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The Way Off the Fiscal Cliff Starts to Become Clearer

by Keith Koffler on November 15, 2012, 5:01 pm

I don’t think the government is going over the fiscal cliff. That is, I believe Republicans and President Obama will reach a deal on tax increases and spending cuts that will avert cuts that everyone agrees will harm the economy and undermine national security.

The signal comes in this paragraph in a Washington Post article running today. It notes that in Wednesday’s press conference, Obama said he was sticking with his insistence that the Bush tax rates for the wealthy go up. But what he craftily omitted is by how much they have to go up.

But in a break with the position he took on the campaign trail, Obama said he would not insist on drawing “red lines” around 39.6 percent, the rate in effect for top earners during the Clinton administration. Democrats familiar with White House thinking said Obama is willing to set the top rate somewhat lower — around 37 percent or 38 percent — as long as the overall burden grows for families earning more than $250,000 a year.

That will have to be the locus of a deal. Obama was right about one thing in his press conference – every voter knew what his position was on taxes. In a campaign mostly bereft of ideas, the one Obama was clear about was that he wanted to raise income tax rates on the rich. He cannot possibly back off this demand.

Republicans can claim a victory if they keep him from restoring the old Clinton-era rate.

I’ve seen many of these cliff hangers in my years covering Washington. They always include lots of posturing, grievous handwringing about “How can we possibly let this happen?” and then at the last very moment, a deal.

What’s more, the holidays are coming. Everyone is tired, and everybody wants their holiday. I mean it, these things really matter for lawmakers, and everyone else in Washington. John McCain lamented to me a couple of years ago that protracted budget negotiations had “ruined Christmas.”

I felt the same way, having to cover the damn thing, and I’m Jewish.

{ 28 comments }

Sadie November 15, 2012 at 5:16 pm

Wheww..a close one for Holly.

The Obama administration named Holly Petraeus–wife of retired Gen. David Patraeus, who resigned last week as CIA director after revealing he had had an extramarital affair–to a $187,605-per-yer job in the newly formed Consumer Financial Protection Bureau (CFPB).

Keith, if wasn’t the Christmas holidays, it would be the summer break, the spring break or another election cycle or any week that has a Tuesday.

Susan November 15, 2012 at 5:54 pm

Why is she being paid off? To keep quiet on what she has been told about Benghazi? Nobody can tell me she didn’t know what was going on with the military brass groupies. There is no honor and integrity in those people.

http://www.americanthinker.com/2012/11/generals_and_geographic_bachelors.html

Sadie November 15, 2012 at 6:17 pm

Holly Petraeus was quoted as being “furious” (as in Fast & Furious) and yet … no problem working for the admin.?
Jill Kelley and her twin sister are in debt up the kazoo. The women are also a local story here in the Philadelphia area…”Kelley, 37, hails from a Lebanese family that emigrated to Philadelphia in the mid-1970s”.
My take is that everyone involved has dirt on the next. It’s CYA on a grand scale.

Girly1 November 15, 2012 at 8:22 pm

Heard a story today about the ‘twins’ from a local talk radio show. Seems they crashed a fundraiser for Marco Rubio in 2010. They were scantily dressed, loud-mouthed and left as soon as they stuffed their faces. Never sent a donation to Mr. Rubio.They’ll probably get their own reality show when this is over – the Florida Kardashians.

scottso November 15, 2012 at 8:24 pm

that is the first time i heard this Sadie! I thought you were joking and had to look it up myself.

Does a deputy director need to be paid $188k job???
seroiusly?

Sadie November 15, 2012 at 8:53 pm

scottso – you doubted Sadie?

; )

Karl Quick November 15, 2012 at 5:22 pm

Way too insignificant to matter.
All of these tax proposals are chump change compared to $40B/mo in QE3. The Fed is inventing more money that canceling ALL the Bush Tax Cuts would bring in. It is a FARCE.
No one should vote for anything until the CBO scores it.
Certainly not if the President can say he can’t comment on Benghazi until the investigations are complete! …if he can put things off, so can congress.
Simply declare be executive order that NOTHING changes 1/1/13… after all, he doesn’t seem to follow other laws he dislikes, why fall off a cliff just because the law says to! ….unless it is litterally falling off a cliff and I’d pay to watch him follow that law. :-)

WMP November 15, 2012 at 5:48 pm

What a crock. I know compromise will ultimately rule the day – big deal – 37 or 38 percent instead of 39.6 and that saves his face. The $250,000 needs to be changed. Simply – that is not rich – If you are a wage earner and making $250,000 singly or jointly with a spouse that is a decent living – but those same people are the ones making some of the major purchases that keep people working. If you are self employed and have employees and are making $250,000 – you simply aren’t rich. Where they came up with this arbitrary figure is beyond me. I just read an article about the Democrats adding more to their demands – i.e. for every dollar in spending cuts there should be a dollar increase in taxes. Can someone please explain to me how that solves our fiscal problems – BTW they also took any entitlement cuts off the table. Well they did say as long as it didn’t affect the overall benefit to those receiving – or something like that. If they really care, they will all agree to once again kick the can down the road next year so they can “have some serious” negotiations (if that is even possible anymore) and when people haven’t just been elected or are currently running for election. Maybe cooler heads will prevail at that time.

