President Obama and the Senate are back in Washington to ostensibly cobble together a last minute deal to avoid sending the economy over the fiscal cliff. But they might as well have returned after Christmas to point fingers at each other.
Their comments suggest a deal is even less likely than before. House leaders on Wednesday continued to heap the lion’s share of responsibility onto the Senate, a message designed to get more blame assigned to Democrats. But getting a deal through that chamber requires Senate Majority Leader Harry Reid, D-Nev., to broker an agreement with Minority Leader Mitch McConnell, R-Ky. And senior aides in both parties say the two haven’t met or spoken since last week.
Meanwhile, the White House and Reid have teamed up on package that includes the president's demand of raising tax rates on families making more than $250,000, as well as patching the alternative minimum tax and extending federal unemployment insurance benefits that will otherwise expire in January.
However, aides told the Washington Post that the details of the package had not gotten much traction from Senate Republicans, and left unchanged, would almost certainly fail in the Republican-dominated House. - Read more at The Washington Post
SHORT-TERM TRICKS TO BLUNT CUTS Don’t start stocking canned food for the cliff-pocalypse yet. Sure, things look dreadful. But if lawmakers can’t cut a last minute deal to steer the economy away from the fiscal cliff, the White House can still soften the blow of the deep spending cuts that threaten to slash defense and other government agencies.
The Fiscal Times' Eric Pianin reports that the White House has several short-term fixes that can delay furloughs and layoffs, giving lawmakers a few more weeks to hammer out some kind of deal. The White House can control the rate of federal spending during the first few weeks, delaying the announcement of new federal contracts and grants until later in the year, redirecting funds to more urgent activities, and using spending options to prevent agency layoffs. - Read more at The Fiscal Times
DEBT CEILING BREACHED IN FIVE DAYS Remember that disaster in the summer of 2011 with the debt ceiling? Well, we’re about to repeat it. And in the spirit of Hollywood sequels, it’s gotten even bigger and badder.
Treasury Secretary Timothy Geithner announced Wednesday that in just five days the U.S. government will reach its $16.4 trillion borrowing limit. This forces the Treasury Department to take "extraordinary measures" for about two months to continue financing the government, until Congress passes legislation that allows for more borrowing. Geithner said the Treasury could create around $200 billion in additional funding during that time. - Read more at The Fiscal Times
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