With just three days to go before tax rates rise for all Americans and 1 trillion dollars in spending cuts over the next decade are triggered, President Barack Obama announced to the American public that the time for negotiations had not yet passed.
“This is déjà vu all over again,” he declared, adding that, “outside of Washington, nobody understands how it is that this seems to be a repeat pattern.”
President Barack Obama and U.S. congressional leaders agreed on Friday to make a final effort to prevent the United States from going over the “fiscal cliff,” setting off intense bargaining over Americans’ tax rates as a New Year’s Eve deadline looms.
What they did agree on was to task Harry Reid, the Democratic Senate majority leader, and Mitch McConnell, who heads the chamber’s Republican minority, with reaching a budget agreement by Sunday at the latest.
“The hour for immediate action is here. It is now. We’re now at the point where in just four days, every American’s tax rates are scheduled to go up by law. Every American’s paycheck will get considerably smaller. And that would be the wrong thing to do,” Obama told reporters.
McConnell described Friday’s White House summit, also attended by Democratic House Minority Leader Nancy Pelosi, as “a good meeting.”
He commented: “So we’ll be working hard to try to see if we can get there in the next 24 hours. So I’m hopeful and optimistic.”
More importantly, the president declared that if Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) are unable to reach a deal, he wants an up-or-down vote on a small package that would extend tax cuts for middle class Americans, continue unemployment benefits and lay the groundwork for future deficit reduction.
It would be much easier if Reid takes the suggestion made by McConnell and House Speaker John Boehner (R-Ohio) to start with one of the pieces of legislation already passed by the House.
According to the Huff Post, Reid has steadfastly refused to do so, favoring a Senate-passed bill to preserve Bush-era tax cuts for income under $250,000. That bill, however, faces procedural objections from the House, which under the Constitution is supposed to originate tax measures.
Reid warned: “Whatever we come up with is going to be imperfect. Some people aren’t going to like it, some people will like it less. But that’s where we are. We have an obligation to do the best we can.”
The action now moves to the Senate, where Reid and McConnell have precious little time to hammer out a deal. House Speaker John Boehner (R-Ohio) emphasized during Friday’s White House gathering that he would not move legislation to resolve the fiscal cliff without seeing the Senate act first.
The Reuters says, a total of $600 billion in tax hikes and automatic cuts to government spending will start kicking in on Tuesday – New Year’s Day – if politicians cannot reach a deal. Economists fear the measures will push the U.S. economy into a recession.