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Fiscal Cliff Notes for Dec. 29, 2012
2 days to the fiscal cliff
SPOTLIGHT ON REID AND MCCONNELL
The fiscal cliff ball Saturday is in the hands of Senate Majority Leader Harry Reid (D-Nv.) and Minority Leader Mitch McConnell (R-Ky.) who are trying to work out a compromise they can present to their members on Sunday.
It’s Saturday and the Senate is at rest and House members are traveling back to Washington in order to be on the job by 6:30 p.m.Sunday.
From McConnell spokesman Don Stewart: “While the House already passed legislation in August to prevent tax hikes (a proposal Sen. McConnell supports), the President and Congressional leaders (Friday) agreed that the Senate must now act. This will require a bipartisan approach. Members of the Senate will continue to work toward producing a bipartisan package in a timely manner to protect American taxpayers and jobs from a massive tax hike in January.”
Weather report: Overcast and rainy today, Sunny Sunday. An omen?
On CNN Saturday morning, former FDIC chair Shelia Blair is predicting a deal–with a heavy dose of kicking the can down the road when it comes to meaningful tax reform and deficit reduction. She also predicts Congress will mothball the payroll tax break all earners have been getting for the last two years but will make permanent the tax breaks. The breaks Congress are wrestling with now were put in place starting in 2001 under former President George W. Bush–and reluctantly extended by President Barack Obama in 2010.
As I wrote in my Friday column about the payroll tax:
“If Congress does nothing by Dec. 31, then everyone faces federal income tax hikes in 2013 and a series of spending cuts — spread over 10 years — kicks in. Even with a deal, by the way, paychecks will be smaller in 2013 because no one in Congress or the Obama White House is talking about extending the payroll tax cuts in place for the past two years, letting you keep more of your money because of reduced payments for Social Security.”
OBAMA SATURDAY ADDRESS: MEET THE DEADLINE
Obama’s Saturday address is a rewrite of the Friday statement he made after meeting with the four leaders at the White House. (click below for the entire transcript)
“We just can’t afford a politically self-inflicted wound to our economy. The economy is growing, but keeping it that way means that the folks you sent to Washington have to do their jobs. The housing market is healing, but that could stall if folks are seeing smaller paychecks. The unemployment rate is the lowest it’s been since 2008, but already, families and businesses are starting to hold back because of the dysfunction they see in Washington.
“You meet your deadlines and your responsibilities every day. The folks you sent here to serve should do the same. We cannot let Washington politics get in the way of America’s progress. We’ve got to do what it takes to protect the middle class, grow this economy, and move our country forward.”
SEN. ROY BLOUNT DELIVERS GOP SATURDAY ADDRESS: FISCAL CLIFF FALL “AVOIDABLE”
Sen. Roy Blount (R-Mo.) in the GOP Saturday address gets to the heart of the disagreement with Obama. Obama wants to let taxes rise on top earners; Republicans do not.
From Blount: “The President’s proposal to raise taxes on the top 2 percent of Americans won’t even pay one-third of the annual interest that’s now owed on this massive $16 trillion debt. In fact, the President’s tax hike would only fund the government for eight days. Americans deserve to know: What does the President propose we do for the other 357 days of the year?
“Inaction shouldn’t be an option. The problems facing our country are big, but they’re not necessarily all that complicated. The President will never have more political capital than he does right now, and the next few days will begin to define his second term. He was elected to lead.
“We still can avoid going over the fiscal cliff if the President and the Democrat-controlled Senate step forward this week and work with Republicans to solve this problem and solve it now.”
Click below for Blount transcript.