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From CBS news on November 21st. Just more general news on the subject.
Maybe it's best we do go off the cliff. We might get 2 or 3 quarters of negative growth,
a recession. But at least it wouldn't be a catastrophe, as might occur if all these spending
cuts and tax increases were put off. The 'pay a little now or lots later' theory.
Once rejected, Bowles-Simpson proposals back in play
(CBS News) WASHINGTON -- Two years ago the Fiscal Commission, chaired by Democrat Erskine Bowles and former Republican Sen. Alan Simpson, proposed every basic element of the fiscal cliff solution being discussed today.
Their plan was a mixture of higher taxes, lower spending and the reform of Medicare and Social Security. Both men told us that sacrifice has to come from everyone.
"All of us have to have some skin in the game to get it done," Bowles said.
"It's called, 'If you want something, pay for it,'" Simpson added. "It's a sick idea, but it is an interesting idea."
Their biggest idea was to increase revenue by combining both President Barack Obama's demand for higher taxes on the rich and the Republican proposal to get rid of tax loopholes. The Bowles-Simpson proposal would eliminate almost every tax deduction for individuals and corporations, with only a few exceptions for charity donations and home mortgage interest.
"This stuff goes to the wealthiest people in America -- 20 percent of the American people use 80 percent of that stuff," Simpson said.
"We have $1.1 trillion of loopholes, of backdoor spending, in the tax code," said Bowles. "And that's what we said -- let's start with a plan that wipes those out."
(There are 4 links below that will work if you go to the main link. See bottom of this post.)
Dickerson: Sides seek leverage on fiscal cliff negotiations
Honeywell CEO: U.S. must address Medicare, Medicaid
Bernanke warns Congress to avoid the fiscal cliff
Goldman Sachs CEO: Entitlements must be contained
The plan also called for deep spending cuts -- $200 billion a year -- and streamlined both the Pentagon and the federal bureaucracy. Medicare and Social Security would, over time, reduce benefits given to higher-income families.
"I think most people understand that Medicare has to be part of the deal, and most people believe today that you ought to do Social Security on a parallel track," Bowles said.
Both men blame the death of their report on lobbyists and warn that special interests are lined up again to fend off the budget cuts coming their way.
"Everybody is just like my momma, they are," Bowles said. "She turns to me and she says, 'Your daddy would be proud of you. You're putting our fiscal house in order. You have to stay at it. But don't mess with my Medicare.'"
Bowles-Simpson went nowhere two years ago, but its essential ideas are now back in play, and the basic tax reform it called for -- once politically impossible -- is being embraced by both parties today.
Update: Neither side wants to butcher its prize pig.
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"Fiscal cliff" clock ticks, political battle rages
December 3, 2012
Last week began with high hopes of "fiscal cliff" deal-making but ended with the reality that both sides are galaxies apart. Now the negotiations enter another time-sensitive week, and with few illusions as to where each side stands. The talks are going to have to move a great deal before a compromise can be reached.
This week, negotiations are expected to continue behind the scenes between the White House and Republican leaders. In addition, President Obama has a meeting scheduled Tuesday with several governors -- including Govs. Scott Walker, R-Wisc., and John Hickenlooper, D-Colo. -- as well as a speech on Wednesday to the Business Roundtable where he will focus on selling his side of the debate, a task that Treasury Secretary Timothy Geithner was charged with on the Sunday political shows.
The public posturing picked up on Sunday television where it left off at the end of last week, with politicians attempting to sell their sides of the story while evading any semblance of willingness to budge on their respective stances. And time is running out. There is less than a month before a series of automatic spending cuts and tax increases are set to go into effect, which economists predict will be devastating for the economy.
In his appearances on all five networks' Sunday political shows, Geithner laid out the White House's position, just as he did during meetings on Capitol Hill last week.
"There's no path to an agreement that does not involve Republicans acknowledging that rates have to go up for the wealthiest Americans," Geithner said on CBS News' "Face the Nation."
For the Republicans, House Speaker John Boehner defended his offer, which he called serious, and flatly rejected President Obama's proposal. "We've put a serious offer on the table by putting revenues up there to try to get this question resolved. But the White House has responded with virtually nothing. They've actually asked for more revenue than they have been asking for the whole entire time," Boehner said.
