Cliff Dive: A Stalemate and a Scrooge Christmas
Washington took a step closer to the dreaded "fiscal cliff" today with campaign-style sniping replacing negotiations and the speaker of the House declaring talks have reached "a stalemate."
"There's a stalemate," Speaker of the House John Boehner told reporters. "Let's not kid ourselves."
Added Boehner, R-Ohio: "Right now, we are almost nowhere."
The public posturing matches what is going on behind the scenes. Talks appear to have reached a standstill - deadlocked on the big three issues: taxes, entitlement spending and the debt ceiling.
A key senator told ABC News chances were "slim" that an agreement would be reached before the so-called fiscal cliff results in across-the-board tax hikes on Jan. 1.
"That's sort of like the lump of coal you get for Christmas," President Obama said at a campaign-style visit to a toy manufacturing facility in Hatfield, Pa. "That's a scrooge Christmas."
With talks stalled, the president's focus has moved, for the moment at least, from negotiating a deal to trying to build public pressure to force Republicans to go along with his position on the expiring Bush tax cuts - passing a Senate bill that would keep rates lower on those making less than $200,000 a year while allowing them to go up on higher-income taxpayers.
"If we can just get a few House Republicans on board, we can pass the bill in the House, it will land on my desk and I am ready," President Obama said. "I've got a bunch of pens ready to sign this bill. I'm ready - ready to sign it."
But the expiring Bush tax cuts are only one aspect of the so-called fiscal cliff. Without a deal by Jan. 1, there will also be severe cuts to the defense budget and payments to Medicare doctors, an across-the-board increase in payroll taxes, an expiration of unemployment benefits for millions and other tax measures with widespread economic implications.
On top of that: the government will reach the limit on its authority to borrow money shortly after the new year, potentially putting the America's credit, once again, at risk.
With Republican leaders publicly saying they are unwilling to accept an increase of tax rates on the wealthy, the White House has sent a proposal to Capitol Hill that Republicans say is a non-starter. The proposal includes:
- $1.6 trillion in tax increases
- $50 billion in new stimulus spending
- $400 billion in unspecified Medicare cuts over 10 years
- A virtually unlimited ability for the government to borrow money
"I've been very guarded in what I had to say because I don't want to make it harder for me or the president or members of both parties to find common ground," Boehner told reporters. "But when I came out the day after the election and made it clear that Republicans will put revenue on the table, I took a great risk. And then the White House spends three weeks trying to develop a proposal, and they send one up here that calls for $1.6 trillion in new taxes, calls for a little - not even $400 billion in cuts - they want to have this extra spending that is actually greater than the amount they're willing to cut. I mean, it's not a serious proposal."