![]() Unfortunately, Obama’s advantage won’t force an early end to the impasse. He has said he’ll sign a bill, already passed by the Senate, that would protect all but the richest 2% in the country from income tax hikes, if only the GOP House will pass it. But while defense cuts will be made across the board, something Republicans have been eager to avoid, 47 specific social programs for the poor are exempt from the cuts, as is Medicaid, shielding some Democratic interests from at least some of the hit. At the time it was seen as a big win for the Tea Party in that the fiscal hawks got the threat of $1.2 trillion in spending cuts over ten years, beginning Jan. ![]() In that battle, the President rightly feels he has the upper hand: the fiscal cliff itself was set up to give the him an advantage when it was passed in August 2011. On the Republican side, every GOP House member who was elected for the next Congress ran against raising tax rates and thinks they won on the issue too they have been equally absolute that they won’t raise rates. By the end of the week, senior White House officials were explicitly insisting on higher rates as part of a deal. On the president’s side, he won the November election arguing that we should solve the budget mess in part by raising tax rates on the wealthiest Americans. What unseen forces are compelling Washington’s leaders to jump off the so-called fiscal cliff like so many lemmings, those Arctic rodents known for supposedly committing suicide in mindless droves by leaping en masse into the frigid ocean?įirst, the political incentives behind stalemate have become more acute in the year and a half since talks last broke down, not less. On Sunday, House Speaker John Boehner told Fox News, “We’re nowhere.” Top White House adviser Gene Sperling told Bloomberg, “It’s for now to come forward with their plan.” There will be moments of hope between now and the end of the year, no doubt, but long-time Washington budget experts think the chances of a resolution to the impasse are receding to the spring at the earliest. Democrats and Republicans are stalemated in talks to avoid tax hikes and spending cuts that will begin to kick in January.
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