In Fiscal Cliff remarks Monday afternoon, the President noted that an agreement was in hand on the level at which the Bush tax cuts would expire, but a comprehensive plan to address all issues involved was not possible "with this Congress at this time."
As late as seven o'clock Monday evening, disagreements remained over much of the deficit reduction portions of the package and which parts would be dealt with in any approved plan. There does seem to be agreement that raising the spending limit will occur after all this excitement is over. By 10:00 pm, Senate officials were "backgrounding" that a deal had been reached. However, they refused to discuss details, on the grounds that they were not authorized. A Senate vote may occur before midnight.
Republicans have been insisting that they will demand deep spending cuts before they agree to another debt limit increase, and they don't want to hear any more about increased revenue. The President had some remarks to make about that. In effect, he drew his line in the sand today and laid detonation cord in it. As part of today's remarks, President Obama said, "Now, if Republicans think that I will finish the job of deficit reduction through spending cuts alone Â— and you hear that sometimes coming from them ... then they've got another think coming. ... That's not how it's going to work at least as long as I'm president.
And I'm going to be president for the next four years, I think," he added.
America may be looking at another rapidly approaching fiscal cliff within a couple of months of the next Congress's swearing in.
As of this writing, negotiators had agreed to: allow the Bush tax cuts to expire on earnings of $450,000 and above for families, and $400,000 for individuals, an increase from 15% to 20% on dividends and capital gains, starting at the same income levels, a five percentage point increase (from 35% to 40%) in inheritance taxes, with a $5 million deductible, and a couple of small housekeeping issues like the Alternative Minimum Tax and some breaks for poor families earning sub poverty incomes. They have now apparently agreed to some method of controlling the cuts that threaten to stall work at virtually every department of government, as personnel are furloughed during the next several weeks if the cuts are not controlled, but, because they are not "authorized to discuss details," Senate officials are saying nothing about these issues. The reality is... not all cuts will be "controlled." Some may be even more draconian than the sequestration bill proposed, because significant reductions in expenditures are still going to have to occur.
And let no one forget, there are ideologues in both parties who will willingly sink America's economic ship, shove her back into a recession, over a point of political philosophy. There are those who view their political vision as being more important than the continuation of a recovery that has been carrying America forward for the last two years. They would rather see unemployment at 9 percent or higher than accede to an opponent's point of view for the moment. The Republicans have done it before, and there are Democrats who have threatened to do it this round by filibuster. Self-righteousness is a terrible disease. Because of it, this whole negotiation could blow up at the point of the vote, after everyone believes disaster has been averted.