Meeting behind closed doors to resolve the fiscal cliff
Washington (CNN) - After cameras left the photo-op of President Barack Obama and congressional leaders at the White House on Friday, the actual meeting got under way with the president explaining how he would like to resolve the fiscal cliff and tackle deficit reduction. House Speaker John Boehner went next and so on, until Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi all spoke, a source familiar with the discussion said.
But after that, according to the source, the perfunctory stating of now well-known positions gave way to a free-flowing discussion about how to deal with the fiscal cliff.
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No fireworks, no drama and no lines drawn on how to tackle the problem.
“When the president raised (the issue of increasing) revenue, there was no, ‘no, we’re not moving we’re not doing that,’ and when Republicans raised entitlement reform the president agreed it was needed as part of package that included revenue,” the source said.
While specifics weren't agreed on in the Roosevelt Room, leaders are beginning negotiations already closer to an agreement than during the debt ceiling negotiations last year as Republicans are publicly willing to consider raising revenue, resigned to the fact that they must stop the fiscal cliff of tax increases and spending cuts from kicking in at the new year while tackling deficit reduction through spending cuts, entitlement reform and tax reform.
The White House is encouraged that the four congressional leaders stood together outside the West Wing to voice their support for finding agreement on a tough issue, a bipartisan showing unseen in recent years.
So, what does a deal look like? Some key details are unclear: for instance, how to raise tax revenue. The White House and Democrats want to increase income tax rates on the highest earners. Republicans prefer to look at closing loopholes and eliminating deductions and tax credits.
Both sides will have to, in the end, swallow what they consider bitter pills. This is expected to be a bill that requires both Democratic and Republican votes to pass Congress, which you just haven't seen on many pieces of key legislation in recent years.
The other outstanding issue is how to avoid Fiscal Cliff 2.0.
The White House and Congress must find a way to avoid the fiscal cliff - the tax increases and spending cuts set to kick in at the end of the year - in the near term. Next year they're expected to tackle the bigger items of tax reform, entitlement reform and spending cuts in order to reduce deficit spending. Sources say they will likely link the two by passing a bill to avoid the fiscal cliff that includes a "trigger," a consequence that kicks in if they don't act on deficit reduction. But the fiscal cliff was the trigger linked to increasing the debt ceiling in the deal the White House brokered with Congress last summer. So how can we be sure we don't end up here all over again? Maybe we can't.
I really hope they're able to work together on this. It's the first sign of hope in ages. That's what most of us "independent" voters wanted out of Pres Obama, both sides to work together and stop putting their parties and themselves first. It'd be great to shorten campaigns to 6 weeks, and figure out how often somebody votes just along party lines... anyone who can't work with the other side effectively should be voted out. Doesn't fly in the workplace, and shouldn't fly in DC. It'd be a great way to get some real work done.
Who will dive over the fiscal clift first and when.
Marxist Obama? What a joke. The stock market, that most non partisan of entities is up one hundred percent since March of 09 just a few weeks after he took office. It was the Republicans that almost killed our capitalistic economy. Guess that makes them the Marxists.
I am of the same opinion. Congress, while posturing that citizens and public services should expect revenue reductions, numbly gloss over the entitlement expenses that they exact at the public expense. It reminds us of the pre French Revolution aristocratic class that enjoyed immense wealth and privilege while the lower class starved. Anyone interested in forming a citizens participation group to formulate and work toward enactment of legislation to accomplish limits on salary levels and benefits to Congress?
Behind close doors does that mean only the demo and a select few GOP. We need all involved and not just Democrats to dictate what they want. They all have to work together. Let them start with pay cuts and no automatic raises. They need to make some cuts also.
Wow. So much negativity about a very positive story. I for one hope that both sides (one more so) have learned that compromise isn't a dirty word. And Not Thinkingweknowwhatrunsdownstream? I am very glad you were never my doctor.
That was very nice of Obama to do that. Now I suppose it's time for Boehner to return the favor by stabbing him in the back, just like in '011.
The "fiscal cliff" is a term that means the repubs lose their strangle hold on this economy growing. Democrats really don't have to do anything. Thank god let this country grow.
One way of raising revenue and creating more jobs would be to tax U.S. companies for every H-1B or L1 visa holder that is working in the U.S. and also for any jobs that are being performed overseas that could be done here. In that way we either get the revenue from those jobs or they get filled by a U.S. worker. All the time I hear from American firms "These are global companies". Well, these are American sons and daughters that are protecting your interests. If you want them to protect your companies, you should protect their jobs and wages.
So much anger and vitriol and excessive implications of a lack of integrity on both Republicans and Democrats. If the latter have no integrity, inadequate morals... how on earth did so many thousands of voters get so badly fooled? The answer is they were not.
To get reality back on the table, to me its simple Obama insists on tax rates going up on those earning over $200 or $250 k... other wise its hello the fiscal cliff.
The initial offer to Republicans is we also will put on the table now ( with above income tax change) a 28 % corporate tax rate and we'll work together to eliminate tax breaks or loopholes to cover the cost of that change.
Then whats left we'll look into Bowles Simpson and spending and then entiltlements to hit the $1.2bn of cost cuts Or more along with passing the balance of AJA.
That is a fair deal as all small business tax cuts can be retained.
Any shortfall on this latter item is taken up or achieve by applying reduced Budget Act sequestration... this last bit will really concentrate the minds of both parties especially the Tea part guys.
Regards,
Hodgson
I blame Clinton for cutting many things to get money in his term and I blame Dobbs and Frank...I also blame Bush...But right now Obama is not helping...we voted the wrong man in office...Yes his social ideas are amazing..but thats not what we need to focus on..people will still be gay, still have abortions, still fight religion, ect...we need to focus on the fiscal problems in this country and this man was not the choice for this!!
There is roughly a 16 Trillion dollar aggregate national debt and a roughly 1 Trillion dollar per YEAR shortfall or Deficit. 1 Trillion dollars is a Billion dollars times one thousand.
The bipartisan Simpson Bowles report suggests reducing the dept by roughly 25% ( 4 Trillion )over a 10 year period. Some economists suggest a 5 Trillion reduction over 10 years and others suggest 10 Trillion over 10 years. A smaller number of well known economists suggest "micro" reductions in the debt of less than 1% ( 100 or 200 Billion ) over the same period. The theory being that the mere agreement to a plan will be of sufficient perceptive or macro psychological stimulation to the economy to improve business revenue and by extension raise tax revenue. A theory of self fulfilling prophecy to use another term. David Stockman, President Reagan's director of OMB favored such an approach which became known as "supply side" economics.
Before any national conversation regarding the specifics and mechanics of addressing this problem it would serve the Public good if the principle negotiators could at least agree to a debt target goal a time range. If indeed agreement can be reached on a debt target and time period further discussion can unfold regarding the ratios of implementation. ( what fraction from revenue and what fraction from expense reform ).
At this time the mass e-mails and missives generated from opposite sides of the political spectrum which posit that the solution comes from either 100 % spending control or alternatively 100% revenue reform do not advance a meaningful pathway to the solution of this problem
Israel is nothing but BS. Let middle east deal this–all this while USA involvement caused all this havoc on USA treasury. Hats off to OBAMA, the best president ever in American history. Time tells us this thus.
Cliff : another myth.
Government spending never goes down..just the reduction of an increase...
Income taxes do not apply to the majority of Americans.
It was exactly the right thing to do.
You've heard of the olive branch.
We have seen that Obama and congress cannot achieve a meaningful comprises, yet we reelected both. Four more years of deadlock to come!