Republicans and Democrats at a stand still on Fiscal Cliff

Can Republicans and Democrats agree on fiscal deal?

 

Just weeks until the fiscal cliff and Democrats and Republicans are back to where they started. Negotiations are at a standstill and neither party can agree on how much government spending should be cut and how much taxes should be raised.

What is clear is that both sides consider the other party to blame. Boehner and other Republicans note that President Barak Obama has failed to provide the kind of fiscal leadership this country needs, and it is time for him to “get serious” and provide more information about what the White House is willing to consider. According to House Speaker John Boehner, there has been “no substantive progress” in two weeks as Republicans wait for the White House to provide some ideas for significant tax cuts to help avoid the fiscal cliff.

Official portrait of United States House Speak...

Official portrait of United States House Speaker (R-Ohio). (Photo credit: Wikipedia)

Senate Democratic leader Harry Reid offers a retort that he does not “understand Boehner’s brain.” And Democrats argue that their ideas are clear, but Republicans simply do not like them. Obama is still suggesting that “middle class tax cuts should be made while taxes on capital gains, dividends and the top marginal rates are increased on the wealthiest Americans.”

Republicans argue that although the suggest tax increase would generate some income, which is estimated to be about $600 billion, this tax increase does nothing to trim the Federal deficit or substantially avoid the fiscal cliff. The Democrat’s approach seems to be unrealistic and fails to address the most pressing issues of this country.

What does the White House say? They say, “It’s time for Republicans in Washington to join the chorus of other voices — from the business community to middle class Americans across the country — who support a balanced approach that asks more from the wealthiest Americans.” Jay Carney, the White House spokesman adds that this debate about how to avoid the fiscal cliff has been made for the last year and the president’s aim to have wealthy Americans pay more has been a consistent message from the president.

What if Republicans and Democrats cannot agree? Although it is unlikely, if both parties cannot come to some type of agreement there will be automatic tax hikes and spending cuts made on January 1, 2013. The country also faces challenges as we reach the Federal debt ceiling limit as soon as February or March of next year. The debt ceiling battle promises to be a contentious as last time when there were threats of a governmental default on its debt obligations and one credit agency lowered our credit rating, the first such move in history.

What is President Obama doing? He has urged all Americans to contact Democrat and Republican congressman and urge them to extend tax cuts and increase taxes on the wealthy. His hope is that with enough public pressure he can urge Republicans to accept his deal. He says getting people involved generally forces congressman to work.

Experts also fear that although the economy seems to be showing signs of improvement, uncertainty about taxes is likely to threaten consumer confidence. Obama and the Democrats won by a slight majority of votes, which means many Americans, who are Republicans, disagree with his policies. But its human nature to love the idea of someone else paying the bill, until we realize that somebody is us.

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Beth

Beth L. is a content writer for Better Bankruptcy. Good content and information is one of many methods we utilize to bring you the answers you need.