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Subscribe to RSSUpdated at 5:00p.m.ET: The United States on Wednesday edged closer to the fiscal cliff as Congress waited for President Barack Obama to return from vacation in Hawaii and make one final attempt to avoid huge tax hikes and spending cuts in the New Year.
In the absence of Obama, there was no sign of either side in Congress making an effort to strike a deal. The corridors of the Capitol building were empty except for an occasional police officer, and members' office doors stayed locked.
House of Representatives Speaker John Boehner has not yet set a date for bringing House members back to Washington from their Christmas break, an aide of the Republican leader said. That makes the timing of a vote on any budget deal before December 31 more difficult.
The Boehner aide also said there were no plans for new talks between the top Republican in Congress and Obama, who flies overnight and is due back in the White House on Thursday morning.
The inaction notwithstanding, there was still just enough time to prevent a fiscal crunch that would upset global financial markets and likely push the United States into recession.
Reports of lackluster retail holiday sales added to the urgency for a deal. Shoppers might be spending less this holiday season in fear of looming income tax increases. U.S. stocks fell on Wednesday, dragged lower by shares of retail companies.
President Obama and Congress are set to return to Washington to hopefully reach a deal on averting the fiscal cliff before the New Year. Luke Russert and NBC News' Kristen Welker and Mark Murray discuss.
A modest, last-minute measure in Congress to avoid deep spending cuts set for January 1 and most of the tax hikes could pass the Democratic-controlled Senate by the New Year, although Republicans would need to agree not use a procedural roadblock known as a filibuster.
But senators probably would not make the effort unless there was a strong signal from Boehner that the House would find a way to go along.
A Senate Democratic aide downplayed chances for votes this week in the Senate, but suggested there could be legislative movement at the weekend.
"We can't do anything until Republicans either give us the 60 votes," which are needed to advance legislation without long procedural delays, or allow a short-cut that lets bills pass on a simple majority vote in the 100-member chamber.
The focus in Congress is shifting from broad deficit reduction to narrower efforts to avert the immediate shock of the December 31 cliff dive.
"This is the (emergency) scenario that we have long believed would rise in probability the closer we go to December 31, which essentially calls for extending all the rates for those individuals making under $200K and households under $250K and does not address the debt ceiling or the deficit," analyst Chris Krueger of Guggenheim Securities wrote in a research note.
Republican Senator Kay Bailey Hutchison of Texas, who is retiring at year's end, told MSNBC that $250,000 "is too low of a threshold" for raising income taxes.
She said that in conversations she has had with some Senate Democrats, "they are saying maybe more in the $400,000 to $500,000 category."
Obama himself recently offered to raise the threshold to $400,000, before negotiations with Boehner broke off.
Clock ticking
But even if a handful of Senate Republicans support Democrats on a measure to avoid the worst of the fiscal cliff, time is short.
When the Senate returns on Thursday it is due to work on a disaster aid bill to help New York and New Jersey recover from Superstorm Sandy and other measures.
Recommended: GOP willing to bend on issues after election
In the Republican-controlled House, any bill that raises taxes on anyone would need a rare bipartisan vote to win approval.
All 191 Democrats might have to team up with at least 26 Republicans to get a majority if the bill included tax hikes on the wealthiest Americans, as Obama is demanding.
Some of those votes could conceivably come from among the 34 Republican members who are either retiring or were defeated in the November elections and no longer have to worry about the political fallout.
An alternative is for Congress to let income taxes go up on everyone as scheduled. Then, during the first week of January, lawmakers would strike a quick deal to reduce them except on people in the highest brackets.
They would also pass a measure putting off the $109 billion in automatic spending cuts that most lawmakers want to avoid.
Once the clock ticks past midnight on December 31, no member of Congress would have to vote for a tax increase on anyone - taxes would have risen automatically - and the only votes would be to decrease tax rates for most Americans back to their 2012 levels.
Americans' optimism that Obama and congressional leaders will reach a budget agreement before January 1 has waned in recent days, according to a Gallup poll.
President Obama is cutting his Hawaiian vacation short and heading back to Washington just a day after Christmas. Meanwhile, Congress returns tomorrow with just days left to reach a deal before the looming January 1 fiscal cliff. NBC's Kristen Welker reports.
Fifty percent believe a deal will be reached, a drop of 7 percentage points from the previous week, and 48 percent are doubtful. The poll was taken just after talks ran into trouble last week.
