How did we get so close but still end up so far away from a fiscal cliff deal?
Just a few days remain before the nation falls off the fiscal cliff, and expectations for an agreement have practically disappeared.
U.S. President Barack Obama and congressional leaders will meet today (Friday) to discuss ways to avoid the tax hikes and automatic spending cuts scheduled to kick in Tuesday, but not much is expected from the talks.
The nation’s focus has shifted from if we’ll avoid the cliff to what happens after we almost inevitably tumble off it.
A new Gallup poll found that Americans have become increasingly cynical that Congress can hammer out a deal by year’s end, given the time it takes to draw up and pass a bill of this size and scope.
Senate Majority Leader Harry Reid, D-NV, triggered alarms Thursday when speaking of the fiscal cliff and the little time left to avert it.
“It looks like [over the cliff] is where we’re headed,” Reid said on the floor Thursday.
Why Reaching a Fiscal Cliff Deal has Stumped Washington
Reid has been quick to place the blame for the lack of a fiscal cliff deal on House Speaker John Boehner, R-OH, suggesting that Boehner is more concerned about his political position than the intimidating position the country is in.
“John Boehner seems to care more about keeping his speakership than about keeping the nation on firm financial footing. He’s waiting until Jan. 3 to get re-elected as speaker before he gets serious with negotiations because he has so many people… that won’t follow what he wants,” Reid said.
Boehner spokesman Brendan Buck was quick to redirect responsibility to the Democratic leader, retorting, “Senator Reid should talk less and legislate more. The House has already passed legislation to avoid the entire fiscal cliff. Senate Democrats have not.”
While the GOP has made what it deems some generous concessions, namely agreeing on tax increases for those earning more than $400,000, Team Obama has rejected Republicans’ compromises, and Democratic counteroffers have fallen short of GOP expectations.
When addressing the Senate floor Thursday, Senate Minority Leader Mitch McConnell, R-KY, said that his party has “bent over backwards” in discussions.
But, he cautioned that “Republicans aren’t about to write a blank check for anything the Senate Democrats put forward just because we find ourselves on the edge of a cliff.”
Who Will be Stuck with Fiscal Cliff Burden
It now appears that the new Congress, the fresh class of 2013 set to be sworn on Jan. 3, will bear the burden of fixing the fiscal cliff fiasco.
But this political team will have a distinct advantage when talks pick up next year. Instead of bickering about tax increases, which will already have taken effect, these congressional lawmakers will have the benefit of arguing about tax cuts, a less troubling and more voter-friendly subject.
Furthermore, some analysts say going over the fiscal cliff just might be better than rushing a half-hearted deal.
The consensus among this bunch is that while we are likely to fall off the fiscal cliff, given that a deal is unlikely by New Year’s Eve, lawmakers on Capitol Hill will be able to cushion the fall if they act quickly, as anticipated, in January.
“Going over is likely because at this point both sides probably see a better deal on the other side of the cliff,” Vice President Joe Biden’s former economic adviser Jared Bernstein wrote in a blog post Thursday.
Yet even if a timely fix is put in place early next year, the slowly recovering U.S. economy is sure to feel a jolt that will ripple through ailing global markets.
While a full fiscal cliff impact might be cushioned, the nation will still get clipped.
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