The First Order of Business? - 'The Fiscal Cliff' ?

With Obama remaining in the White House and the Congressional makeup virtually unchanged, what will the first order of business be ?

The "Fiscal Cliff" seems to stand out and so does the $110 billion in automatic spending “sequesters”.

Will Congress come together or will the bickering continue and stagnation remain the norm ?

Senate Majority Leader Harry Reid has extended his "Olive Branch" to Speaker of the House John Boehner as well as to Senate Republican Leader Mitch McConnell.

Although many will see Reid's "Peace Offer" as a "cover-all excuse" to use against any backfires that come out of Congress.

Will Republicans be willing to "Work With" Democrats now ?

Delayed decisions pack early agenda

The agenda is extensive and seemingly growing longer every week: Another trillion-dollar deficit is looming in 2013, debt has topped $16 trillion, the immigration system is broken, the tax code needs an overhaul, gas prices and unemployment remain stubbornly high, a final decision on the Keystone pipeline lingers, Iran’s nuclear program looms ever larger, and al Qaeda may be resurgent in parts of the Middle East.

Some problems won’t even wait for Inauguration Day, Jan. 20.

The new year will usher in higher income taxes across the board as the George W. Bush-era tax cuts are due to expire Jan. 1.

One day later, the $110 billion in automatic spending “sequesters” set in motion by last year’s debt deal take effect, slashing equally from defense and domestic spending.

But an angry electorate begging for change did little to upset the balance of power in Washington, where gridlock has reigned and shows no signs of letting up.

Morning-after reality: No easy answers to gridlock

Oh, and one more thing.....

(CNSNews.com) - The U.S. Treasury quietly warned at the end of a statement issued last Wednesday that it expects the federal government to hit its legal debt limit before the end of this year--which means before the new Congress is seated--and that "extraordinary measures" will be needed before then to keep the government fully funded into the early part of 2013.

On Aug. 2, 2011, President Obama signed a deal he had negotiated with congressional leaders to increase the debt limit of the federal government by $2.4 trillion. But, now, after only 15 months, almost all of that additional borrowing authority has been exhausted.

Treasury Quietly Warns: 'Expect Debt Limit to Be Reached Near End of 2012'

Senate Majority Leader Harry Reid (D-Nev.) extended an olive branch to House Speaker John Boehner (R-Ohio) and Senate Republican Leader Mitch McConnell (R-Ky.) on Tuesday night, offering to work together to avoid plunging off a the fiscal cliff.

“I look at the challenges that we have ahead of us and I reach out to my Republican colleagues in the Senate and the House. Let’s come together. We know what the issues are, let’s solve them,” he told a boisterous audience packing the ballroom of the Liaison Capitol Hill Hotel.....

Reid extends olive branch to Boehner and McConnell ahead of lame duck

Well IS Harry just making it harder now ? Is He really sincere ? Or is this just another set up to blame future failures on somebody else ? Is HE Really willing to "work with" Republicans ?

Hold the phone a minute !!

In a warning to President Obama, Speaker John Boehner (R-Ohio) said Tuesday night that the reelection of the House Republican majority means that there is “no mandate for raising tax rates” on the American people.

Boehner delivered brief remarks to a subdued crowd of Republicans in Washington who watched as Obama won key early states on the road to a possible reelection victory Tuesday.

While the Speaker has in recent days predicted a victory for Republican nominee Mitt Romney, he made no such declaration shortly before 10 p.m. on Tuesday, after the House was projected to stay in GOP hands......

Boehner: GOP House majority means 'no mandate' for tax hikes

Hmmmm.

Somebody's Opinion:

WASHINGTON (AP) - President Barack Obama's victory means that everything he campaigned upon is alive and about to drive the political conversation with his adversaries. Every legacy of his first term is safe and enshrined to history.

Yet big honeymoons don't come twice and Republicans won't swoon. If Obama cannot end gridlock, his second term will be reduced to veto threats, empty promises, end runs around Congress and legacy-sealing forays into foreign lands.

Obama will push for higher taxes on the wealthy as a way to shrinking a choking debt and to steer money toward the programs he wants. He will try to land a massive financial deficit-cutting deal with Congress in the coming months and then move on to an immigration overhaul, tax reform and other bipartisan dreams.......

Analysis: Obama wins but Washington unchanged

What's NEXT ?

There's an article on Zerohedge that might also be relevant and interesting.

www.zerohedge.com...

reply to post by xuenchen


Will be to let the Bush Tax cuts expire....


Encore Broadcast: On Winner-Take-All Politics
March 1, 2012

In this encore presentation, Bill Moyers investigates America’s economic disparity — how it happened and who’s to blame.

billmoyers.com...