Starbucks Chief Executive Howard Schultz is urging workers in the company's roughly 120 Washington-area coffee shops to write "come together" on customers' cups on Thursday and Friday to send a message to politicians.
"We're paying attention, we're greatly disappointed in what's going on and we deserve better," Schultz told Reuters.
Copyright 2013 Thomson Reuters. Click for restrictions.
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keep allowing your politicians to give your money to all the other countries that hate you and who will use it against the americans!!!!!!!!!!!!!!
america must be full of fools to keep allowing them to get away with that !!!!!!!!!!!!!!!!!!!!!!!
T
For fiscal 2012, the National Debt was $16.07 Trillion, and the estimated Gross Domestic Product (GDP) will be $15.24 Trillion, for a Debt Ratio of 105.4%. This is the first time in our history that our Debt Ratio has exceeded 100% of GDP. Obama's Budget projections indicate it will increase to 119% of GDP by the end of 2016 (when Obama leaves office). Greece's debt crisis began when their Debt Ratio got to 120% in 2009, and when creditors stopped loaning money to Greece, the austerity measures imposed by lenders forced their economy into a severe recession, and unemployment has skyrocketed to 25.4% in November 2012. It's projected to hit 30% in 2013.
In comparison, the average Debt Ratio under Bill Clinton was 64.2% of GDP, and under G W Bush it was only 62.6% of GDP (yes, it WAS lower under Bush than under Clinton).
The 90% threshold rests on a very speculative theory. Data in chart concerning government debt level and its impact over time shows clearly that there is no evidence on causality between economic growth and debt level.
Government debt 1984-1990 (average as % of GD)
GDP growth 1984-1990 (Average change)
Belgium
120,91%
2,79%
Ireland
100,24%
4,45%
Italy
95%
2,81
Japan
68%
5,16%
United States
59%
3,91%
United Kingdom
42%
3,28%
Norway
32,7%
2,87%
Iceland
32,54%
3,42%
Australia
21,9%
3,43%
Finland
15,71
2,77%
Chart 1 Source: OECD and IMF
A list of countries by growth of real gross domestic product at purchasing power parity over time shows also that there is no association between high public debt level and lower economic growth.
Government debt 1979-1990 (average as % of GD)
Per capita GDP growth 1979-1990 (Average change)
Belgium
105,45%
2,1%
Italy
90%
2,4%
United States
50,1%
2%
United kingdom
45,5%
2,1%
France
28,4%
1,8%
Australia
21%
1,7%
Canada
48,4%
1,6%
Chart 2. Source: OECD and U.S. Bureau of Labor Statistics
Macroeconomic data shows clearly that there is no a well-defined threshold of government debt relative to gross domestic product per capita. Given this, there is no justification for rapid, deep cuts to federal spending based on fears of exceeding this threshold.
@ raf
there is a correlation though between large govt debt and the devaluing of that governments currency, hence the creation of bad inflation. why do you think food, gas and other prices are rising so high in the US. the large debt and devaluing of our dollar is why.
Absolute BS. What you are saying is that an individual in debt up to his butt is a good credit risk? LOL!
Why do you think moron the USA LOST it's Triple AAA credit rating? You have to be a total idiot to state that there is no relationship between government debt and GDP producing BANKRUPT nations.
NO ONE , NO GOVERNMENT can SPEND FOREVER on CREDIT and think there will be not repercsussions such as monetary collapse or bankruptcy where no one will LEND YOU MORE MONEY. What a Dumbazz you are.
When the Federal Reserve PRINTS MONEY they have to SELL IT as DEBT to someone, and when other nations will not buy that DEBT anymore then you are SCREWED for sure.
Tee off at 12:00. Let Them Eat Cake ! LMFAO
Once taxes go up on everyone January 1 the Republicans will voter to restore the rates on those under the $200/$250K threshold. The increases on the "rich" will only be enough to fund 8 - 10 days of government and people will see that this debate was all about a fabricated "paying their fair share". When you have 47% of the public receiving the benefits from the 53% who pay federal income tax, you may start to understand what paying your fair share actually means when this little drama does nothing. The real issue is the loopholes, deductions etc in our tax code. The other real issue is you can't just shift trying to pay for everything people want from their government to the top 2% earners. We've become a society of "give me" but tax the other guy and I don't care if we can really afford it or not.
america rewards the bad people just so they can shut them up for awhile...
they give money to the lazy, thieves of america that play the system
they give money to the illegals
they give money to the crooks
they give money to countries that hate them
they reward their bad politicians
something seriously wrong with how you keep rewarding bad behavior...
i can see that's working for america in so many wonderful ways!!!!!!!!!!!
