US PRESIDENT Barack Obama is urging Congress to reach a deal to avoid the fiscal cliff, saying the nation “can’t afford a politically self-inflicted wound to our economy”.
Obama said in yesterday’s weekly radio and internet address, that he believes Congress leaders may be able to reach an agreement that can pass both houses before taxes rise and spending cuts take effect at the end of the year. He urged “Washington politics” to not get in the way of “America’s progress”.
In the Republican address, Missouri Senator Roy Blunt said “inaction shouldn’t be an option” and the nation could avoid going over the cliff if Obama and the Senate worked with Republicans to solve the problem.
After a meeting last Friday with congressional leaders, an impatient and annoyed Obama said it was “mind boggling” that Congress had been unable to fix a mess everyone had known about for over a year.
He then dispatched Senate majority leader Harry Reid, a Democrat, and minority leader Mitch McConnell, a Republican, on a 48-hour mission to come up with a bipartisan bill to break the “fiscal cliff” stalemate in the most partisan and gridlocked US Congress of modern times.
Reid and McConnell, veteran tacticians known for their own long-running feud, have been down this road before. Their last joint venture was the deal in August 2011 to avoid a US default that set the stage for the current mess. That effort, like this one, stemmed from a grand deficit-reduction scheme that turned into a bust.
But they have never had the odds so stacked against them as they try to avert the “fiscal cliff” – sweeping tax increases set to begin on Tuesday and deep, automatic government spending cuts set to start on Wednesday, with a combined worth of $600 billion.
The substantive differences are only part of the challenge. Other obstacles include concerns about who gets blamed for what and the legacy of distrust among members of Congress. Any successful deal will require face-saving measures for Republicans and Democrats alike.
“Ordinary folks, they do their jobs, they meet deadlines, they sit down and they discuss things, and then things happen,” Obama said. “If there are disagreements, they sort through the disagreements. The notion that our elected leadership can’t do the same thing is mind-boggling to them.”
The core disagreement between Republicans and Democrats revolves around the low tax rates put in place under Republican former president George W Bush that expire at the end of the year. Republicans would extend them for everyone. Democrats would extend them for everyone except the wealthiest taxpayers.
The first step for Reid and McConnell may be to find a formula acceptable to their own parties in the Senate.
While members of the Senate, more than members of the House of Representatives, have expressed flexibility on taxes, it’s far from a sure thing in a body that ordinarily requires not just a majority of the 100-member Senate to pass a bill, but a super-majority of 60 members.