* Little sign of movement in talks * Focus shifting to Congress acting after Jan. 1 By Thomas Ferraro and Richard Cowan WASHINGTON, Dec 23 (Reuters) – Some U.S. lawmakers voiced concern on Sunday that the country would go over “the fiscal cliff” in nine days, triggering harsh spending cuts and tax hikes, and some Republicans charged that was President Barack Obama’s goal. “It’s the first time that I feel it’s more likely that we will go over the cliff than not,” Senator Joe Lieberman, an independent from Connecticut, said on CNN’s “State of the Union.” “If we allow that to happen it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history.” “It looks like to me that obviously this is going to drag on into next year, which is going to hurt our economy,” Republican Senator Bob Corker of Tennessee said on CBS “Capitol Gains.” The Democratic president and Republican House of Representatives Speaker John Boehner, the two key negotiators, are not talking and are out of town for the Christmas holidays. Congress is in recess, and will have only a few days next week to act before Jan. 1. On the Sunday TV talk shows, no one signaled a change of position that could form the basis for a short-term fix, despite a suggestion from Obama on Friday that he would favor one. The focus was shifting instead to the days following Jan. 1 when the lowered tax rates dating back to President George W. Bush’s administration will have expired, presenting Congress with a redefined and more welcome task that involves only cutting taxes, not raising them. “I believe we are,” going over the cliff, Republican Senator John Barrasso of Wyoming said on Fox News Sunday. “I think the president is eager to go over the cliff for political purposes. I think he sees a political victory at the bottom of the cliff.” Some Republicans have said Obama would welcome the fiscal cliff’s tax increases and defense cuts, as well as the chance to blame Republicans for rejecting deal. Obama has rejected that assertion. Democrats have charged that Boehner has his own self-interested reasons for avoiding a deal before Jan. 3, when the House elected on Nov. 6, is sworn in and casts votes for a new speaker. Democratic Senator Charles Schumer of New York said on NBC’s “Meet the Press” that Boehner has been reluctant to reach across the political aisle for fear it could cost him the speakership when he runs for re-election. “I know he’s worried,” said Schumer. Boehner, who so far has no serious challenger for the job of speaker, has said that he has no such concerns. Such finger pointing has been under way since Congress returned after the election, but it has gained intensity in the past few days, with the heightened prospect of plunging off the cliff. Congress started the clock ticking in August of 2011 on the cliff. The threat of about $600 billion of spending cuts and tax increases was intended to shock the Democratic-led White House and Senate and the Republican-led House into bridging their many differences to approve a plan to bring tax relief to most Americans and curb runaway federal spending. Economists say the harsh tax increases and budget cuts from the fiscal cliff could thrust the world’s largest economy back into a recession, unless Congress acts quickly to ease the economic blow. MARKETS COULD TUMBLE The most immediate impact could come in financial markets, which have been relatively calm in recent weeks as Republicans and Democrats bickered, but could tumble without prospects for a deal. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will be closed on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the week with scores of market participants away on a holiday break. If Congress fails to reach any agreement, income tax rates will go up on just about everyone on Jan. 1. Unemployment benefits, which Democrats had hoped to extend as part of a deal, will expire for many as well. In the first week of January, Congress could scramble and get a quick deal on taxes and the $109 billion in automatic spending cuts for 2013 that most lawmakers want to avoid. Once tax rates go up on Jan. 1, it could be easier to keep those higher rates on wealthier taxpayers while reducing them for middle- and lower-income taxpayers. Lawmakers would not have to cast votes to raise taxes. Some lawmakers expressed guarded hope that a short-term deal on deficit reduction could be reached in the next week or so, with a longer, more permanent deal hammered out next year. But a short-term deal would need bipartisan support, as Obama has said he would veto a bill that does not raise taxes on the wealthiest Americans. Democratic Senator Kent Conrad, chairman of the Budget Committee, said Obama and Boehner are not that far apart and that both sides should keep pushing for a long-term big deal. “I would hope we would have one last attempt here to do what everyone knows needs to be done, which is the larger plan that really does stabilize the debt and get us moving in the right direction,” Conrad of North Dakota told Fox News Sunday. But most Republicans are now looking past Jan. 1 to what they consider their next best chance of leveraging Obama for more cuts in the Federal budget – a fight over the debt ceiling expected in late January or early February. At that time, the administration will need Congress’ authorization to raise the limit on the amount of money the government can borrow. “That’s where the real chance for change occurs, at the debt-ceiling debate,” Republican Senator Lindsey Graham of South Carolina said on “Meet the Press.”Read More…
