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Lawmakers Confident Of Deal To Avoid Fiscal Cliff

Congressional leaders on both sides of the aisle seem to think they can reach a deal to avoid the fiscal cliff coming at the end of the year:

(Reuters) – Leading U.S. lawmakers expressed confidence on Sunday that they could reach a deal to avert the “fiscal cliff” even as they laid down markers on taxes and spending that may make any agreement more difficult.

Republicans and Democratic leaders have agreed on a framework to reform the tax code and government benefit programs next year, but first need to prevent across-the-board tax increases and spending cuts due to begin in January that could push the economy back into recession.

That toxic $600 billion combination, known as the fiscal cliff, is the legacy of earlier failed budget deals. Both sides say they see greater willingness to compromise this time.

“What I hear is a perceptible change in rhetoric from the other side,” Dick Durbin, the No. 2 Senate Democrat, said on CNN’s “State of the Union” program. “And what it is is an invitation for our side to basically sit down and say, ‘What can we do for this country?'”

Taxes are the biggest hurdle.

President Barack Obama campaigned on a promise to raise tax rates on the wealthiest 2 percent of households, who have benefited more than the rest of the population over the past several decades as globalization and technology have transformed the U.S. economy. He wants to extend low tax rates for the bottom 98 percent of the population, but said he will not sign a budget deal that keeps low rates for the wealthiest in place.

Nancy Pelosi, the top Democrat in the House of Representatives, echoed this view. Though Republicans control the House, they will probably need Democratic votes to get any deal passed.

“If it’s going to bring in revenue, the president has been very clear that the higher-income people have to pay their fair share,” she said on ABC’s “This Week.”

A top Republican, Representative Tom Price, said his colleagues recognize the need to generate more tax revenue even as he said any tax-rate increase on the wealthy would lead to job losses.

Frankly, I can’t say that I have as much confidence as these leaders do. The best that I can see coming out of the lame duck session is something that kicks the can down the road at this point.

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About Doug Mataconis
Doug holds a B.A. in Political Science from Rutgers University and J.D. from George Mason University School of Law. He joined the staff of OTB in May, 2010 and also writes at Below The Beltway. Follow Doug on Twitter | Facebook

Comments

  1. Markey says:

    Can kicking time!

    Cause i can´t see that real Teahead zeal to shut the govt down over Obama´s re-election.

    Like or Dislike: Thumb up 2 Thumb down 0

  2. Tsar Nicholas says:

    When Social Security and Medicare inevitably go bust it’ll make the current dog & pony show regarding the putative “fiscal cliff” look like a coffee klatch at the country club.

    Like or Dislike: Thumb up 0 Thumb down 8

  3. Geek, Esq. says:

    Presumably the Republicans will cave on the tax issue, extract a fig leaf of spending cuts in return, and kick everything else down the road.

    Republicans will want to do as little as possible due to their weak bargaining position, and the Democrats will want to do as much as possible for the same reason.

    Like or Dislike: Thumb up 0 Thumb down 0

  4. LaMont says:

    Not only is can kicking not a solution, its actually has a negative impact on the economy as uncertainty would evitably coninue as a result. Any smart politicians (democrats) would understand that this is exactly what many onservatives would want to wrap around there necks come the 2014 elections. Only problem is their short-sightedness could very well doom them too as they are the incumbent party in the house. However, how much do you want to bet that many republicans would indeed like to see if their gerrymandering efforts in 2010 will hold in a real test in 2014?

    Like or Dislike: Thumb up 0 Thumb down 0

  5. gVOR08 says:

    If the kicking of the can involves real tax increases, thereby breaking Norquist’s pledge, then such can kicking is a major step forward.

    Like or Dislike: Thumb up 2 Thumb down 0

  6. rudderpedals says:

    Good. Deficit reduction is a fools errand tasked by people who maliciously chose not to understand how sovereign currencies work while disregarding the interaction between public sector expenditurs and private sector deleveraging..

    Like or Dislike: Thumb up 1 Thumb down 0

  7. C. Clavin says:

    If I were a Republican…and while I am Conservative in nature I’m not ignorant enough to be a Republican…but if I were a Republican…I would let the Bush Tax Cuts sunset as intended. Then I would start negotiating Tax Reform. That way everything would be a tax cut…and I wouldn’t have to take crap from that pin-head lobbyist, Norquist.

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