You can't live in St Louis that is a Liberal stronghold
here is my problem, it has taken these politicians how long to compromise and work together for a solution, from a budget, to how to tax? why do you all keep voting democrat or republican since they cant seem to work together is beyond me. i think its time for us to clean house. remove all the current politicians from office, both democrat and republican and put the average hard working middle class American in charge. not the current lawyers and career politicians we have in office. maybe some actual accountants would be better in the office.
When in doubt vote them out. Good advise that no one seems to understand. We have career poloticians because we re-elect them. Start turning them over routinely and the problem will solve itself.
Will President Obama exert any effort to salvage his grand bargain, or, will he meet with only Democrats and try to force through a partisan package?
Can anything be enough actually compromise to pass both the House & Senate?
How can Sen. Reid initiate a bill if all fiscal bills have to originate in the House?
For these answers and more, stay tuned as our elected leaders march us towards the "self-inflicted" fiscal cliff.
See how well raising the taxes on the wealthy is working in France. They can afford to move to another more tax friendly country. Or did you not get that part?
its all about revenge! The money isnt enough to do anything. So there has to be a reason for it......R E V E N G E!
ThePubesAreCrybabyLosers
It's hard to believe that a majority of people would rather have someone else pay the bill.
It's not hard to believe how politicians use human nature as a political weapon to divide fellow citizens.
Correct! So why not close the loopholes....no lets grandstand for the idiotic base.
Taxation Without Representation ! Got to love it ! Thanks Butcher of Benghazi Happy Kwanza ! LMFAO
KC, something very wrong with you, Butcher really, and making snide comments regarding Kwanzaa and attempting to tie the President into a Harvest Festival makes no sense---Happy War New Year War Criminal Cheney and Bush, owner and operator's of that slaughterhouse in Iraq.
And you, skyparrot, have to do the same.
I would hope not all Republicans are that extremists. Any deal where you get 98% of what you wanted is a great deal. Arguing against that fact is just plain irrational.
EffortPA
How do you come up with that?
I have tuned out TOTALLY and I am a political junkie. I simply cannot stand it as these charlatans (mostly tea baggers) reap the benefits of being in the federal government, take the health insurance provided and take a pension of full pay when they are out. What a gig. It's a great one if you can get it. So hence they lose me ESPECIALLY Congress who do not know their posterior from their elbow and in reality do not care about the country they SAY they care about so much.
So I say, go bang your own heads against the wall. I am fast forwarding EVERY newscast when it deals with the "cliff" the bump the curb or whatever they call it. I'm DONE. bottom line IF those egregious specimens of humanity cannot see that those at the top of the ladder NEED TO pay more and we are not asking them to pay much at all then I give up!
If they did what the president is asking the country would ZOOM into some kind of prosperity but that is NOT what the Republican baggers are all about. They are about nailing this man in the White House to the wall to fail and if it takes making the country fail to do it they WILL!
I can only HOPE the rest of the country sees just how mean and loathsome they are; people who would hurt their own children -- amazing and that the electorate make them PAY BUT GOOD in 2014 both nationally and in state and local elections. IT is ONLY when their own well being is threatened and they are FORCED to do something positive for the country that MAYBE some in that rancid party will do the right thing. I know who I cast my ballots for and will gleefully in 2014. I hope many on here will tune out too and make my sentiments yours. Write, call or do whatever you have to do which I have done to make it known that a deal favoring the MIDDLE class MUST be done. I'm DONE listening to anything else about the rotten cliff!
LOL! Get a job you welfare junkie.
Natalie, Come to Detroit and you will see first hand the end of the means you are talking about.
She, come to Naples, or West Palm Beach and see what Natalie's talking about--jeez.
Natalie
The Democrats are paid the same as the Republicans.
The Democrats are the wealthier party in Congress.
The Democrats' "fight" for the poor and middle class hasn't improved the "lifestyle of the not rich and not famous".
Simply using the phrase "tea bagger" documents your ignorance.
LMAO......PPPPPParrot! Your comparing Florida anywhere with Detroit? Please I have a home in Port Richey im in Florida every year for 2 months. Its NO where close to Detroit not even on the same planet.
