Negotiations are going on furiously in
as the two parties try to reach a compromise and spending and taxes to avoid
what has been called the “fiscal cliff”, a situation where large tax increases
and large spending cuts go into effect unless there is action by the
government. Actually only one side is
trying to reach a compromise, on the other side the Republicans are trying to get Democrats to enact
the Mitt Romney campaign positions.
Mr. McConnell (R., Ky.) said bipartisan agreement on higher Medicare premiums for the wealthy, an increase in the Medicare eligibility age and slowing cost-of-living increases for Social Security could move both parties closer to a budget deal that averts the so-called fiscal cliff, the combination of spending cuts and tax increases that start in early January unless
In return for the support of Democrats, he said, Republicans would agree to include more tax revenue in a budget deal, though not from higher rates.
Yes, everyone is reading that correctly. The Republicans are saying just vote in the plans for the economy that voters overwhelmingly rejected in the just concluded campaign, and they, the Republicans, will be happy to go along.
The amazing thing in all of this is that President Obama is holding firm, requiring that higher tax rates on the highest income Americans be part of any deal. It’s been almost a full month since the election and the President hasn’t back down.
While the two sides traded barbs in
Washington, Mr. Obama kicked off a campaign intended to
pressure Republicans, with appearances around the He repeated calls for Congress
to extend the Bush-era tax cuts for families making less than $250,000 a year to
workers Friday at a factory in U.S. , that makes K'NEX
construction toys. Hatfield,
"I want the American people to urge Congress soon—in the next week, the next two weeks—to begin the work we have by doing what we all agree on," Mr. Obama said. "I want you to call; I want you to send an email, post on their Facebook wall." Next week, Mr. Obama plans to meet with governors and deliver a speech to the Business Roundtable, a
lobby group. Washington
The logical path for the President and Democrats is to let the Bush era tax cuts expire. This would push the top rate to 39.5%, and then Democrats could allow it drop to say 37.5% and cap deductions. Republicans could claim a tax cut and Democrats could claim a win for the middle class and for fiscal stability.
The only question here, are the President and the Democrats smart enough and strong enough to see this through. History does not bode well for that outcome.