The U.S. Congress comes back on Monday without a deal to avert the "fiscal cliff" and only a few hours of actual legislative time scheduled in which to act if an agreement materializes.
U.S. Senators John McCain (R-AZ) (L) and Jon Kyl (R-AZ) leave
the SenateChamber for the caucus at the U.S. Capitol in
Washington December 30, 2012. Efforts toprevent the economy
from tumbling over a "fiscal cliff" stalled on Sunday as Democrats
and Republicans remained at loggerheads over a deal that would
prevent taxes for all Americans from rising on New Year's Day.
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Negotiations involving Vice President Joe Biden and Senate Republican leader Mitch McConnell appeared to offer the last hope for avoiding the across-the-board tax increases and draconian cuts in the federal budget that will be triggered at the start of the New Year because of a deficit-reduction law enacted in August, 2011.
A jolt from the financial markets could also prod the parties, as it has occasionally in the past.
"I believe investors will show their displeasure" at the lack of progress in Washington, said Mohannad Aama, managing director at Beam Capital Management, an investment advisory firm in New York.
Democratic and Republican leaders in the Senate had hoped to clear the way for swift action on Sunday. But with the two sides still at loggerheads in talks, Senate Democratic leader Harry Reid postponed any possible votes and the Senate adjourned until Monday.
The main sticking point between Republicans and Democrats remained whether to extend existing tax rates for everyone, as Republicans want, or just for those earning below $250,000 to $400,000, as Democrats have proposed.
Also at issue were Republican demands for larger cuts in spending than those offered by President Barack Obama.
Hopes for a "grand bargain" of deficit-reduction measures vanished weeks ago as talks stalled.
While Congress has the capacity to move swiftly when motivated, the leaders of the U.S. House of Representatives and the Senate have left themselves little time for what could be a complicated day of procedural maneuvering in the event of an agreement.
House Speaker John Boehner has insisted that the Senate act first, but that chamber does not begin legislative business until about noon Monday.
OTHER BUSINESS ALSO ON AGENDA
And the cliff is not the only business on the House agenda. Farm-state lawmakers are seeking a one-year extension of the expiring U.S. farm law to head off a possible doubling of retail milk prices to $7 or more a gallon in early 2013.
Relief for victims of Superstorm Sandy is waiting in line in the House as well, though it could still consider a Senate bill on assistance for the storm until January 2, the last day of the Congress that was elected in November 2010.
Expiring along with low tax rates at midnight Monday are a raft of other tax measures effecting tens of millions of Americans.
A payroll tax holiday Americans have enjoyed for two years looks like the most certain casualty as neither Republicans or Democrats have shown much interest in continuing it, in part because the tax funds the Social Security retirement program.
The current 4.2 percent payroll tax rate paid by about 160 million workers will revert to the previous 6.2 percent rate after December 31, and will be the most immediate hit to taxpayers.
A "patch" for the Alternative Minimum Tax that would prevent millions of middle-class Americans from being taxed as if they were rich, could go over the cliff as well. Both Republicans and Democrats support doing another patch, but have not approved one.
At best, the Internal Revenue Service has warned that as many as 100 million taxpayers could face refund delays without an AMT fix. At worst, they could face higher taxes unless Congress comes back with a retroactive fix.
After Tuesday, Congress could move for retroactive relief on any or all of the tax and spending issues. But that would require compromises that Republicans and Democrats have been unwilling to make so far.
Obama said on Sunday he plans on pushing legislation as soon as January 4 to reverse the tax hikes for all but the wealthy.
Americans are going to get what they deserve for giving the Republicans a majority in Congress. Either the fiscal cliff will hit or the poor and middle class will be extremely taxed in order to make up for the rich keeping their low taxes.
ReplyDeleteJust watch as soon as taxes are raised on the super rich not one of them will have a single ounce of patriot blood in them. They will run off to another country turning their back on the United States and become tax exiles faster then anyone can call them traitors.
ReplyDeleteThe problem isn’t the Senate. The problem isn’t the President. The problem isn’t the intended to be temporary because it was known at the time it was unsustainable tax breaks for all Americans or the spending which has dramatically increased during two recessions to keep America afloat and moving onto a forward track which all have agreed needs to be reduced and all have put cuts on the table.
ReplyDeleteThe problem, the actual problem, is the corruption exposed by the CU ruling.
My advice to Americans is to ignore the TV ads. Ignore the millions of money being invested into promoting one candidate over another. When you next vore for your representitives, look in your own backyard to those less known. Less heavily promoted. Ignore their party alignment and pay more attention to what they propose overall.
Don’t be swayed by the hired marketing. Vote for not who stands the most extreme because they won’t get the job done. Vote for those who do promote they will work together for the solutions American so desperately needs from them.
We are looking at the face of extremism.