PAUL PIERSON: The Bush tax cuts in a lot of ways were written like a subprime mortgage. You know, they were designed to make people see certain things, and not see a lot of the fine print.

JACOB HACKER: Fully 30 to 40 percent of the benefits were going to the very top, of the income distribution. The top one percent. And when you broke it down, it was really the top one-tenth of one percent that did so well because of the estate tax changes, and because of the changes in the top tax rates, the changes in the capital gains taxes. And if you go to 2003, changes in the dividend tax. I mean, these were all tax breaks that were worth a vast amount to the richest of Americans and worth very little to middle class Americans.

PAUL PIERSON: Within a few weeks after the legislation was passed, we all get a letter that says Congress and the President have given you this tax cut. And then that's pretty much it for the middle class. But for higher income groups, the further forward you go in time, the bigger and bigger the benefits get. So it was really designed to front-load the relatively modest benefits for the middle class, and to back-load the benefits for the wealthy.

JACOB HACKER So why? Why do the winners get policies that make their winnings even larger? You know, this is not a trivial change. If you say from the mid-90s to 2007, those top 400 tax payers, they've seen their tax rates decline so much that it's worth about $46 million for every one--

BILL MOYERS: For every--

JACOB HACKER: Of those 400 tax payers. So it's-- the numbers are staggering. When you start to look within the top one percent, and look at what government has done to help those people out, through taxes, through changes in the market, financial deregulation and the like, and through protecting them from efforts to try to push back.

BILL MOYERS: Protecting them?

JACOB HACKER: Well, I think this is something that really needs to be understood. You know, these large shifts in our economy had been propelled in part by what government has done, say deregulating the market, the financial markets, to allow wealthy people to gamble with their own and other peoples' money, and ways to put all of us at risk, but allow them to make huge fortunes.

reply to post by newcovenant


So letting those tax cuts expire will increase revenues by how much ?

Let's hope they don't spend it away.

How will the new tax increases affect the middle class ?

We need to see some real time figures.

reply to post by xuenchen


Just a week or two ago Obama told his faithful that the republican held house had been using trick and dirty tactics to stall out his vision of our future. And they believe it because they dont know how the prosses works or what division of power is about or used for. Just more stuff getting in the way of Shangrala.


Anyway he may come after them with strong rhetoric durring his first two years in hopes of getting enough driven out of office to make hay in his last two years.

This opinion article from August has some numbers that might affect most people.

Americans would shell out as much as $5,700 more a year if the Bush tax cuts are allowed to expire at the end of 2012, according to a new analysis that highlights the perils and political consequences of the nation's fiscal cliff.

Connecticut residents would get rocked the worst, with an additional cost of $5,783 a year while New Yorkers would get hit $5,542 on average, the study from the nonpartisan Tax Foundation states.

Mississippi residents get the least impact, at $1,310 on average, but 29 of the 50 states will see taxpayers get hit at least $2,000.....................

How Much Will It Cost You If Bush Tax Cuts End? A Lot

If true, what will this do to the general economy ?

The fiscal cliff is a term that refers to a series of tax increases and spending cuts that would take place unless Congress reaches deficit-reduction goals.

Originally posted by Logarock
reply to post by xuenchen

 

Just a weekmor to ago Obama told his faithful that the republican held house had been using trick and dirty tactics to stall out his vision of our future. And they believe it because they dont know how the prosses works or what division of power is about or used for. Just more stuff getting in the way of Shangrala.


Anyway he may come after them with strong rhetoric durring his first two years in hopes of getting enough driven out of office to make hay in his last two years.

edit on 7-11-2012 by Logarock because: n

Good Point !!

That tactic will stall the economy even more.

That scenario is very dangerous and very real now.

Maybe the Democrats will "silently" announce that their main objective is to make sure Republicans in Congress don't get another term !!

Thank God Obama won. Now the elite banksters FINALLY get taxed out of their arses. The French Socialist have the right idea. Anyone who earns over 1.5 million dollars (US) a year AUTOMATICALLY gets hit with a tax of 75 cents in the dollar. Go Obama!

Originally posted by aaronez
Thank God Obama won. Now the elite banksters FINALLY get taxed out of their arses. The French Socialist have the right idea. Anyone who earns over 1.5 million dollars (US) a year AUTOMATICALLY gets hit with a tax of 75 cents in the dollar. Go Obama!

Good for You !!!

Get all that raving jealousy out of your system.

But don't you think the "rich" are ready and prepared ?

You know they ARE

reply to post by xuenchen


Two things:

1. That opinion article isn't being entirely honest. There have been for a while a number of people working on a replacement for the "Bush Tax Cuts" that doesn't affect those that make under $250,000. Secondly, those "averages" are just that. They're lumping multimillionaires in with people that are poverty level. Do you honestly believe for a single moment that someone making $18K a year is suddenly going to get a $5K tax bill thrown at them? Not happening.

