Congressional Leaders To Meet With President Obama
It's December 28th and the United States still doesn't have a deal in place to avoid the upcoming "fiscal cliff".
This is a big problem, as the country is set to fall off of the cliff on January 1st, 2013. This is the day when a number of tax provisions expire, including the "Bush tax cuts" and the payroll tax cut. In addition, automatic spending cuts, per the terms of the Budget Control Act of 2011, are also scheduled to be enacted early in 2013.
Very few people actually want the country to go off the "fiscal cliff", as the results would be potentially disastrous for an already fragile economy. The CBO (Congressional Budget Office) has already predicted that going off of the "fiscal cliff" would very likely result in a recession for the United States.
Both sides want a "fiscal cliff" deal, but both sides obviously have different opinions as to what should comprise such a deal. The Democrats, buoyed by President Obama's recent re-election, believe that they have a mandate from the American public to demand higher tax rates from the country's wealthiest citizens, while the Republicans believe that reforms to entitlement programs and the tax code should be a key part of any deal.
To the surprise of no one, the Democrats and Republicans haven't been able to fashion a deal as of yet.
With time running out, President Obama has summoned Congressional leaders to the White House in the hopes of the two sides agreeing to a short-term deal that would allow the country to avoid the "fiscal cliff". Senator Harry Reid, Senator Mitch McConnell, House Speaker John Boehner and Representative Nancy Pelosi are set to meet with Obama later today.
There are rumors of a potential deal circulating that may include the extension of the Bush tax cuts for people making up to $400,000, as well as the extension of a number of other tax cuts. This deal apparently wouldn't deal with the issues of the automatic spending cuts or the need to increase the nation's debt ceiling - these issues would apparently be dealt with next year.
Can the Democrats and Republicans come together over the next few deals to pass a short-term deal to avoid the fiscal cliff?
Source: NYTimes.com - Narrower Tax Deal Floated as Lawmakers Sit With Obama
Filed under: General Knowledge