As far apart as Geithner and Boehner are, those are the current parameters: the GOP wants to extend all of the Bush-era tax cuts, which expire at the end of the year; the president wants to extend all but the cut for those making more than $250,000. In addition, the president's proposal would increase the estate tax to 45 percent. It's a plan that would total $1.6 trillion over 10 years, the White House says.
"The president is asking for $1.6 trillion worth of new revenue over 10 years, twice as much as he has been asking for in public," Boehner said Sunday. "It was not a serious offer."
Sen. Lindsey Graham, R-S.C., took the same position as Boehner and other Republicans who oppose increases to tax rates but are open to generating new revenue by limiting tax deductions. "I'll only do that if we do entitlement reform, and the president's plan when it comes to entitlement reform is just, quite frankly a joke," Graham, R-S.C., said on "Face the Nation."
The administration put forward a spending reduction proposal that is unacceptable to Republicans. In addition to $600 billion in cuts, which Geithner said includes minor changes to Medicare benefits for the wealthy in addition to reductions in farm subsidies, they pointed to $1 trillion of spending cuts Democrats agreed to support last year without any increases to revenue. Republicans laughed, literally.
"[T]hey wanted to extend unemployment benefits, they wanted a new stimulus program for infrastructure, they wanted to extend some other tax breaks," Boehner said of the White House's proposal. "And all of this stimulus spending would literally be more than the spending cuts that he was willing to put on the table."
Additionally, the White House wanted the ability to raise the debt ceiling without Congressional approval. "I've just never seen anything like it," Boehner added. "We're nowhere."
While the president's proposal -- minus a host of details regarding tax deductions and spending cuts -- is on the table, the Republicans' proposal is even more veiled. Geithner said Boehner needs to respond with an offer.
"[I]f they want to come back to us and say we'd like you to do this differently, do more of this, then they should lay that out for us," Geithner said.
When asked about specifics on "Fox News Sunday," including if he would propose eliminating the home mortgage deduction, Boehner told host Chris Wallace, "Listen, there are lots of ways to get out there. Now, I'm not going to debate his or negotiate with you."
As for spending cuts, Boehner, like the Democrats, looked to past Republican proposals. He said Republican ideas are laid out in the 2011 House budget drafted by Rep. Paul Ryan, R-Wis., which would make massive changes to Medicare and deep cuts to spending programs. It is a plan that did not get past the Senate.
Acknowledging the delicate dance that negotiators often plan when working to reach a deal, Geithner said he thinks a deal will be reached, but not before both sides play "a lot of political theater."
On CBS' "Face the Nation," economist Mark Zandi also sounded optimistic about both sides reaching a deal. "I think the political stars are aligned. The president has his legacy. He's a second-term president and I think he really wants to address this and I think the Republicans want to address it as well. So I think we'll get it together," he said.
Meanwhile, CBS News' political director John Dickerson pointed out the president feels like he is in a better position than Boehner. He won reelection running on raising tax rates on the wealthy and public polls suggest that Republicans would be blamed if a deal is not "You have Republicans trying to figure out their...place in the world," Dickerson said.
Despite the public gulf and the tough rhetoric from both sides, negotiations are still ongoing. And, as Zandi pointed out, the way this is all playing out shouldn't come as a surprise considering lawmakers are worrking with the politically-charged issues of taxes and entitlements while on a tight deadline.
"[T]hese are really big issues we're trying to nail down here," Zandi said. "It would be hard for me to believe that we could come to kumbaya over these issues.
"[I]f we nail this down - and...I think we will - we're going to be off and running."
Speaking of taxes on millionaires and billionaires (those making 200,000 or more) there is a new surcharge tax going into effect on Jan 1 for investment income. So, depending on how you report your taxes your going to be hit with another 3.8% tax on top of the capital gains tax. Dont look for a lot of loop holes because there is something like 115 pages of new tax regulation to make sure they get their money.
From the political grapevine: I have a friend in Washington who tells me there is talk of a Speculator Windfall Tax. That would cover everybody in this room who trades. It should be noted it is just talk at this point. As he puts it "If you make over a certain amount they want you the speculator, to pay more taxes because you unfairly benefited from trading the markets." This is how the Democrats are spinning it, he says. The worst part is they want to make it retro active back 2009. Ouch! Hope it stays just talk.
and the fun is just starting! My advice in negotiating with the president on the fiscal cliff would be to just walk away. Either way he has the political edge so you suffer regardless. I'd just walk away.
