Gloomy predictions as Washington approaches the 'fiscal cliff'
It's still possible that the 'fiscal cliff' with its automatic tax increases and across-the-board spending cuts can be avoided. But the clock is ticking toward Jan.1, and most lawmakers are pessimistic.
The New Year may be more than a week off, but realistically Congress and the White House have less than that as the clock ticks toward the “fiscal cliff” with its automatic tax increases and across-the-board spending cuts that could throw an already-weakened economy into a tailspin.
On the Sunday before Christmas, lawmakers worried and postured, with a few – very few – expressing just a bit of optimism that anything would be done in time.
"We can do better and we should do better," Senate Budget Committee chairman Kent Conrad said on “Fox News Sunday.” "I would hope that we would have one last attempt here to do what everyone knows needs to be done: which is a larger plan that really does stabilize the debt and gets us moving in the right direction.”
For now, says Senator Conrad (who’s retiring), Speaker John Boehner and the White House should “split the difference” on the most recent offers from both sides, resulting in $1.45 trillion in spending cuts and $1.15 in revenue for a combination of $2.6 trillion.
“You couple that with the $1.1 trillion that’s already been done [in the Budget Control Act] and you’re at $3.7 trillion,” he said.
That leaves a lot of heavy lifting, Conrad concedes: “Is it perfect? No. Is it everything we’d hoped for? No. Does it match what Bowles-Simpson did? No.”
The general mood Sunday was well expressed by another senator about to retire, Joseph Lieberman.
"It's the first time that I feel it's more likely we'll go over the cliff than not," Senator Lieberman said on CNN’s “State of the Union.” "If we allow that to happen it will be the most colossal consequential act of congressional irresponsibility in a long time, maybe ever in American history because of the impact it'll have on almost every American.”
Joining Conrad on Fox News, Sen. Jon Barrasso (R) of Wyoming said tumbling off the fiscal cliff is inevitable.
“I believe the president is eager to go over the cliff for political purposes,” he said. “He senses a victory at the bottom of the cliff.”
Obama already has scaled back his ambitions for a sweeping budget bargain. Before leaving the capital on Friday, he called for a limited measure that would extend the Bush-era tax cuts for most people and stave off federal spending cuts. The president also urged Congress to extend jobless benefits for the long-term unemployed that would otherwise be cut off for 2 million people at the end of the year.
But reverting to higher tax rates for even the wealthiest Americans remains a show-stopper for many tea party Republicans in the House of Representatives.
Judging by the latest twists in the drama – including House Speaker John Boehner’s inability to get his own party behind his “Plan B” – plus public opinion polls showing Obama with a much better job rating than Mr. Boehner and the GOP seen as mostly to blame, Obama in fact may be more inclined to hang tough.
“The truth of the matter is, if we do fall off the cliff after the president is inaugurated, he’ll come back, propose just what he proposed … and we’ll end up adopting it,” said Sen. Johnny Isakson (R) of Georgia on Fox News. “Why not go ahead and act now?”
Why not, indeed, said Sen. Amy Klobuchar, also speaking on Fox News.
"It is time to get back to the table," said the Minnesota Democrat. "And I hope if anyone sees these representatives from the House in line shopping or getting their Christmas turkey, they wish them a merry Christmas, they're civil, and then say go back to the table, not your own table, the table in Washington."
This report includes material from the Associated Press.