Economy & Budget

Fiscal cliff update Dec. 13: White House risks stalemate

Fiscal cliff update Dec. 13: White House risks stalemate

18 days till the nation embarks into the abyss below the fiscal cliff. Congressional and White House officials continue to hit proposals back and forth, like an unwieldy and dangerous tennis match.

While Republicans make the reasonable point that entitlements and spending need to be curbed, Democrats, such as Rep. Sheila Jackson-Lee of Texas, argue that these programs are a necessary part of American life, indeed one that is earned. It appears that it is going to be a long and arduous road to bring about any sensible reform to the out of control spending that builds dependency, rather than independence and responsibility.

As we enter yet another day of what incessantly appear to be stalled negotiations with an impertinent president, who is unwilling to negotiate in any seemingly constructive way, it’s important to ask whether Obama is overestimating his re-election mandate.  Grover Norquist, the president of Americans for Tax Reform, does just that in his exclusive op-ed.  In fact, Norquist predicts that President Obama’s obstinacy in seeking to raise taxes will only instigate the rise of a stronger — and much more annoyed — Tea Party.  The president’s every move during these fiscal cliff discussions has the aire of being very politically calculated, but perhaps Norquist’s prediction is one aspect the administration has overlooked.

Another notable facet of the fiscal cliff debacle is the revolt brewing within the House GOP after leadership swept many conservative members from important committee assignments. Not only is there the possibility that Speaker John Boehner (R-Ohio) may have difficulty holding onto the speaker’s office, but there is also the rift in the Congressional GOP, which would make the passage of any fiscal cliff bill a riotous affair, unless the legislation includes significant entitlement and tax reform.

For now, however, talks are stalled, and it does not look promising that anything will get done before Christmas. As always, the latest news and analysis below:

Fox News: House Republicans Lack Faith in Obama Promises of Future Reform
House Republicans have found themselves in a terrible bind: They are looking to trade a tax increase for cuts to politically popular entitlement programs. They risk losing their brand on taxes in exchange for as-yet-unseen Democratic willingness to tackle bankrupt entitlement programs, a risky political two-step that could leave the GOP in the lurch for the midterm cycle. The tax hikes hurt with primary voters and the calls for benefit reductions hurt with general election voters. Many in the camp of House Budget Committee Chairman, and 2012 GOP Vice Presidential nominee, Paul Ryan feel a patriotic urge to do something – anything – on Medicare now, if only to set a precedent for future bipartisan reforms and start unwinding the coming fiscal apocalypse when huge debts and Baby Boomer retirees collide in coming years.

AP: Boehner: White House risks fiscal cliff stalemate
House Speaker John Boehner says the White House is so resistant to cutting spending that it is risking pushing the country off the “fiscal cliff.” In remarks he prepared to deliver to reporters on Thursday, the Ohio Republican says President Barack Obama has not been serious about controlling spending, which Republicans say is the source of government’s budget deficit problems. Boehner says Obama wants far more in tax increases than on spending reductions, and says the president’s refusal to control spending is why talks between the two men have failed to reach an agreement so far.

WSJ: Spending-Cut Proposals Drawing Democratic Flak
One big question in Washington’s budget talks is whether Republicans will make more concessions on taxes. This week, the counterpoint has started to come into play: What will Democrats swallow on spending cuts? The prospect of cuts to Medicare and other entitlement programs is making many Democrats anxious. Of particular concern is Republicans’ call for increasing the eligibility age for Medicare from 65 to 67, an idea that could split Democrats. As budget talks with the GOP drag on, President Barack Obama has been quietly sounding out Democratic leaders about spending-cut options, while his top aides work rank-and-file party members. Mr. Obama has said he’s willing to make decisions Democrats will find difficult if Republicans will bend on tax rates, but so far he has insisted Republicans first agree to raise rates for the top

Human Events: Norquist: Dems attacked Bush in ’92 ad for taxes he raised with them in ’90
The ad was titled “The George Bush promise.” The man who founded Americans for Tax Reform in 1985 told Human Events the 1992 attack ad Democrats used against President George H. W. Bush is a warning to Republicans eager break their pledge not to raise taxes. “Seeing the ad again, I was just reminded that when you break the pledge, you don’t just open yourself to a Republican primary,” said Grover G. Norquist, the ATR founder and president. “You hand your most devastating political weapon to your Democratic opponent on an issue that goes straight at the heart of your credibility and your reliability.”

WaPo: ‘Fiscal cliff’ talks show no progress; hope dims for a deal before Christmas
Washington stumbled closer to the “fiscal cliff” Wednesday as President Obama and congressional Republicans dug in further on their positions on taxes, even as no face-to-face negotiations took place.  With hope fading for a deal before Christmas, House Speaker John A. Boehner (Ohio) told his Republican colleagues to prepare for a holiday season of tense negotiations in Washington.  He told reporters of a “deliberate call” he had with Obama on Tuesday evening after each man rejected the other’s latest offer.

NYT: Boehner Tries to Contain Defections on Fiscal Unity
Speaker John A. Boehner moved Wednesday to maintain Republican unity on deficit reduction talks as lawmakers on the far right openly chafed at his leadership and some pragmatists pressed for quick accommodation on tax rate increases on the rich. Other lawmakers and aides to the speaker maintained that Republicans, both in the leadership and in the broader Republican conference, remain strongly unified behind Mr. Boehner as he tries to reach a deal with President Obama to stave off a potential fiscal crisis less than three weeks away.

AP: No budging as fiscal cliff talks appear stalled
Republicans aren’t budging on tax rates, and Democrats are resisting steps like raising the eligibility age for Medicare. Negotiations on averting a year-end fiscal train wreck combining big automatic tax hikes and sweeping spending cuts again appear stalled. There are less than three weeks before the government could careen off this “fiscal cliff,” but the chief GOP negotiator, House Speaker John Boehner, R-Ohio, said Wednesday that “serious differences” remain between him and President Barack Obama after an exchange of offers and a pair of conversations this week.

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