More on Fiscal Cliff
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A video published on CNN shows a a card-carrying member of the National Rifle Association as he destroys the small rectangle of paper that associates him with the organization. “This is my NRA club card,” he says. “I want to show you my tribute and how outraged I am that the loss…
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Hundreds of civil servants protested in Athens against new austerity measures as part of a a 24-hour strike called Wednesday by unions that paralysed public services and disrupted transport. Wednesday’s action grounded flights for six hours, left trains operating on emergency schedules and…
Republicans Likely to Stick With Medicare Cuts Romney Criticized
Mitt
Romney’s presidential campaign featured frequent attacks on
President Obama for cutting $716 billion out of Medicare. Romney
made
ads criticizing the president for the cuts, and pegged Obama as
the only president who has cut Medicare. “When you see your friends
with signs that say keep your hands off our Medicare,” Romney
said ;last
year, “they are absolutely right.”Well, anyone who liked that
line ;may be disappointed. The cuts are back. And this time
it’s Republicans who are proposing them. Again. ;
The attacks were politically convenient, and seemed with
resonate with seniors. But they never made much sense. In part
that’s because Romney was simultaneously pretending to be running
as someone who wanted to cut spending and reform health care
entitlements. An even bigger reason, though, is that Romney’s own
running mate, Rep. Paul Ryan, the GOP Chair of the House Budget
Committee, had proposed those exact same cuts in budgets that he
and most of the House Republicans had voted for.
Romney promised to nix Obama’s Medicare cuts, and restore
spending to the program. ;But now it looks like Rep. Ryan will
once again propose to keep those cuts in place. The Hill
reports that Republicans on the Budget Committee expected that
the cuts will remain in the next GOP budget, despite their
prominence in the campaign. ;
Stories like these tell you something about the lack of a strong
policy vision in the Romney campaign, as well as the willingness of
other Republicans to follow along, despite the campaign’s
weaknesses. More than that, they ;offer a reminder that
Romney’s line of attack was always a gamble for entitlement
reformers. And at this point it’s clear that it was one that didn’t
pay off. ;
No, Romney wasn’t the first Republican to run against cutting
Medicare, and I suspect he won’t be the last. But Romney’s attacks,
combined with his frustratingly non-specific Medicare reform
proposal, helped position the GOP as a party defending
against cuts and changes to Medicare. The party that won’t
make cuts, that wants the government to keep its hands off
Medicare, not the party that wants to transform and reform the
nation’s biggest long-term fiscal problem. ;
In this case, I suspect that Republicans will just ignore what
Romney said during the campaign and proceed to include the $716
billion in cuts in future budgets. But I also suspect that if the
time comes to negotiate more substantial Medicare reform, the GOP
will have Romney’s words thrown back at them. ;
Fiscal Cliff Progress Suffers As Republicans, Democrats Remain Divided
By Mark Felsenthal HATFIELD, Pa., Nov 30 (Reuters) – With barely a month left before the “fiscal cliff,” Republicans and Democrats remained far apart on Friday in talks to avoid the across-the-board tax hikes and spending cuts that threaten to throw the country back into recession. While President Barack Obama visited a Pennsylvania toy factory to muster public support for tax hikes on the rich, portraying Republicans as scrooges at Christmas time, his primary adversary in negotiations, Republican House Speaker John Boehner, continued to describe the situation as a stalemate. The argument will resume on Sunday when Boehner, along with Obama’s Treasury secretary, Timothy Geithner, and others, take to weekly political talk shows and pick up further steam next week with a possible confrontation in the House of Representatives between Democrats and Republicans over the timing of a vote on tax hikes. Lawmakers are nervously eyeing the markets as the deadline approaches, with gyrations likely to intensify pressure to bring the drama to a close. The markets, in turn watching the politicians, fell as Boehner spoke, but recovered afterward. It was a repeat of the pattern earlier in the week when the speaker offered a similarly gloomy assessment. The latest round of high-stakes gamesmanship focuses on whether to extend the temporary tax cuts that originated under former President George W. Bush beyond their Dec. 31 expiration date for all taxpayers, as Republicans want, or just for those with incomes under $250,000, as Obama and his fellow Democrats want. After five days of increasingly confrontational exchanges, the work week drew to a close with an announcement by Democrats of a long-shot effort next week to force an early tax-hike vote in