President Obama, speaking in the White House today, urged the House of Representatives to pass the Senate bill and avoid taxes from going up on 98% of Americans on January 1. The President said “While there may be disagreement in Congress over whether or not to raise taxes on folks making over $250,000 a year, nobody — not Republicans, not Democrats — want taxes to go up for folks making under $250,000 a year. So let’s not wait.”
“In fact, the Senate has already passed a bill doing exactly this, so all we need is action from the House. And I’ve got the pen ready to sign the bill right away. I’m ready to do it, the President added waving a pen.” “I’m ready to do it.”
The Senate Bill the President spoke of would immediately extend the Bush tax cut rates for those who earn less than $250,000 a year. On January 1, the Bush tax cuts automatically expire unless extended by Congress. In addition, the Obama middle class tax cuts passed as part of the stimulus also expire as does the 2% payroll tax cut initiated by the president and Democrats in 2009. If these tax cuts expire, Americans will be hit with a major tax increase January 1, and that will set off another recession. This is called the fiscal cliff.
“That one step — that one step — would give millions of families — 98 percent of Americans and 97 percent of small businesses — the certainty that they need going into the new year,” President Obama said.” It would immediately take a huge chunk of the economic uncertainty off the table, and that will lead to new jobs and faster growth. Business will know that consumers, they’re not going to see a big tax increase. They’ll know that most small businesses won’t see a tax increase. And so a lot of the uncertainty that you’re reading about, that will be removed.”
Meanwhile back in the Tea House, Speaker John Boehner held a news conference and assured the public that Republicans would work with the President and Democrats in the Senate to avoid the fiscal cliff because it was important to the country. However, he cited one portion of the CBO study that said raising tax rates on the top 2% would cost 700,000 jobs hinting resistance to Obama’s proposal for raising taxes on the wealthy.
Boehner did say, however, that revenue was on the table but to pass the House, it would need to come from closing loopholes and eliminating deductions. Perhaps that is because nearly every Republican pledged their life, liberty, and sacred honor to Grover Norquist promising never to raise taxes.
Listening to Boehner’s speech carefully one thing sticks out. He continually referred to 2013 as the year Congress and the White House would come together to solve the nation’s debt and entitlement crisis. The fiscal cliff is now–2012. Unless he plans on getting this done on New Years Eve, it sounds like the fiscal cliff will arrive New Years Day. Maybe the Speaker is signaling that he needs the new Congress, not the existing one, in order to strike a compromise.
President Obama and John Boehner came close to a grand bargain last year. It fell apart at the last minute. What happened is that Boehner ran into resistance from the right wing Tea Party members of his own caucus. They would have killed the compromise he and Obama negotiated, and they would likely have replaced him with Eric Cantor (RTP-VA) as Speaker.
After the defeat of many Tea Party members of Congress, Representative Cantor seems to have moderated to a degree. He says he and Boehner are on the same page this time. Can he be trusted? Not likely. He is ambitious and power hungry.
Senate Republican leader Mitch McConnell (R-KY) said that there was absolutely no way Republicans would agree to raising taxes on anyone. It will be “our way or the highway” just like last year, he implied. His threat seemed to signal that Republicans would filibuster any bill coming from the House that increased revenue.
So, the clock is ticking. Will the gridlock in Washington persist, or will the government actually govern? We will see.
If you like this article share it, Tweet it, or follow me on Facebook.