In today’s edition of news on the fiscal cliff, President Obama met with congressional leaders for last minute talks, but none talked to the press afterward and time is running out on a deal. Sources informed reporters that the White House said it was not changing its offer. Meanwhile, the White House is denying it, but The New York Times is reporting that a scaled-down offer is being discussed with Congress. And in the Senate, some Republicans appear willing to accept a deal on both tax cuts and the estate tax. Finally, stocks fell for a fifth straight day on budget fears.
Obama Not Making New Fiscal Cliff Offer to Congress
[Reuters, 12/28/12] President Obama was not planning to make a new offer to avert the fiscal cliff, according to an administration source, and was set to ask lawmakers to hold a vote on a plan that would allow taxes to rise on those who earn $250,000 and up, and that would extend unemployment insurance benefits.
Narrower Tax Deal Floated as Lawmakers Sit With Obama
[New York Times, 12/28/12] The White House and congressional leaders are exploring a new, scaled-back deal that would prevent tax increases on income of $400,000 or below, prevent an expansion of the alternative minimum tax and extend other business tax cuts. It would not, however, stop sequester cuts. Here’s a handy bar graph of all the various offers.
Analysis: Cliff Diving Holds Perils for Obama’s Second-Term Agenda
[National Journal, 12/27/12] Obama’s second-term priorities such as immigration and gun control — not to mention a grand bargain on spending and revenue — could be pushed to the back burner if cliff negotiations drag into the new year. The saga could also slow Obama’s efforts to fill out his Cabinet and limit his political bandwidth to fight for controversial nominees.
Why They Want to Go Over the Cliff
[Politico, 12/28/12] Obama, House Speaker John Boehner, and Senate Majority Leader Harry Reid are locked in on a course for the cliff, and there’s no obvious solution that would make any of them switch direction — making the political game, for now, all about optics.
Wall Street to D.C.: Get Serious About the Fiscal Cliff
[National Journal, 12/28/12] Washington’s inaction on sequestration hasn’t been particularly surprising to Wall Street, but that doesn’t make the lack of progress any less maddening. And if Congress and the White House fail to act on the fiscal cliff by mid-January, the financial markets may react poorly. Stocks fell for a fifth straight day on Friday.
‘Fiscal Cliff’ Focus Shifts to Senate; Estate-Tax Extension Emerges as Key in Talks
[The Hill, 12/28/12] A critical mass of Senate Republicans appear willing to accept a deal that preserves most of the Bush-era tax cuts and maintains the estate tax in its current, watered-down form. But the estate tax may prove a sticking point for Senate liberals.
How Cliff-Jumping Could Play Out for the Economy
[National Journal, 12/28/12] Many economic forecasters say a brief slide off the fiscal cliff might not be catastrophic. The cliff is more like a slope, those experts say, and the most damaging effects won't be felt immediately — though they would be felt quickly.
The Fiscal Cliff Is Just an Early Battle in a War Dems Will Win
[The New Republic, 12/28/12] Noam Scheiber argues that despite what some conservatives believe, the fiscal long game mostly favors liberals.
How the Fiscal Cliff Will Force Big Biz to Turn Against Small Biz
[Time Magazine, 12/28/12] Unless Congress comes together to bring stability back to the fragile economy, big businesses will likely be forced to turn against small businesses, Scott Gerber argues, which will in turn force small businesses to turn against America’s best interests.
Tax Breaks for Households Are Big Fiscal-Cliff Question Mark
[Reuters, 12/28/12] Lost in the debate on the cliff is the fact that a lot of tax breaks, like those for education and adoption as well as the alternative minimum tax patch, are up for grabs.
Will GOP Allow ‘Bush Tax Cuts’ to Become the ‘Obama Middle-Class Tax Cut’?
[Washington Examiner, 12/27/12] Philip Klein argues that if the nation goes over the cliff, the outcome will be the worst of both worlds for Republicans: After a deal, taxes will go up on high-income earners and Obama will become the “great middle-class tax cutter.”