the Republican-controlled U.S. House to break the deadlock. MEDICARE, SOCIAL SECURITY House Minority Leader Nancy Pelosi said she would undertake the rarely successful effort unless Boehner agreed by Tuesday to bring a bill to the floor allowing taxes on the wealthy to rise, something Boehner is highly unlikely to do until he is ready. “The clock is ticking,” Pelosi said at a news conference. “The year is ending. It’s really important with tax legislation for it to happen now. We’re calling upon the Republican leadership in the House to bring this legislation to the floor next week.” While Boehner offered no immediate response to Pelosi’s threat, Cathy McMorris Rodgers of Washington state, recently elected by Republicans to be the fourth-ranking party leader in the House, told Fox News in an interview not to expect any tax vote next week. Amid the competing statements from the two sides, there were some actual, albeit modest, signs of potential movement. Senate Minority Leader Mitch McConnell threw Republican proposals into the mix for reform of Medicare, the government health insurance program for seniors, which has exploded in cost in recent years and is a major contributor to the country’s soaring deficit. McConnell of Kentucky told the Wall Street Journal in an interview that Republicans would agree to more revenue – although not higher tax rates – if Democrats agreed to such changes as raising the eligibility age for Medicare and slowing cost-of-living increases in the Social Security retirement program. Rodgers, in her Fox News interview, declined to completely rule out a much-discussed potential compromise in which Republicans would accept some increase in tax rates on the rich, but not to the level desired by Obama. ‘A LUMP OF COAL’ More House Republicans – although still just a handful -expressed flexibility beyond that of their party leaders about considering an increase in tax rates for the wealthy, as long as they are accompanied by significant spending cuts. Most House Republicans refuse to back higher rates, preferring to raise revenue through tax reform. Obama, speaking in Pennsylvania, said he was encouraged by the shifting views of some Republicans, and urged House approval of a bill that has already cleared the Democratic-controlled Senate that would lock in the middle-class tax cuts and raise the rates for the rich. “If we can get a few House Republicans on board, we can pass the bill. … I’m ready to sign it,” Obama said. But neither he nor the other principals in the debate budged from their basic positions. Instead, Obama turned up the pressure on Friday, hitting the road to drum up support for his drive to raise taxes on the wealthy and warning Americans that Republicans were offering them “a lump of coal” for Christmas. In a visit to the Pennsylvania toy factory, Obama portrayed congressional Republicans as scrooges who risked sending the country over the fiscal cliff rather than strike a deal to avert the tax increases and spending cuts that begin in January unless Congress intervenes. “We already all agree, we say, on making sure middle-class taxes don’t go up. So let’s get that done. Let’s go ahead and take the fear out for the vast majority of American families so they don’t have to worry,” Obama said at the Rodon Group factory, which makes K’NEX building toy systems as well as Tinkertoys and consumer products. In Washington, Boehner said Obama’s plan to raise taxes on the rich was the wrong approach. “There is a stalemate. Let’s not kid ourselves,” the Ohio Republican said. “Right now we are almost nowhere.”Read More…
More on Bush Tax Cuts
Fiscal Cliff Talks: House, Senate Sit On Tax Bills The Other Passed
WASHINGTON — It may not sound like it from the rhetoric, but both the House and Senate already have passed separate bills to delay big tax increases awaiting nearly every taxpayer next year if Congress and the White House can’t agree on a plan to avert the “fiscal cliff.”The Democratic-controlled Senate passed a bill in July that would extend many of the expiring George W. Bush-era tax cuts for middle-income families, while letting tax cuts end for individuals who make more than $200,000 and married couples making more than $250,000.Read More…
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The Bush Tax Cut Issue in One Chart
Federal outlays and receipts in the last two years of the
Clinton Administration, all eight years of George W. Bush and
Barack Obama’s first term:
In 2011, income tax revenue made up about 55 percent of federal
receipts. Raw data
here and
here
A few notes: George W. Bush and supporters of the tax cut said
federal revenue would go up after passing the cuts and it appears
it did. In fact, federal receipts reached Clinton-era levels
without Clinton-era tax rates in 2006, not long after all the cuts
went into effect (passed in 2001 and 2003, they were tweaked with
in 2005). Bush passed a tax cut as stimulus in 2008 and Barack
Obama’s trillion dollar stimulus package in 2009 included some type
of tax cuts as well, but does that chart look like a revenue
problem or a spending problem?
And for those who would say “well of course the government has
to spend more when the economy is hurting” only one question
applies: has it helped? If you think so, I’ve got a tiger-repellant
rock to sell you.