Two weeks left, Congress leaves the 21st and the 18th is the last day a bill can be introduced. Obama leaves for his annual vacation to Hawaii on the 17th.
I came across this a few days ago. I don't fully understand it, but it's here
for those interested about the cliff.
Dec 3, 2012
Republican Doomsday Plan: Cave on Taxes, Vote ‘Present’
Republicans are seriously considering a Doomsday Plan if fiscal cliff talks collapse entirely. It’s quite simple: House Republicans would allow a vote on extending the Bush middle class tax cuts (the bill passed in August by the Senate) and offer the President nothing more: no extension of the debt ceiling, nothing on unemployment, nothing on closing loopholes. Congress would recess for the holidays and the president would face a big battle early in the year over the debt ceiling.
Two senior Republican elected officials tell me this doomsday plan is becoming the most likely scenario. A top GOP House leadership aide confirms the plan is under consideration, but says Speaker Boehner has made no decision on whether to pursue it.
Under one variation of this Doomsday Plan, House Republicans would allow a vote on extending only the middle class tax cuts and Republicans, to express disapproval at the failure to extend all tax cuts, would vote “present” on the bill, allowing it to pass entirely on Democratic votes.
Infographic: The Fiscal Cliff
By doing this, Republicans avoid taking blame for tax increases on 98 percent of income tax payers. As one senior Republican in Congress told me, “You don’t take a hostage you aren’t willing to shoot.” Republicans aren’t willing to kill the middle class tax cuts, even if extending them alone will make it harder to later extend tax cuts on the wealthy.
Rep. Tom Cole, R-Okla., an influential conservative House Republican, is already on record supporting extending the middle class tax cuts — with or without the upper income tax cuts. On Sunday, he said Republicans should embrace the extension of the middle class tax cuts and take credit for it.
“That’s a victory, not a loss,” Cole said on This Week with George Stephanopoulos. ”And then we’re still free to try and fight over higher rates, offering revenue, which the Speaker has put on the table.”
Last week, Boehner said he disagreed with Cole. But now a version of what Cole has called for looks more and more likely to happen.
Still unclear under this plan is what would happen to the automatic defense cuts — “sequestration” — scheduled to go into effect on January 1 without a deficit deal. During the campaign, the President promised the cuts would not happen. As part of the deal to allow the House vote on taxes, those automatic defense cuts could be put off for a year.
Another update for those that are interested in this subject.
The no news is good news theory in action (from CBS's website).
Regardless, even if President Obama and House Speaker John Boehner agree on
whatever, is it really likely Boehner can sell it to the House republicans???
(CBS News) WASHINGTON, D.C. - It seems the closer we get to the "fiscal cliff," the less anyone In Washington is saying about it, and that could be a good sign. The president and the Speaker of the House are negotiating in earnest, not in public, for a change.
"Fiscal cliff" is the name given to the end-of-the-year tax increases for most Americans and big cuts in federal spending. There are just 13 days left to find a solution before the traditional congressional holiday.
President Obama and House Speaker John Boehner met at the White House this weekend alone, one-on-one, for the first time in about 18 months. The formal deadline for a deal on the "fiscal cliff" is just 22 days away, but there are a lot of people around here who are hoping it will happen even sooner.
If lawmakers want to settle this in time for Christmas, negotiations have to kick into high gear this week, and the president and Speaker Boehner must reach an agreement by early next week at the latest.
That's the only way members will have enough time to read it, debate it, and vote on it in the House and Senate before heading home for the holidays.
Obama back on the road with "fiscal cliff" pitch (link works IF you go to CBS page below)
Boehner and Obama meet on "fiscal cliff" (link works IF you go to CBS page below)
Complete coverage: The "fiscal cliff" (link works IF you go to CBS page below)
In a now-familiar routine, both sides blamed each other today for the slow pace of talks.
Senate Democratic Leader Harry Reid: "Right now, Speaker Boehner and Minority Leader (Mitch) McConnell are the only thing standing between Congress and compromise."
A spokesman for Speaker Boehner said in a statement: "The Republican offer made last week remains the Republican offer, and we continue to wait for the president to identify the spending cuts he's willing to make as part of the 'balanced' approach he promised the American people."
The White House and Speaker Boehner's office haven't revealed a single detail about the meeting on Sunday, and the members CBS News have spoken to are taking that as a good sign that the talks are getting serious and substantive, just in time.
This is the first new tax of many coming out of Obama Care. 
