Fiscal Cliff Notes
Meeting One: The Triumph of Hope Over Experience?
Friday, November 16, 2012 - 12:12pm
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Saying he was ready for “touch compromises,” President Obama began talks with congressional leaders today on a possible deficit-reduction deal that would prevent the country from going off the “fiscal cliff.” After what was a hopeful and positive one hour meeting, the key congressional leaders held a briefing.  Nancy Pelosi says we have to have cuts, Mitch McConnell says we’re going to put revenue on the table—that’s a good first step in today’s  first congressional meeting on the fiscal cliff.  After another steep dip in the markets this morning, stocks are turning around on the positive press briefing by the four key leaders, including House Speaker John Boehner and Senate Majority Leader Harry Reid.  Before the briefing the DJIA was down around 50 points.  As of noon, it’s up 25.  -   Read more at CNBC

THE CLIFF WILL COST CASH-STRAPPED ILLINOIS $1 BILLION  If Congress and the president do not cut a deal to avoid massive spending cuts and tax hikes set for the beginning of next year, Illinois’ $8 billion in overdue bills could increase by an additional $1 billion or more, state officials said Thursday.
The $1 billion estimate only takes into account federal tax increases, including the expiration of the Bush-era tax cuts, the alternative minimum tax, the payroll tax and a slew of other expiring tax provisions. State budget direct Jeremy Stermer warned that the estimate could be very modest, as it does not include cuts to domestic programs that would transfer those costs to states.  -  Read more at The Chicago Tribune

RELATED: Without a Cliff Deal, States Will Bleed Red Ink

ANALYSTS ENCOURAGED BY SIGNS FROM WASHINGTON  Analysts at Capital Economics, a Toronto-based research firm, are encouraged by negotiations in Washington and said  they are optimistic that Congress and the White House will reach a deal to prevent falling off the cliff. “The encouraging noises emanating from Washington make it more likely, although it is still far from certain, that a deal to prevent the fiscal cliff will be reached and that any adverse impact on the economy will be fleeting.” The analysts said they expect some small budget tightening, but they believe the latest drop in gasoline prices will offset around half of that. 

'GANG OF 8' FADES ON FISCAL CLIFF NEGOTIATIONS  The bi-partisan group of eight senators, known as the Gang of Eight, who have been working to craft a deficit reduction bill to bring to the table during the lame duck session, appear to be  quietly bowing out of key fiscal cliff negotiations, saying the only discussions that really matter now are between President Obama and Speaker John Boehner. Regardless, the group met this week ahead of the White House’s meeting with Congressional leaders, “'It was great. We had a lot of doughnuts,' Sen. Richard J. Durbin, D-IL, told The New York Times’ Jonathan Weisman.”
Read more at The New York Times

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Washington Correspondent Brianna Ehley, based in D.C., covers Congress, government agencies and spending issues, health care, and tax and economic policy for The Fiscal Times.