As of Friday night president Obama and House Speaker John Boehner have failed to produce an acceptable bipartisan ‘fiscal cliff’ compromise.
Friday Washington news confirms that neither has drifted far from the moorings of their respective political party’s dogma.
However, as of this posting, Obama remains ‘ guardedly confident’ that a compromise will be reached before end of year.
According to NBC News, president Obama has placed the task of resolving the fiscal cliff negotiation with the U.S. Senate. Rightfully so! The fiscal cliff dilemma came out of a bipartisan compromise forged through the Obama blockade Senate of 2011.
While some believe Obama intent on fiscally punishing the wealthy with higher federal income tax, he’s happy to lock current tax rates for those making less than $200,000 per year.
Boehner is insistent on extending so called ‘Bush Era’ tax cuts for those taxpayers earning less than $1million. Neither party has moved off of their respective benchmark.
As indicated by Friday’s close, Wall Street likes neither proposal.
The issue of ‘tax threshold’ is simply the tip of the fiscal iceberg when it comes to the 2013 federal budget. It makes easily digestible news for those that have little time to study the underlying issues of the fiscal cliff debate.
Bottom line: Obama has included $1.2 Trillion (10 years) in new stimulus spending, and $890 billion in income tax deferrals through the extension of the Bush tax cut. Obama insists that although the U.S. economy continues to show signs of recovery, further stimulus spending will be required to push the economy to prosperity.
House Speaker John Boehner, want’s deeper federal spending cuts before agreeing to any additional stimulus spending. From day one he’s stated that the Republican Party will not raise federal income tax.
Boehner and Party did concede to effectively raise income tax by eliminating tax loopholes, but Obama did not acknowledge the concession, and remained insistent as to raising the federal income tax rates on those he has labeled as wealthy. At one time the two were within $500 billion( over 10 years) of each-other in negotiations. Not good enough! Saving face is an expensive game in Washington politics. In this case, the tab is on the American people.
*It may be noted that neither proposal significantly reduces 2013’s projected $17 trillion federal budget deficit. It’s estimated that no more than $800 billion would be generated by raising taxes on America’s wealthy.