HOWEVER – I don’t care about their holidays. They are paid to do a job. If I get a rush at work and it requires working on a weekend or into the night – that’s what you do – even if you are dogged tired. Additionally, there are so many businesses that shut down now between Christmas and New Years and if you didn’t have or weren’t able to save vacation time you take that without pay. Not a bad idea for our politicians to experience. I’m sick of all of them.

srdem65 November 15, 2012 at 6:47 pm

Now I know I have PTSD, because I agree with everything you wrote.
I’m sick of the lies, the spin, the posturing and the stupidity of our elected officials.

As for the Christmas holiday or whatever they call it now, umpty-millions of Americans are NOT having a Merry day. Those without jobs and without hope of getting a job have suffered because of those dolts in DC, so the least they can do is work until the job is done..

WMP November 15, 2012 at 6:55 pm

You are right – those who take a week without pay are lucky. Those without jobs and without hope of getting a job have suffered far more.

Just finished reading an update on the Hostess strike. The Union says – they have taken all the cuts. Because of poor management they shouldn’t have to be the ones making the concessions. So let me get this straight – poor management (maybe), but work at a pay cut and reduced benefits or don’t have a job…..if you feel that strongly about it then be willing to face the consequences. You can’t force companies to hire more people, not lay people off, not implement pay cuts, etc. My goodness – the losses released today for the US Post Office and their doors are still open…..

One more comment – for those of you who may think $250,000 is rich – maybe in Arkansas or North Dakota or some other states, but in California that is a mid to upper middle class income and now the voters passed another tax increase – Someone making a $1,000,000 in California will be paying 52% of their income in income taxes if the income tax for the “wealthy” increases to 39.6%. That is criminal – no one – not even the richest of the rich, should have to pay 52% of their “income” in income taxes.

Cooper November 15, 2012 at 7:15 pm

It should go over the cliff and let the chips fall where they may. Let’s see what that incompetent, arrogant ass of a president will do then. The sequestration deal was the demtards way of kicking the can down the road. Let them have their cake and eat it too.

SnarkEsq. November 15, 2012 at 7:29 pm

I totally agree. I don’t even care anymore.

StillOvertheOs November 15, 2012 at 8:40 pm

Also agree

gracepmc November 15, 2012 at 8:04 pm

I am opposed to any tax rate increase on anybody. This class warfare, redistribution ideology is crap. I expect the Republicans to cave. I no longer have any confidence in any of them, and no longer care. They all lie. And we should believe the Dems and Mr. Revenge are serious about the fiscal health of the US since Patty Murray (?) has said the Dems probably won’t get around to a budget again. If the most basic financial tool is left undone there is nothing serious about cutting back. This Administration is a joke — a sad, sick joke and anyone who participates in this wholesale looting of the US should be ashamed. And Keith, all due respect, this problem needs way more than the bandaid. This country is going to bleed out.

gracepmc November 15, 2012 at 8:07 pm

Anybody want to take any bets on how long Israel survives. No doubt they will fight, But they can no longer count on the US.

StillOvertheOs November 15, 2012 at 8:38 pm

What i have yet to understand — Obama struts and gets belligerent — talking about vetoes – what he will and will not sign what he will and will not answer — and the Senate, Congress, Justice Dept, and media fold like limp towels.
The Senate and Congress at one time had courage and integrity and fortitude. Now they have become puffed up yes men and women. There was a time when a president dared them to investigate him or go after him and they did. Now they just cower down like whipped puppies.
The media are his personal lapdogs. Obama is a dictator and a tyrant and America allows it. There are no checks and balances anymore.

StillOvertheOs November 15, 2012 at 8:39 pm

Let us go off the cliff — call his bluff – make him responsible and make him answer for all of it.

Quintis Arrius November 15, 2012 at 8:44 pm

In the book the” Moon is a Harsh Mistress, ” by Robert A. Heinlein the independence lunar flag had a simple abbreviation on it, ‘tanstaafl. “there ain’t no such thing as a free lunch.” Put it another way, what ever you get, you will pay for…eventually. For all the posturing the pres and the congress will do in the coming months, I am not hold my breath that any “compromise” will be to anyone’s liking. And all Americans will pay for what they are eventually going to get.