2. Tax Foundation is in no way whatsoever a non-partisan group. Their board has been headed by former Republican Senators, former advisers of both the Reagan and Bush administrations, former big oil tycoons, etc. They have an agenda.

That's all I've got.

I don't think I've ever agreed with you xuenchen, but you do often get me thinking and looking things up and I appreciate that.

Originally posted by LuckyLucian
reply to post by xuenchen

 

Two things:

1. That opinion article isn't being entirely honest. There have been for a while a number of people working on a replacement for the "Bush Tax Cuts" that doesn't affect those that make under $250,000. Secondly, those "averages" are just that. They're lumping multimillionaires in with people that are poverty level. Do you honestly believe for a single moment that someone making $18K a year is suddenly going to get a $5K tax bill thrown at them? Not happening.

2. Tax Foundation is in no way whatsoever a non-partisan group. Their board has been headed by former Republican Senators, former advisers of both the Reagan and Bush administrations, former big oil tycoons, etc. They have an agenda.

That's all I've got.

I don't think I've ever agreed with you xuenchen, but you do often get me thinking and looking things up and I appreciate that.

I agree to a point.

I thought the tax cuts were averaging between 3% to 5% for the average middle class income.

Added edit:

this looks more realistic ?

Lower Rates Will Disappear

Currently, all Americans enjoy the lower tax rates the Bush tax cuts provided. If the cuts expire, income tax rates will rise across all tax brackets. Under current rates, those in the lowest bracket pay taxes at a 10 percent rate while those in the top income bracket pay at a 35 percent rate. These rates will rise to 15 percent and 39.6 percent, respectively.

If the cuts expire, the lowest tax bracket will disappear and the lowest tax rate will become 15 percent. The tax rates for middle-income earners will increase from 25, 28 and 33 percent to 28, 31 and 36 percent, respectively.

Other tax rates will also increase. The employee payroll tax rate will increase two percentage points to 6.2 percent. Likewise, the estate tax rate will also increase from 35 percent to 55 percent, while the value of estate assets excluded from estate taxes drops from $5.12 million to $1 million. Lastly, the tax rate on income from realized capital gains will increase from 15 percent to 20 percent.

How Expiration of the Bush Tax Cuts Will Affect Individuals and Businesses

So it looks like people in the 10% "bracket" will go to a 15% bracket.

more details in the link.

Dear Xuenchen,

Good to see you here. I was sad when Obama win. But glad you are still here keeping his corrupt presidency in check. Look for a Jeb Bush/Marco Rubio ticket vs Hillary Clinton 2016 matchup. Until then, keep punching!

-au

reply to post by xuenchen


Yeah, that's much better but it seems to mainly be a really wordy advertisement for a law firm. My beef with that other one was the lazy math they used. All they did was look up the per capita income of each state and broadly apply the same percentage across the board.

Originally posted by alternateuniverse
Dear Xuenchen,

Good to see you here. I was sad when Obama win. But glad you are still here keeping his corrupt presidency in check. Look for a Jeb Bush/Marco Rubio ticket vs Hillary Clinton 2016 matchup. Until then, keep punching!

-au

Thanks for checking in.

Bush/Rubio - we shall see what develops !!

reply to post by xuenchen


I've recently been reading the "Economic Report of the President, 2012" report & thinking extensively about "The President's Balanced Approach to Deficit Reduction" on page 95 (full report is here: www.presidency.ucsb.edu...).

The cornerstone of the President’s approach to deficit reduction—and perhaps the way in which it differs most from plans offered by others—is the balance it strikes between sustainable tax revenues and spending cuts.

Example:

The Administration proposes to achieve $1 trillion in discretionary spending savings over the next 10 years through the budgetary caps established by the Budget Control Act; $30 billion in deficit reduction through cutting or consolidating ineffective, duplicative, or outdated Federal programs; adopting a new defense strategy that cuts defense spending by 9 percent relative to the Fiscal Year 2012 Budget; limiting funding for Overseas Contingency Operations to $450 billion through 2021; a $60 billion fee on large financial firms; adjustments to the Medicare and Medicaid programs to make them more efficient and cost-effective; and a reform of the Federal civilian workers’ retirement plan that saves $21 billion over the next decade.

I've no idea what this "$60 billion fee on large financial firms" is about. Anyway, I'm going to be neutral and let the report speak for itself, other than to suggest much of the commentary within squarely aligns with the Democratic platform.

Obama should just say, "balls in your court Republicans, come to me with your most sincere compromise".