Frankly there is no reason to keep kicking the can down the road. Just let the damn thing go bust so the American people can get a good dose of reality. Perhaps that will get everybody thinking about what needs to be done.
I agree! At least if we go over the cliff the very people who voted Obama in will have to "pay their fair share" for a change.
Knew it wouldn't be long before somebody went after the working poor, elderly, disabled, and the hungry and those folks that get refunds which I am sure Oreo has had the pleasure of receiving. Hypocrites.
Eric, Odumbs**t has been on vacation since January 2009. How phuking admirable for this POS to come back and actually participate, instead of deligate, in his damn job. All of you dumbasses out there who support this loser need to be at the head of the line when it comes time for psychological testing. Along with everything else free from the government , my tax dollars must be buying some damn good drugs , and delivered in the form of foodstamps. Your not supposed to lick them.
Queue the Looney Tunes theme.
@ gerald
not just obama has been on vacation since 09. look at the amount of days the house and senate have spent on the hill since 2009. the days they have been in office have been the lowest in US history. i think its time for us to clean house on them all, from the president, to the senate, to congress. we need to stop voting democrat and republican, we need to get a third party going made from the middle class, get them in office, and start working towards a true solution.
Gerald, Obama actual vacation days---66 ist term
W actual vacation days ist term---169, W, over 900 Working Vacation days for W tenure all on the Tax payer dime, 77 trips to the weed infested ranch, renovations at the crab grass ranchero, all on the tax payer dime. The President has not been on vacation from 2009 its just usual right wing methane meter spewing out more toxic fumes with derogatory and demeaning comments, i.e., Lily Ledbedder Act, ACA etc., get over it Gerald, you lost.
This is all made up hilarious stuff. It is made up to create urgency and fear in the public. These "leaders" can do or change anything they want by elimination or retro-activity. This can all be ignored by getting on with your life. The few are always going to make the rules for the rest of us.
Honorable POTUS Obama,
This is a transition of momentous opportunity, exploit and advance
representative fairness. Expose outdated nuances of constitutional
convenience, as these have been exploited to thwart and deny a
democratic representation universal fundamental 'one man one vote'.
The process of representation needs reform. The Federal IRS should
share revenue with all three levels of government.
The importance of zero business taxation is in lowering the price
of goods, thus monetary hoarders are assured of fair exchange. And
poverty itself benefits with lowered costs. Thus income only taxation
is favored, and a transparent indication of government efficiency.
Boehner, Obama is showing great restraint as to actions of
Republicans of repression of the poor by taxation, repression, and
restrictions of the freedom of group bartering. The 1960's tax rate
was 91.5% at $400K and the present 15% for the major income sources
of the rich, versus 35% for the major income sources of the 98% is
NOT ACCEPTABLE. It is not christian to tax at subsistence levels. Tax
...Tax the money, not the people.
Congressional House is at 11% approval rating. The people have
lost representation, and need to reclaim the House. Since we cannot
support perpetual re-election 2 year posts, we should term limit the
House to non-consecutive two year posts. When filibuster or deadlocks
occur the people should vote on all pending resolutions put before
the House. End House districts (and the electoral college system) by
popular vote, allowing candidates to combine votes to achieve
selection between those on the ballot. These rules would invite third
parties. Let the people be represented over the parties. How low can
the Congressional House approval rating reach before a House
Convention is called for
You are a liberal idiot. Good grief, get a clue.
Despite being on the edge of a "fiscal cliff" the two parties cannot come anywhere near a deal. This is a very clear demonstration of just how screwed up the party system has made our government. If there were no parties, we would have a deal by now because the politicians would be working for their voters, instead of their parties. I wish it would change, but the chances are slim. The vast majority of adults in this country don't have the backbone to change it. Too many sheep and not enough lions.
This entire article and the fiscal cliff are pure rhetoric to keep the people from seeing the truth. The Liberal media only works to keep shielding Obama from blame and criticism. Look at the economic report from the retailers about a disappointing Christmas shopping season. Face it and accept the truth for a change Liberals as this is a byproduct of a faltering and continued failed economy. Yes all you doughnut heads supported Obama again despite his obvious failures to lead the nation. IT IS ALL ABOUT THE ECONOMY STUPID! No jobs equal no money and no shopping and no economy. Why is that so difficult to understand? You bunch of bonehead Obama supporters who think we need global warming, gay rights, solar power, food-stamps, extended unemployment, etc. benefits need to pull your heads out of your arses and realize we must work our way from under these failed policies. There are not enough rich folks to sponsor everyone who does not want to work. Now lets roll up our sleeves and absorb a big dose of honesty and reality and get something done like create livable wage employment.
