As the year-end approaches, angst over the impending fiscal cliff only gets worse. There seems to be little real compromise coming out of Washington to get this behind us. The political posturing continues as Americans watch and hope a resolution will be found before the clock runs out. President Obama continues to insist on raising tax rates for the highest income earners, while Speaker Boehner seems insistent on sticking to his guns on virtually all his negotiating points. There are few on Capitol Hill who seem optimistic, but some think there is reason to think some kind of compromise will be worked out in time.
Standing Their Ground
Speaker of the House, John Boehner jabbed at President Obama’s compromise efforts, saying, “The president’s plan to avert the fiscal cliff still does not meet the two standards that I laid out the day after the election,” then added, “Where are the president’s spending cuts?” President Obama has been clear that, “Taxes are going up one way or another,” and it’s just a matter of working out how that will all happen.
Bones of Contention
President Obama’s proposal would bring $1.6 trillion into the government’s coffers by raising tax rates on individuals with incomes over $200,000 and couples with incomes in excess of $250,000 and it would cut $400 billion in spending over ten years. That sounds pretty straight forward, but as usual the devil is in the details and neither side can agree on how to resolve their differences. Republican’s have a major issue with raising rates on high income earners and insist the President’s proposal will stifle small business growth because so many small business owners’ business income is taxed to them personally because of the type of business entity they operate.
Both Sides Claim They Have Compromised
While all the negotiating is going on both sides continue to insist they have put forth reasonable proposals. A representative speaking on behalf of Speaker Boehner said that Republican’s had, “sent the White House a counteroffer that would achieve tax and entitlement reform to solve our looming debt crisis and create more American jobs.” Part of the Republican’s proposal is to raise the age Medicare eligibility age from 65 to 67, which Democrats have opposed. However, President Obama said in an ABC interview, that the idea is “something that’s been floated.”
Sentiment on Capitol Hill
A roundup of reactions to the negotiations from both sides of the aisle seem pretty gloomy about the prospects of averting the fiscal cliff. Speaker Boehner said of President Obama’s plan, “His plan does not fulfill his promise to bring a balanced approach to solving this problem…,” while House Republican Whip Kevin McCarthy, said of the overall inability to reach a compromise, “I think it’s getting worse, not better.” In what is probably the most optimistic statement heard lately on Capitol Hill, from the Democratic side of the aisle, Senate Majority Leader Harry Reid said, “I think it’s going to be extremely difficult to get it done before Christmas, but it could be done.”
While many aspects of the government’s attempts to avert the fiscal cliff may be extremely confusing, one thing is clear. With the holiday season upon us, American’s festive enthusiasm
is tempered with serious concern over the outcome of the negotiations in Washington.