I don't doubt that Republicans will continue to hold the middle class hostage to try to protect their rich friends, but Obama has nothing to lose anymore, they can't threaten him with damaging his re-election chances anymore.

It's time for Republicans to come to the table.

reply to post by xuenchen


Sorry to say this but the economy will keep going down the crapper while the middle class is squeeze dry and Wall Street will prosper

I see that many issues has been exposed on the OP and subsequece post, but How come nobody has talk about the bailouts to that the Fed is still having on going for the banks and Wall Street in the name of Q1,2 and 3?, the government is having no problem letting the Fed since July print billions of dollars a month to give away to banks.

The irony, people fight for the wrong reasons but never get to understand how politicrats and banskters work in this nation.

Sad, sad sad, America will keep eroding economically and no politirat will change that, the money mobster needs to feed regardless.

edit on 7-11-2012 by marg6043 because: (no reason given)

It's not a very pretty picture.

Income tax increases.
Obama Care tax increases on top of that.
Cuts in every Govt Program.

Anyone who believes that increasing taxes on people who have already lost $4,500 of their earning power in the last 4 years is a good idea, is really not looking at the problem.

It's not that we tax too little, it's that we don't have enough taxpayers working. We don't even pretend to balance a budget anymore....both parts just spend like we have an unlimited credit card.....eventually we don't and pay a huge price for our spending binge.

The more Americans we have working the better it is for the economy, budget and defict, that still needs to be our #1, #2 and #3 priorities.

I think we can cut 5% out of any Government program without gutting any of them if we really look at them.... our Federal Government just like a lot of Americans is Obese, there is fat to trim.

The best way to lose fat is exercise (more employment) and diet (budget cuts) in tandem. Giving the Govt. more of an individual's tax money is like giving a twinkie to an obese person, you know they aren't going to save it, they will just eat it and look for another twinkie.

The way I see it is this: The federal government is spending more money than they have. There's only 3 logical ways to fix it. Cut spending, increase revenues, or do both. It sounds to me like increasing taxes and cutting spending simultaneously will have a greater effect than doing only 1 or the other.

At the same time, increasing taxes during a recession isn't a good idea either as it will hamper economic growth. So I'm torn on this issue. I guess we'll have to see what the next 4 years brings us.

www.shmoop.com...

Reagan Era Economy

The uneven distribution of benefits from the Reagan boom reflected a growing trend toward what has been called the "financialization" of the American economy. As the financial sector displaced industrial manufacturing as the dominant economic force in American society, the gains from growth came to accrue almost entirely to those with major investments in the market, while individuals dependent solely upon wages and salaries found it harder and harder to get ahead. During Ronald Reagan's presidency, the wealthiest one-fifth of American households (those who naturally owned the most stock) saw their incomes increase by 14%. Meanwhile, the poorest one-fifth (who presumably owned no stock) endured an income decline of 24%, while the incomes of the middle three-fifths of American families stayed more or less flat. This uneven pattern represented a marked departure from the earlier economic expansions of the 1940s, '50s, and '60s, which had generated smaller returns for investors but raised income levels across all classes of society.

Originally posted by Logarock
reply to post by xuenchen

 

Just a week or two ago Obama told his faithful that the republican held house had been using trick and dirty tactics to stall out his vision of our future. And they believe it because they dont know how the prosses works or what division of power is about or used for. Just more stuff getting in the way of Shangrala.


Anyway he may come after them with strong rhetoric durring his first two years in hopes of getting enough driven out of office to make hay in his last two years.

edit on 7-11-2012 by Logarock because: n

You could process that Bush Tax cuts and the Reagan restructuring redistributed wealth from middle class to the wealthy and not just any wealthy but the top 400 families. Scales need to be tipped BACK in favor of your middle class to save the country. Ben Stein , Jacob Hacker and Paul Pierson can explain why this is true and critical first step while extending tax cuts across the board for the middle class



billmoyers.com...

Bill Moyers explores how America’s vast inequality didn’t just happen, it’s been politically engineered.

Bill’s guests – Jacob Hacker and Paul Pierson, authors of Winner-Take-All Politics: How Washington Made the Rich Richer — And Turned Its Back on the Middle Class, argue that America’s vast inequality is no accident, but in fact has been politically engineered.

How, in a nation as wealthy as America, can the economy simply stop working for people at large, while super-serving those at the very top? Through exhaustive research and analysis, the political scientists Hacker and Pierson — whom Bill regards as the “Sherlock Holmes and Dr. Watson” of economics — detail important truths behind a 30-year economic assault against the middle class.

Who’s the culprit? “American politics did it– far more than we would have believed when we started this research,” Hacker explains. “What government has done and not done, and the politics that produced it, is really at the heart of the rise of an economy that has showered huge riches on the very, very, very well off.”