The decorated gates at the White House are closed and the occupants have flown to Hawaii for Christmas vacation, and there is still no solution to avoiding the impending dive over the fiscal cliff established by Congress and the President last year. The situation I described in my last post at the end of November has not changed at all. The elected officials in Washington have made no progress; reached no agreed deals on a bi-partisan solution; taken no action to solve the crisis.
Ever since Obama was re-elected, Speaker Boehner has made proposals to extend the current tax rates and cut taxes that the White House and Senate Democrats have rejected. Then the White House makes a counter-proposal that the House Republicans reject. Each of these exchanges is characterized by dueling press conferences attacking the other side's proposal. What is not seen is all key parties sitting down together to work out a compromise that all can live with, even if not fully to each side's liking. Business deals are reached like this around the world every day, but politicians seem more interested in repeating their tired old policies and talking points that demean the other side.
It's no wonder that business leaders have no confidence in our federal government and the financial markets see the US political system as dysfunctional. Another downgrade of the US credit rating is very likely after the new year starts unless a post-Christmas miracle occurs next week.
The irony is that the public and the press have already decided that, if the nation fails to avoid the fiscal cliff and taxes rise for everyone after January first, it will be the Republicans' fault. Yet the Washington Post reported today on facts that are little known by the public:
“The House has already acted to stop all of the looming tax hikes and replace the automatic defense cuts” scheduled to hit in January, Boehner spokesman Brendan Buck said in a written statement, a reference to a measure the House passed last summer to extend the George W. Bush-era tax hikes for taxpayers at all income levels....
Like their counterparts in the House, Senate Republicans are eager to avert the fiscal cliff — Washington shorthand for more than $500 billion in automatic tax hikes and spending cuts set to hit in January. Unless Congress acts, taxes will rise for nearly 90 percent of Americans, potentially knocking the nation back into recession.
Polls show that a majority of Americans would blame Republicans for that outcome. Surveys also show that voters overwhelmingly support Obama’s proposal to deal with record budget deficits in part by raising taxes on the wealthy."
This report seems to indicate that a bill has already passed the House and is sitting in the Democratic controlled Senate that would avoid the fiscal cliff calamity about to occur. If the Democrats want to raise taxes on the wealthy, as Obama and the majority of the public who voted him in for a second term have indicated, why doesn't the Senate bring the House bill to the floor and amend it with a Bush tax rate extension limited to those who make less than $250,000 (or as Obama seems to now accept $400,000) and then take the bill to Conference, as all bills normally do. There are very likely enough Republican Senators at this stage who would favor such a compromise, thereby assuring there would be no filibuster. Then key members of both parties from each house of Congress could sit down together to discuss the threshold over which tax rates should rise.
Boehner already agreed to $1 million in income as the tax increase threshold, but the tea party faction of his party refused to vote for that option. However, there were many Republicans who would have voted for this so-called Plan B. By going to Conference on differing bills passed by both houses to reach a compromise on a final bill, key members of both parties will be able to sit down in a room and reach an agreement. This is the way governing under the US Constitution is supposed to work!
Now is the time for all elected officials in Washington (or Hawaii) to carry out their Constitutional duties as the voters elected them to do.
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