Fiscal Cliff Notes for Dec. 17, 2012
14 days to the fiscal cliff
SIGNS OF FISCAL CLIFF MOVEMENT
While the attention of the nation is on the Sandy Hook gun massacre, there are some signs of movement on the looming fiscal cliff deadline. Whether this results in a deal by the Dec. 31 deadline is not clear. The outlines of a deal--dealing with revenues and spending cuts--could still need to be taken in two steps rather than one, with the second coming next year with a new Congress.
Because of the Sandy Hook tragedy, I do not expect much public posturing today--or for the next few days--as the nation mourns with the families in Connecticut. In a strange way, the muted atmosphere may contribute to the debt, deficit and revenue conversation--to get the fiscal cliff matters over with before a renewed debate on gun control begins.
There won't be any campaign-style fiscal cliff events from the White House for a bit.
A SUMMARY OF WHAT A DEAL MAY BE
From the Associated Press: The offer, made Friday after a long impasse between Boehner, R-Ohio, and Obama, calls for about $450 billion in revenue from increasing the top rate on million-dollar-plus income from 35 percent to the Clinton-era rate of 39.6 percent.
The additional revenue required to meet the $1 trillion target would be collected through a rewrite of the tax code next year and by slowing the inflation adjustments made to tax brackets.
In return, Boehner is asking for $1 trillion in spending cuts from government benefit programs like Medicare. Those cuts would defer most of a painful set of across-the-board spending cuts set to slash many domestic programs and the Pentagon budget by 8-9 percent, starting in January.
MOVEMENT ON DEBT LIMIT CEILING?
President Barack Obama is linking resolution of fiscal cliff tax-and-spending measures to his demand for Congress to getting rid of the debt ceiling. House Speaker John Boehner (R-Ohio) has said no way.
On Sunday night, after the Washington Post came out with a story that Boehner would--as part of a deal--suspend it for a year--his office issued an artfully worded statement:
"Folks - I know most of you are rightly covering the Newtown tragedy tonight. For those of you still paying attention to the fiscal cliff, a quick note on the debt limit. The Washington Post has pushed out a highly misleading story tonight. As you all have learned over the last two years, we have a single, simple principle when it comes to the debt limit: increases are tied directly to how much spending the President is willing to cut. This principle remains unchanged and should not surprise anyone who has covered this debate. If you're being asked to look into this - again, highly misleading - story, please feel free to use the quote here, which has been added:
"Our position has not changed," Boehner spokesman Michael S. Steel said Sunday. "Any debt limit increase would require cuts and reforms of a greater amount."
The lead from the Post:
"House Speaker John A. Boehner has offered to push any fight over the federal debt limit off for a year, a concession that would deprive Republicans of leverage in the budget battle but is breathing new life into stalled talks over the year-end "fiscal cliff."