U.S. House Speaker John Boehner appears unable to tame his wayward Tea Party caucus that refuses to compromise, as the nation said in November it wants from its congressional leaders, with the White House and Senate Democrats in order to avoid the sharp spending cuts and higher taxes across the board that will hit on the first day of the new year.
Not all crap sandwiches are the same
President Obama cut short his holiday vacation in his birth state of Hawaii to fly back to Washington, where Friday he’ll meet with congressional leaders to avoid going over the so-called fiscal cliff, the combination of revenue and spending adjustments that were designed to be so hurtful that legislators wouldn’t allow to go into effect on January 1. As hurtful as it is—some say it will result in millions of lost jobs and an economy that tastes recession again this year—not addressing it could further harm unemployed workers and a fragile U.S. recovery from severe austerity measures embedded in the bill.
House Speaker John A. Boehner of Ohio announced Thursday that he would call the House back into session this weekend. Reports say the most significant development is that Senate Minority Leader Mitch McConnell of Kentucky will for the first time engage directly in talks with the White House.
But it wasn’t so long ago that then-House Minority Leader John Boehner in 2008 called the $700 billion Toxic Asset Relief Program or TARP a “crap sandwich” he didn’t like but that he would vote for for the good of the nation. Reports from the time said that Mr. Boehner, in a closed-door session with House Republicans, called the financial rescue deal a “crap sandwich” despite ultimately voting for it.
House Democratic Leader Nancy Pelosi of California said that it’s a “bipartisan” bill and that “bipartisanship” is needed to pass it. In 2008, House Republicans including Eric Cantor of Virginia and Paul Ryan, the Wisconsin conservative who ran and lost with Mitt Romney this year, did what they are unwilling to do now: vote for a spending bill of such giant proportions that it would be preposterous to think they would back such a bill now, especially with Democrats in the White House. Like John Boehner, Paul Ryan said of the situation in 2008, “This sucks.” But he and Boehner held their noses and voted for the “crap sandwich” bill.
Mr. Boehner advised his Republican members at the time that “the current economic meltdown is a bad situation – and a massive government intervention in the financial markets is regrettable response – but it’s their only option at this late stage in the crisis.
The bill ultimately failed in the House, 205-228, with 66 percent of the House GOP caucus not heeding Mr. Boehner’s to vote for it.
Uncertainty on Wall Street, Main Street
People paying attention include those on Wall Street, who may not like what the Republicans are doing to kick the can down the road further. Markets on Thursday could be harbingers of more uncertainty if GOP leaders continue to demand the White House, which won a national election for president less than two months ago, change its alignment of revenue raisers and spending cuts to reflect what Speaker Boehner and a majority of GOP House Members want before voting to agree to any deal with just three days remaining in this year.
Consumers, who of late have been regaining confidence, are showing that the unnecessary gridlock in Washington isn’t bolstering their confidence going forward. American consumers are worrying more about the economic outlook, according to a new report suggesting they have begun focusing on possible tax increases and government spending cuts in the new year, The Wall Street Journal reported. The Conference Board said Thursday its consumer confidence index fell six percentage points in December from a month earlier to 65.1, its lowest level since August. Added to another gauge, the Thomson Reuters/University of Michigan consumer sentiment index, which declined significantly, Americans are watching as Washington lawmakers stop and stumble on their way to an agreement that could forestall the economic austerity that will grip the nation for as long as leaders fail to come to an agreement.
According to Washington watchers at Politico, if the U.S. jumps off the fiscal cliff at the end of the month, which seems all but certain with just three days left, the fall will be measured by the depth and quality of the landing. If a deal is struck sometime in January to reinstate at least some of the Bush tax cuts and a patch is applied to ensure the alternative minimum tax does not slam the middle class, many economists say the damage would be limited.
With the old year ending, the Office of Personnel Management posted new guidance to federal workers for administrative furloughs on its Web site Thursday afternoon. The White House has continuously expressed confidence that the standoff between Democrats and Republicans would be resolved before a crisis hit and furloughs would be unnecessary, the Washington Post writes that the “guidance reflects the reality that little time remains on the calendar to avert the automatic cuts that will be triggered by a failure to reach a deal by the year’s end.”
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