary tax break to offset college expenses which was enacted in the 2009 stimulus law, and extend for a year several tax breaks for low-income people which were part of the 2009 stimulus.
• Extend for one year the $1,000-per-child tax credit.

Altogether, the Senate bill would reduce tax revenues by about $250 billion, compared to the amount that would be collected if the current tax law expires as scheduled at the end of the year.

But as Obama said Saturday, he wants to enact longer-term tax changes.

And his most detailed public offer on tax policy can be found in his Fiscal Year 2013 budget proposal and the July update of that proposal.

If Congress were to enact the Obama tax rate proposal, that is, reinstate the 36 percent and 39.6 percent income tax rates for single taxpayers making more than $200,000 and for married couples making more than $250,000, the president's Office of Management and Budget says it would reduce cumulative budget deficits over 10 years by nearly $430 billion.

To put that $430 billion in perspective, the deficit for fiscal year 2012 was $1.1 trillion. So the ten-year total of revenue gained from raising income tax rates on higher-income people -- $430 billion  -- wouldn't eliminate one year's deficit, much less the deficits for the next ten years. More >>

Republicans offered own proposal to avert 'fiscal cliff'

By Luke Russert and Michael O’Brien, NBC News/

Republicans offered up their own proposal to avert the impending “fiscal cliff” on Monday amid Democratic demands that the GOP match the Obama administration’s plan with one of their own.

In a letter to President Barack Obama, House Republican leaders outlined the contours of a deal they said would achieve a net savings of $2.2 trillion. The plan, which is based on fiscal commission Democratic co-chairman Erskine Bowles’s proposal to the super committee, would achieve these savings through revenue from tax reforms, health savings and discretionary spending cuts.

"Going over the cliff will hurt our economy and hurt job creation in our country. It’s one of the reasons the day after the election I offered a concession to try and speed this process up. Unfortunately, the White House responded with their ‘La-La-Land’ offer that couldn’t pass the House or Senate and was basically the president’s budget from last February," House Speaker John Boehner told reporters on Capitol Hill at a briefing detailing the plan.

 

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Minton-Beddoes on raising taxes

EconomistMagazine

In 2013, deficit reduction will lead discussions in America and Europe, and the rich may feel the squeeze most, says our economics editor.