I have suggested in recent weeks that President Obama is willing to go over the fiscal cliff come January 2. It now appears that House Speaker Boehner is ready as well. But while the negotiations have been very shrill this week, there has been some movement on both sides.
The week began with Boehner offering his so-called “Plan B” which would raise income taxes only on those making over $1 million per year, and leaving the Bush tax cuts in place for everyone making $1 million or less.
In addition, Plan B would delay any discussion of the fiscal cliff’s across-the-board spending cuts until next year, at which time Republicans would likely use the looming debt ceiling battle as leverage to force entitlement reforms and minimize cuts to defense. That could risk a default on the debt just as it did in the 2011 fiasco.
As has been commonplace recently, President Obama flatly and immediately rejected Boehner’s Plan B. But yesterday the president blinked, a little. The White House said it might be willing to keep the Bush tax rates in place for all but those families earning over $400,000 a year, up from his previous demands of $250,000.
He also blinked a little on spending cuts, mainly by increasing his spending cut total to $930 billion over 10 years, from $600 billion originally. That compares to $1.2 trillion in cuts over the same period demanded by Republicans. Of course, none of this is in writing.
Obama reportedly made one other concession this week that you may not have heard about. A large chunk of the president’s new tax revenues and spending cuts, $225 billion over 10 years, comes from embracing a Republican-backed idea to apply a new measure of inflation to the budget and tax code. Called the “chained” Consumer Price Index, the new gauge would slow the growth of Social Security cost-of-living increases over time
While it remains to be seen if a deal can be made, at least on the tax increases, and while both sides escalated their rhetoric yesterday, there appears to have been some progress that has received little attention in the media. So while I still believe that both sides are willing to go over the fiscal cliff, the odds of doing so may have decreased at least a little this week.
The problem is still one of time. Republicans are scheduled to vote on Plan B later today, which Obama says he will veto. Congress is still scheduled to recess for the Christmas holiday today and tomorrow. It remains to be seen if some kind of deal can be reached before the end of the year. At this point, I wouldn’t bet for or against it.
So Does The World End Tomorrow?
For months now, fears that the world will come to an end on December 21, 2012 have escalated. Many believe that the “Mayan calendar” predicted the end of the world on this date at least 1,300 years ago. But did it really? And even if it did, does that really mean anything?
I have read a good bit on this subject, ranging from scientific analysis to wild speculation. Thanks to the Internet, this story is concerning people around the world. The best overall analysis, and the most understanding article I have read, was a Huffington Post piece (yes, the Huff Post) by Joshua Berman. You can read it here.
For the record, I fully expect to be around after tomorrow. If not, and the world comes to an end, I wish you well in the afterlife! NASA has a very interesting video on 12-21-12:
http://www.space.com/18890-world-will-not-end-on-12-21-12-really-nasa-says-video.html
Merry Christmas, Happy Hanukkah & Holiday Best Wishes
Christmas is a very special time around the Halbert House. Our two kids are already home from college and will be here for three weeks. Lots of family coming in as usual, starting this weekend. Lots of cooking, lots of food and lots of special memories to be sure.
I hope that your Christmas, or whatever holiday you are celebrating, is one of the best ever!
* Since Christmas is on Tuesday, I will not be sending my regular E-Letter on that day.
Have a great weekend everyone!
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