Fiscal cliff deal increasingly unlikely, but it’s only political theatre

This is the way I see this playing out: The House Republicans ran on the platform that they would not raise taxes on anyone, that is why they would not vote for Boehner’s “Plan B’ which would have raised taxes on those making more than $1 million. We will more than likely go over the “fiscal cliff” on January 1, 2013. By late January Congress will pass and Obama will sign a bill that lowers taxes for everyone making less than $500,000, extends unemployment insurance, raises the debt ceiling, patches the AMT, raises capital gains and dividends to 20% and sets the estate tax exemption at $3.5 million. The Republicans can say they never voted to raise anyone’s taxes (the expiration of the Bush tax cuts did that), as a matter of fact, they voted to lower taxes. The President gets what he wants, punishment for the greedy rich and a low tax rates for the middle class. All this noise is political theatre.-Lou

Fiscal cliff deal increasingly unlikely

 

Politico

Nearly all the major players in the fiscal cliff negotiations are starting to agree on one thing: A deal is virtually impossible before the New Year.

Unlike the bank bailout in 2008, the tax deal in 2010 and the debt ceiling in 2011, the Senate almost certainly won’t swoop in and help sidestep a potential economic calamity, senior officials in both parties predicted on Wednesday.

With the country teetering on this fiscal cliff of deep spending cuts and sharp tax hikes, the philosophical differences, the shortened timetable and the political dynamics appear to be insurmountable hurdles for a bipartisan deal by New Year’s Day.

Hopes of a grand-bargain — to shave trillions of dollars off the deficit by cutting entitlement programs and raising revenue — are shattered. House Republicans already failed to pass their “Plan B” proposal. And now aides and senators say the White House’s smaller, fall-back plan floated last week is a non-starter among Republicans in Senate — much less the House.

On top of that, the Treasury Department announced Wednesday that the nation would hit the debt limit on Dec. 31, and would then have to take “extraordinary measures” to avoid exhausting the government’s borrowing limit in the New Year.

(Also on POLITICO: Republican leaders huddle over fiscal cliff)

Senate Democrats are considering fallback options to resolve the crisis, but they appear unlikely to push forward if Republicans decide to mount a serious opposition. The White House, a senior administration official said, is in close coordination with Senate Democrats. Late Wednesday, Reid’s office pushed Republicans to pass a bill to extend tax rates for income below $250,000.

A meeting at the White House between Congressional leaders and President Barack Obama is likely this week, sources said.

The House sidestepped a decision Wednesday to bring the chamber back into session, putting the burden squarely on the Senate, where the stars will need to align for swift action in the next few days. Speaker John Boehner’s leadership team said bluntly: the “Senate first must act” before the House will consider additional legislation to avoid the cliff. So that they’re all on the same page, House Republicans will have a members only conference call Thursday.

(Also on POLITICO: Treasury: U.S. will hit debt limit New Year’s Eve)

For Senate Majority Leader Harry Reid to bring up a new bill, he’ll need assurances from Senate Minority Leader Mitch McConnell not to filibuster it — and not to pressure his members to block it. And Reid will need Boehner’s word that any Senate-passed bill would be scheduled for a vote and could pass with support largely from Democrats, even if it lacks a majority of Republican support.
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