We all know the drill: If lawmakers can’t come together and cut a deal by the stroke of midnight tonight, every American will pay more taxes and $109 billion in domestic and defense spending will be slashed from the federal budget , potentially sending the economy back into recession.
But the gulf between Democrats and Republicans in Congress has not been bridged. Enter Vice President Joe Biden who joined the negotiations at the invitation of Senate Minority Leader Mitch McConnell.
McConnell met with Biden last night after the Senate adjourned from an unproductive Sunday session and appeared closer to an agreement with Democrats making key concessions on taxes.
The “Bidenator” could be just what the fiscal doctor ordered. The Washington Post reports that Democrats are now proposing to raise tax rates on families earning more than $450,000 annually, dropping their previous demands using the $250,000 threshold. Most pundits think they could settle at $500,000. Democrats are also proposing to hold a vote in the Senate guaranteeing that taxes on inherited estates remain at their current levels, as the GOP demands.
But the real issue is how the increases will be spent. Democrats want to use the money for current spending increases. Republicans want the increases to be used to pay down the nation’s debt.
The Senate is scheduled to reconvene today at 11 a.m. House leadership has not announced when they will reconvene, but has made clear that they are waiting on action from the Senate and stand poised to immediately vote on any legislation that passes the upper chamber. - Read more at The Washington Post
OBAMA RAMPS UP PRESSURE ON GOP President Obama used an appearance on NBC’s “Meet the Press” Sunday to put last minute pressure on Congress to cut a deal and cave to his demands on taxes.
Making sure to point the blame at congressional Republicans, the president said the GOP lawmakers’ “unifying theme” is to protect the wealthiest Americans at everyone else’s expense.
“So far, at least, Congress has not been able to get this stuff done,” Obama said. “Not because Democrats in Congress don’t want to go ahead and cooperate, but because I think it’s been very hard for Speaker Boehner and Republican Leader McConnell to accept the fact that taxes on the wealthiest Americans should go up a little bit as part of an overall deficit reduction package.” - Read more at The Fiscal Times
STOCKS SLIP OVER THE CLIFF Investors are watching Washington very closely today, hoping lawmakers can cut a deal and spare the market more turmoil than the fiscal cliff has already caused. Last week, stocks fell for five straight trading sessions through Friday, with the Standard & Poor’s 500-stock index and the Dow Jones industrial average both losing more than 2.8 percent over that period.
- Read more at The Fiscal Times
HOW DID WE GET HERE, ANYWAY? Today is Congress’ last chance to avoid triggering massive tax hikes and spending cuts that, if not dealt with soon, could send the economy spiraling into a new recession. Moreover, the government will also reach its $16.4 trillion borrowing limit this week, giving Congress two months to raise the debt ceiling or risk a government shutdown. Some may wonder how we got into this mess in the first place. The Fiscal Times put together a timeline detailing the government's long, tortuous path leading up to the fiscal cliff. - Read more at The Fiscal Times
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