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I often wonder why politicians can’t work together for the country (no matter which one it is) rather than fight. I find it hard to believe that all Republicans or Democrats or Liberals and Conservatives are actually totally opposed to everything that is suggested to be done. To me it seems like politicians have more in their mind the idea of defeating the other party and taking over power, rather than what is good for the citizens. It’s a game of chess and the ‘people’ are the pawns.
That’s one of the reasons I think there should be an end to ‘party’ politics.
UPDATE from the Wall Street Journal (December 18):
WASHINGTON—President Barack Obama backed away from his long-standing call for raising tax rates on households making more than $250,000 a year, a development that inches the White House and congressional Republicans closer to a budget deal.
Mr. Obama's move, a counter to Republicans' recent proposal to raise tax rates on income over $1 million, further narrows the differences between the two sides. During a meeting with House Speaker John Boehner (R., Ohio) Monday the president proposed allowing Bush-era tax rates to expire for households making more than $400,000 in annual income, people familiar with the meeting said.
After weeks of public sniping, negotiations have intensified in recent days, with both sides making significant concessions. Obstacles still remain, especially the reaction of lawmakers on both extremes, but the movement suggests negotiators could reach a compromise and pass by the end of the year a deal to avert a series of spending cuts and tax increases set to take effect in January.
Aides to Mr. Boehner called the offer "a step in the right direction" but said it asks for too much tax revenue and not enough spending cuts. "We hope to continue discussions with the president so we can reach an agreement that is truly balanced and begins to solve our spending problem," said Boehner spokesman Brendan Buck.
The White House offer marks a major shift for the president—Mr. Obama since his first run for the White House has campaigned to allow Bush-era tax rates to expire for households making above $250,000—and raises the question of whether he will be able to sell such a deal to his own party.
As part of the offer, the president lowered the amount of tax revenue he is seeking in a deal from $1.4 trillion to $1.2 trillion. He also agreed to accept a GOP proposal to slow Social Security growth by using a different inflation formula to calculate cost-of-living increases, people familiar with he matter said.
One potential stumbling block is a White House request to raise the nation's borrowing limit for two years, something Republicans are likely to oppose. Mr. Obama's offer also calls for increased spending for infrastructure, a temporary extension of unemployment insurance benefits and a permanent extension of other tax breaks that expire at the end of the year.
The president's offer notably didn't include a Republican proposal to increase the Medicare eligibility age from 65 to 67, and his proposed change to Social Security would include protections for beneficiaries of the program deemed "most vulnerable," people familiar with the talks said. Many Democrats are against both ideas.
Another notable change in the White House's newest offer was the removal of a push to extend the payroll tax cut. The change means the amount of tax paid by virtually all earners next year will increase. A temporary payroll tax cut had been in place the past two years in an effort to help boost the economy, and it expires Dec. 31.
A Democratic official familiar with the talks said Mr. Obama's offer could pass the Senate but would still be a "tough sell'' within the party because of the Social Security proposal and the retreat from the $250,000 income threshold on tax increases.
The White House offer caps several days that have seen major retreats on both sides—Mr. Boehner's offer to raise tax rates and Mr. Obama's abandoning his $250,000 income threshold. So far neither side has seen a significant break in ranks, suggesting at least for now lawmakers are willing to follow their leaders.
Rep. Tom Rooney (R., Fla.) said he and most other Republicans would likely follow Mr. Boehner in accepting higher tax rates if Democrats committed to overhauling safety-net programs in a serious way.
"When I heard about [the latest GOP offer], it felt for the first time in a long time like there might be a light at the end of the tunnel regarding how we do business up here," Mr. Rooney said.
Mr. Obama will have to convince Democrats to swallow such cuts. Mr. Boehner meanwhile will have to prevent his conservative rank and file from rebelling against his decision to go along with a rate increase and also allow the debt limit to rise.
"I won't support a deal that raises taxes because it makes the economy worse," Steve Scalise (R., La.), chairman of the Republican Study Committee, made up of conservative House Republicans, "But I have yet to see any formal plan."
Senior White House officials have been reaching out to liberals for whom entitlement cuts could be as painful as tax increases are to conservatives, and Mr. Obama has checked in with Democratic congressional leaders as his talks with Mr. Boehner progress.
Many Democrats oppose the Social Security idea Mr. Obama has agreed to include. "The Republican plan to cut the Social Security benefits of millions of seniors in order to protect tax breaks for the richest 2% in America is neither fair nor balanced,'' said California Rep. Xavier Becerra, a member of the House Democratic leadership.
White House officials believe their new offer represents $1.2 trillion in new taxes and $1.22 trillion in spending reductions over 10 years, a ratio they say meets the balance target Mr. Obama set out during the campaign.
'Republicans are not prepared to support any tax increases. '
Actually, the problem is not with "Republicans" as such but with that small vocal extreme right minority from the Tea Party who signed a pledge of no tax increase.
Politically, they prefer to see the fiscal cliff wirth automatic tax increase so they can vote next month for tax decrease from the higher level (Clinton era level)
Politics. Nothing but politics.
I expect the Tea Party to be wiped out at the 2014 Congressional election.
The problem is not just the pledge. It is the fact the Tea Party members refuse to consider any flexibility about it.
From the Tea Party website:
http://www.teaparty.org/house-gop-calls-off-vote-on-boehners-plan-b-17524/
In simple terms, BOTH parties realize the USA cannot continue to run annual deficits exceeding one trillion dollars.
At least 400 to 600 billion dollars have to be trimmed from the deficit.
While both parties agree that the solution is to increase revenue and lower expenses, the Democrats favour mostly revenue increases while the Republicans favour mostly spending reduction.
So far, it has been impossible for the Republicans to identify specifically what spending reductions they want - that would be political suicide. They expect the White House and the Democrats to idenfify the spending cuts.
It is a typical Catch-22
"CNN today, it seems that the fiscal cliff is inevitable."
As predicted earlier, CNN was wrong and the "fiscal cliff" has been avoided.
Of course it does not mean that the US fiscal problems have been solved. Far from it. This first step increased revenues slightly. Tough decisions still have to be made to increase revenues even more and - that will be the tough part - cut spending without affecting the American economy.
Considering the extreme partisan atmosphere in Washington ("us vs them" or "we're right they're wrong") Congress faces many challenges in the next few months.
And whatever decisions they reach will affect Canadians and the Canadian economy.
"Seems more like it has just been delayed."
Many problems have been shelved for a few months.
However, the "fiscal cliff" as such - represented mostly by the elimination of the "Bush tax cuts" scheduled to end December 31st unless extended has been fixed permanently.
The new law makes the tax rate cuts permanent for 98%+ of Americans. Only the very high income earners will see their tax rate revert to the Clinton era level.
As stated earlier, most other problems related to more tax revenue (tax reform - closing loopholes for corporate tax) and reducing expenditures have yet to be addressed. Solutions will be painful.
Congress also has to address the so-called "debt ceiling" legislation within six to eight weeks. Lots of bitching - from both sides - yet to come!
