Lawmakers teeter on the fiscal cliff
Compromise over issues that would prevent the nation's finances from falling off a fiscal cliff come January may or may not be in the air, judging from the sometimes-opaque statements of elected politicians.
Key to parsing Republican thinking is whether signals about accepting new revenue amount to new flexibility on raising taxes.
Democrats have shown recent firmness in their demand that marginal tax rates--currently at historic lows--be raised for those with an adjusted gross income of $250,000 or more annually.
In his Nov. 10 weekly address, President Obama said "if we're serious about reducing the deficit, we have to combine spending cuts with revenue," and, "as we negotiate a broader deficit reduction package, Congress should extend middle-class tax cuts right now."
But Sen. Saxby Chambliss (R-Ga.), on the Nov. 11 "This Week" on ABC, said eliminating tax credits and deductions would be sufficient to generate new revenue and simultaneously allow legislators to lower tax rates even farther. "Speaker Boehner was absolutely correct, that you do have to have revenues on the table, but that doesn't mean raising taxes."
Chambliss also said that entitlement reform process must be put in place, even though it is very unlikely a full reform will be developed by the end of the year.
Grover Norquist, who designed the Taxpayer Protection Pledge, said on CNN's Nov. 12 "Starting Point" that a deal is possible because lawmakers have been here before, but Norquist also stuck to his no-new-taxes guns.
"We're in exactly the same position we were two years ago," said Norquist. "And the president, Obama, said the economy's doing so poorly we can't raise taxes now." Norquist did imply that Republicans would not break the Pledge if new revenue did not equal a tax rate increase, so closed loopholes would need to come with a reduced tax rate.
David Axelrod, Obama's senior campaign advisor said on CBS' Nov. 11 "Face the Nation" that Boehner's "willing" statement was a good signal for both sides. Boehner "didn't get into details about what he would or wouldn't accept. He didn't want to foreclose discussions and that was a positive sign," Axelrod said.
Sen. Patty Murray (D-Wash.), however, warned that going off the cliff is better than an "unfair" deal. Murray, on "This Week" said the government may "reach a point at the end of this year where all the tax cuts expire and we'll start over next year. And whatever we do will be a tax cut for whatever package we put together. That may be the way to get past this."
USA Today reports that the president will meet with labor leaders and progressive organizations—all of which campaigned for his re-election—on Nov. 13 and business leaders on Nov. 14 to discuss the fiscal cliff. Republican and Democrat leaders are expected to meet in the White House on Nov. 16.
Boehner: Republicans 'willing to accept new revenue' to avoid fiscal cliff
Pew poll: Tax hikes are only debt-reduction measures with majority support
'Fiscal cliff' tax increases probably won't be all or nothing