Conflicting signals from ‘fiscal cliff’ negotiations


The negotiations between the Obama administration and House Republicans on how best to avoid what has been dubbed the ‘fiscal cliff’ is making slow progress, too slow, say many analysts. The House Speaker “has a tough job,” says Representative Peter Welch, a House Democrat from Vermont. “He knows Obama won the election, and on the question of taxes going up on the wealthy, that’s going to happen. But he has in his conference members who ran and won on the platform of lowering taxes for the wealthy, certainly not raising them, so this is a big challenge for any political leader.”

White House congressional liaison Rob Nabors has made the statement that the White House will not budge on the matter of raising taxes for the top 2% of the wealthiest in America. However; sources have indicated Nabors also said Obama is not completely resistant to compromise on every detail of his plan. There is apparently a lot of behind-the-scenes dialogue going on as well, as Michael Steel, a spokesman for Boehner, said, “We do not discuss private conversations.”

House Republican leadership has privately discussed, but reportedly mostly dismissed, the idea of passing two tax bills: one to extend all rates, even for families making above $250,000 annually; and a second to extend just middle-class income rates, along with a patch to the Medicare reimbursement rate and alternative minimum tax, thereby including cuts to entitlement benefits in the same bill that would extend tax cuts. Both would supposedly pass the House but only the bill extending cuts for the bottom 98% would make it through the Senate.


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