Four days from now, in the absence of an agreement between President Obama and leaders in the U.S. House and Senate, when New Year’s Eve revelers ring in 2013 at midnight, for millions of taxpayers and government contractors “Auld Lang Syne” will take on a tone more akin to a funeral dirge.
If America goes over the fiscal cliff, will it be the end of our economy as we know it? Of course not. But try telling that to the barons of Wall Street who are preternaturally wired to be nervous. This morning, stocks fell again, for the fourth straight day, due to the mere thought of failure to reach an agreement. If there’s no deal, at 12:01 a.m. on January 1, sweeping tax increases and budget cuts will automatically occur…but that’s only on paper and 'automatic' could mean a few days or, perhaps, hours beyond the deadline. Right now, the stakes are high and leaders on both sides appear to be negotiating in earnest.
During a policy speech last summer by U. S. Senator Patty Murray (D-WA) before the Brookings Institution, in Washington, DC, Murray gave voice to what was then considered the unthinkable—the idea that going over the cliff would not beget a fiscal catastrophe. After outlining in meticulous detail the attempts her party had made to reach a compromise that protected the middle-class and asked the wealthy to pay more, as originally envisioned in Bush-era tax cuts that were supposed to be temporary, Murray said, “…If we can’t get a good deal, a balanced deal that calls on the wealthy to pay their fair share, then I will absolutely continue this debate into 2013 rather than lock in a long-term deal this year that throws middle-class families under the bus, and I think my party and the American people will support that. On January 1st if we have not gotten a deal, Grover Norquist and his pledge are no longer relevant to this conversation… If the Bush tax cuts expire, every proposal will be a tax cut proposal, and the pledge will no longer keep Republicans boxed in and unable to compromise. If middle-class families start seeing some money coming out of their paychecks next year,are Republicans really going to stand up and fight for new tax cuts for the rich?”
We’ll see.
While a huge part of the U.S. small business community is as angst riven as everyone else, this business sector is closely monitoring fiscal cliff deliberations on Capitol Hill. Small business leaders have much at stake in the outcome of this standoff. While their voices are decidedly mixed, the good news is they are making their voices known to policymakers. Last Thursday, members of the Maine Small Business Coalition held a conference call with reporters where they voiced support for the view that taxes on incomes above $250,000 should be increased as part of a balanced deficit reduction solution that also makes provisions that strengthen Social Security and other safety net resources.
On the heels of House Republicans’ stunning rejection of Speaker John Boehner’s ‘Plan B’ proposal last week, yesterday, aides to the Speaker announced the House would convene a ‘pro forma’ session, today, with no legislative action being taken. Before he left for the Christmas holiday, the President delivered a statement in response to House leaders’ failure to act. In part, he said, “Over the last few weeks I've been working with leaders of both parties on a proposal to get our deficit under control, avoid tax cuts—or avoid tax hikes on the middle class, and to make sure that we can spur jobs and economic growth—a balanced proposal that cuts spending but also asks the wealthiest Americans to pay more; a proposal that will strengthen the middle class over the long haul and grow our economy over the long haul.”
Yesterday, Speaker Boehner and three members of his House leadership team released a brief statement that said, “The House has acted on two bills which collectively would avert the entire fiscal cliff if enacted. Those bills await action by the Senate. If the Senate will not approve and send them to the President to be signed into law in their current form, they must be amended and returned to the House…the Senate must act first.”
This afternoon, President Obama returned to the White House while his family remained on vacation in Hawaii. He made calls to congressional leaders on both sides during his vacation. Today, from the Oval Office, the President spoke one-on-one with the top four House and Senate leaders, Speaker Boehner, Democratic Leader Nancy Pelosi, Senate Majority Leader Harry Reid and Senate Minority Leader Mitch McConnell.
Earlier this afternoon, perhaps in response to the President’s overtures, Speaker Boehner held a conference call among almost all House Republicans presumably to map out their next move.
As the calendar winds down to December 31, rhetoric on both sides is beginning to get testy.
Last weekend, an unnamed source associated with the White House said this, “What we need is for the Senate Minority Leader not to block a vote and for Boehner to allow a vote,” a White House official told ABC News. “The hits to our economy aren’t coming from outside factors, they’re coming from congressional stupidity.”
In recent days, while some House Republicans anxiously turned to Senate Minority Leader Mitch McConnell for leadership, today, Majority Leader Harry Reid spoke from the floor of the Senate and unloaded on what he sees as Republicans’ failure to lead, “The American people I don’t think understand the House of Representatives is operating without the House of Representatives. It’s being operated by a dictatorship of the Speaker, not allowing the vast majority of the House of Representatives to get what they want.
“If the 250 were brought up, it would pass overwhelmingly,” Reid said referring to the recommended $250,000 threshold for income tax cuts. “What goes on in this country shouldn’t be decided by ‘the majority,’ it should be decided by the whole House of Representatives…John Boehner seems to care more about keeping his speakership than keeping the nation on firm financial footing.”
Later today, in a return to the Senate floor, in part Reid added, "If we go over the cliff, and it looks like that's where we're headed...the Senate passed bill...is the only option for a viable escape route. Grover Norquist is standing in the way of this. Not the rich people but Grover Norquist, the man who says what the Republicans can do. So I say to the Speaker take the escape hatch that we've left you. Put the economic fate of the nation ahead of your own fate as Speaker of the House."
While emotions are running high, at this point it appears that a final agreement will not be agreed to by the December 31 headline. However, while there’s no news yet on the series of phone calls between the President and top House and Senate leaders today, a bit of good news was announced this afternoon by House Majority Leader Eric Cantor (R-VA) who, in a Tweet, said the House will convene on Sunday evening, December 30, at 6:30 p.m. EST. And, in a further bit of late breaking news, the Examiner can confirm late breaking reports that the four top leaders in the U. S. House and Senate will meet with the President, tomorrow, in the White House to continue negotiations.
Barring a total breakdown in these ongoing deliberations, it appears that while this legislative effort may not conclude, in full, by midnight on December 31, there appears to be a solid and determined effort to resolve this matter with as little damage to taxpayers and the U.S. economy as possible.
