Though the House of Representatives isn’t scheduled to return to session until the new year, on Wednesday President Obama cut his vacation in Hawaii short to return to Washington D.C.
Insiders report there hasn’t been any progress in the negotiations to avert the combination of automatic spending cuts and tax cuts expiring known as the “fiscal cliff” since Speaker Boehner’s “Plan B” failed last week. On Friday, the president called for steps to be taken to guarantee that 98 percent of Americans won’t see a tax increase in 2013, when the Bush tax cuts are set to expired.
Now that he’s proven that he cannot pass a bill that raises taxes on anyone with Democratic support, Speaker Boehner is calling on the president to resolve the crisis with Democrats in the Senate. Senate Democrats passed a bill that would extend the Bush tax breaks on all incomes under $250,000. But Boehner has been unwilling to take up the bill, which he says cannot proceed because it’s a tax bill that originated in the Senate. The Constitution says legislation related to taxation must originate in the House.
Speaker Boehner has told his members to be ready to return to Washington D.C. within 48 hours in case they need to vote on a deal.
Americans support the president in the “fiscal cliff” negotiations over Speaker Boehner and congressional Republicans by a nearly 2-to-1 margin, according to Gallup:
Gallup also recently tracked the president’s approval rating at 57 percent, a level he has not reached since the death of Osama bin Laden.
Nearly any deal to resolve the “fiscal cliff” will likely affect the economy negatively.
But with housing prices showing steady improvement and the job market slowly improving, the end of tax breaks for the rich would likely create a small negative ripple in the economy, while the automatic cuts in the sequester and threat of a debt default could easy threaten a new recession.
Some hope that Senate Minority Leader Mitch McConnell might be able to broker a last-minute deal, as he did during the debt limit debate in 2011. But McConnell is running for re-election in 2014 and his greatest threat is opposition from the wing of the Republican Party that nixed “Plan B.”
The stock market diving provided much of the impetus for the debt limit deal in 2011. Thus far, Wall Street hasn’t overreacted to the deadlock in Washington D.C. And Members of Congress do not seem eager to offer any optimism.
“We’re now in a bad spot,” said Senator Lindsey Graham (R-SC). “I hope we don’t go over the cliff, but I think we are.”
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Copyright 2012 The National Memo