Larry, your head is so far up your arse that it has passed through your big and small intestines, stomach, esophagus out your big mouth and back into your arse again!
Well said Larry..... the Libidiots keep punishing the "goose that lays the golden egg", private sector business.
These boneheads are too thick to realize that without a flourishing private sector creating wealth (and tax revenue) the wheels fall off everything.... which is what's happening right now.
JOBS LEGISLATION BLOCKED BY HOUSE REPUBLICANS
corporations that ship American jobs overseas. [Vote 19]
Vote 189]
[Vote 710]
[Vote 715]
BigBadBoob is a great example of a Libidiot bone head........ no logical debate, just shoot the opposition.
....and these bafoons nullify MY vote!
morbass..... these Democrat "jobs bills" did NOTHING to create Private Sector Jobs which fuels the economy and tax revenue. They were created to Grow Government & protect Obama's chief contributors... the unions.
Hey Pube... the representatives that I SENT TO Washington were Conservative Republicans... they WON BIG!
I expect them to REPRESENT ME and FIGHT my Country's slide into Socialism led by Comrade Obama!
Agree with The!
So you think taxing the top 2% is going to fix this problem? Good luck with that
They want revenge, that can be the only answer. And I agree, let them have it everything all of it. Double down on all of it. I beleive we owe it to them to send money to all unions public and private. Do what the city council in Detroit wants and bail them out. California too as much as they want. Do this before 2014 so we can see what this will do to us. I want a quick fast bleed not a slow drawn out one.
This is the GOP agenda of which they are so proud:
1. Tax Policy: Tax poor and working people but not the
rich;
2. Wage Policy: Encourage wages in the U.S. to fall to
third world levels;
3. Trade Policy: Pass trade laws that make it easy for
companies to send jobs overseas;
4. Healthcare Policy: Pass laws that enable only insurance
companies to control who gets health care (including seniors) and who
doesn’t
5. Education Policy: Replace public education with out of
pocket private schools and home schooling;
6. Infrastructure Policy: Refuse to invest in crumbling
public infrastructure such as highways, bridges, and sewer systems;
7. Environmental Policy: Pass laws and weaken regulations
that enable companies to pollute the environment;
8. Energy Policy: Pass laws that enable gas and oil
production and prices to be controlled by a few large companies; Make
sure that there is no longer any research or work on alternative
energy sources; Keep defense spending high to protect non domestic
oil production;
9. Civil Rights Policy: Repress rights for women and
minorities and repress voting participation;
10. Social Policy: Divide the American people on cultural
issues (religion, sexual orientation, gun rights, etc);
11. Political Method: Instill fear in the American public
through manufactured crises and created "boogeymen". Then
attack political opponents by claiming to be more "patriotic"
and the better keeper of "American Values" than they.
12. Voter Suppression: making it more difficult if not
impossible for literally millions of ELIGIBLE voters to cast their
ballots, which is flagrant vote tampering and corruption.
Let's go over the cliff,life will happen,,,,I'm ready
Can't do anything about it anyway!
Nothing will happen,,,,dam people are stupid
The mms creates false fear,,letsmgetmthengop dems off the tax cuts welfare and the corps,,,ware
Time to,remove,all of that and Ben Benares
I thought donkeys were used to keep from going off the cliff?
Ahhh yes, a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.
Is that you Ayn Rand? Lol. The problem couldn't be the 1% which buy the politicians and the media and run this country? In America we follow the Golden Rule. Those with the gold make the rules.
This would be great but if you live in a society that doesn't take care of the least fortunate, you don't live in a society.
Nowhere in the world has a system that doesn't care for the poor. We can discuss where we draw the poverty line, but poverty exists and needs to be addressed.
Welfare population,,end the tax cuts
This started with last years bill to raise the debt ceiling. Basically, the republicans said " We are not going to let you do your job unless you let us shoot ourselves in the foot" and President Obama said "Well, .. ok".
They voted for this cuts and please let them start. It is the only way there will be any cuts. They have no balls and should have all been voted out of office.
I second that!
Well Mr. Orange man, guess someone will be snatching the gavel from you soon!