StillOvertheOs November 15, 2012 at 8:57 pm

When did our joint Congresses and our Supreme Court become so afraid to do the right thing and to honestly and with integrity do their jobs? When did our leadership run in fear and cowardice from an elected president and his administration? When did our media shift from the position that “without a free press there is no freedom” ?
Where are the voices calling out for truth and justice?

Sadie November 15, 2012 at 9:02 pm

And all Americans will pay for what they are eventually going to get.

Well..that eliminates all elected politicians, czars and appointees, the cabinet ….did I miss a few?

Quintis Arrius November 15, 2012 at 9:18 pm

Actually, I am afraid the pain will be distributed across the board. Our society and economy is pretty interconnected.

Susan November 15, 2012 at 9:39 pm

That eliminates every member of the ruling class. They’ll still get theirs, and we’ll be forced to pay for it…

Angelo Codevilla’s article from 2010 is even more relevant today…
http://spectator.org/archives/2010/07/16/americas-ruling-class-and-the

AlreadyAdjusting November 15, 2012 at 10:45 pm

Neither party wins and once again, those who were elected to hold the line and not raise taxes are capitulating — again. Once again, Boehner and McConnell are all talk and no walk. The administration continuously uses terms like outrageous and offensive and racist. The administration bullies, demands,, ignores, browbeats, humiliates, intimidates, obfuscates, celebrates, divides, denigrates, bribes in their own back door ways anyone or any media or business that disagrees with them or demands they perform the jobs for which they were hired.
So no one wins — the Republicans will be shown to be lacking integrity for not staying their ground and the administration will be shown to be lairs again for not working together.
The biggest losers are the American people — the ones who voted against his re-election and those who supported and voted for him. Those who opposed another four years under an Obama tyranny will not be surprised, those who opted for the new “hope & Change” will be caught unaware.

ElmerF November 15, 2012 at 11:45 pm

I’m all for taking the Cliff.
I’ll wind up paying a bunch more taxes, but I’ll survive.
Individuals and couples making < $100,000 will be utterly shafted by increased withholding. I'll feel for them.
The consumer-based economy will take jolt. Uncertainty will cause business and investment planning decisions to be put on hold.
Yeah, I'll take the Cliff. It won't be pretty. But maybe it will cause somnolent Americans to wake up and start taking responsibility for themselves and their governments. Bring it on and shoot the hostages.

cincycinco November 16, 2012 at 9:14 am

Of course they’ll come to an agreement! Cowardly RINOS let by Weak-Tea Boehner will cave in to Angry Little Caliph’s every, every whim in a misguided attempt to preserve some semblance of power for themselves.

“Misguided”, because they will STILL be blamed for everything when Obama’s policies inevitably fail, and a whiny and willfully uninformed electorate will continue to believe both that the failure IS due to Republicans “obstruction” of the wise Obama’s policies, and that it’s continues to be George Bush’s fault even as they increase their demands that they be given an ever-increasing share of other people’s property by the Government.

I wouldn’t worry about the Fiscal Cliff. I’d worry more about National Bankruptcy, ensuing riots, and possible civil war when Obama’s house of cards fails and falls from its own weight.

cincycinco November 16, 2012 at 9:47 am

‘What’s more, the holidays are coming. Everyone is tired, and everybody wants their holiday. I mean it, these things really matter for lawmakers, and everyone else in Washington. John McCain lamented to me a couple of years ago that protracted budget negotiations had “ruined Christmas.”’ – Keith Koffler

Well, it doesn’t mess with Ramadan, either Eid, Muharram (just past!), Mawlid al-Nabi, 9/11, or any other celebration on the Islamic calandar, so Hopey himself doesn’t care. It’s ALL good with the O’s!

Danceswithtruth November 16, 2012 at 10:23 am

There should be no increase of taxes for anyone. Until the government can be responsible with what they currently get, they shouldn’t be given any more. Show me you are serious about cutting out the waste, the inefficiencies, the fraud, the pork, etc. and then we can talk about additional taxes. However, if you get serious about the mentioned items (and then some), additional taxes will likely not be needed.

I bet not one of these morons runs their household finances like they are running this countries finances.

FLDemFem November 16, 2012 at 12:26 pm

Actually, Obama did run his personal finances like that. When his book took off, his wife called the money “magic beans” and said that if they hadn’t come in, the Obamas would have been in real trouble. Apparently, living on credit and maxing out everything is not a good way to manage money. It is, however, how the Obamas lived until he got into the Senate and his book started selling.