Congress engages in political brinksmanship on making a deal as the fiscal cliff looms within hours of the New Year
On the eve of the New Year, America braces itself for the possibility that taxes will increase overnight and unemployment insurance will stop for nearly two million Americans and their families.
Will the Stock Markets react negatively today as the country watches and waits for a Congressional deal to prevent going over the "fiscal cliff"?
Even this reporter cannot disagree with Senator Joe Manchin (D-WV) who said, speaking from the Senate floor that "something has gone terribly wrong when the biggest threat to the American economy at is the United States Congress."
Vice-President Joseph Biden was on the telephone with Senate Minority Leader Mitch McDonnell Â in discssions until midnight last night and their respective staffs talked late into the night.
The main issues of the impasse revolve around how to use the possible increase of revenue, generated by higher taxes on those who earn $250,000 or more. Â Democrats want to use additional revenue to maintain Â or freeze spending for discretionary programs including unemployment, food stamps, student loans etc. But Republicans want to use increased revenue to pay down the U.S. debt and make cuts to discretionary spending now.
Earlier on Saturday evening, Senate Majority Leader Harry Reid announced from the Senate floor that negotiations were at an impasse and that the Democratic and Republicans caucuses remained far apart. Â Reid asked that the Senate adjourn and resume business at 11 a.m. today.
Reid said negotiations would continue, but are not currently ongoing within between members of the Senate.
Senate Minority Leader Mitch McConnell's staff reached out to Vice-President Joe Biden when ReidÂ announced Saturday he was removing the Social Security inflation calculation cuts from the negotiations.
One of the biggest concerns by Democrats about Â the failure to make a deal before Jan.1, is the immediate cessation of unemployment benefits currently sustaining about two million unemployed Americans. Â Senators Diane Feinstein (D-CA) and Bernie Sanders (I-VT) have expressed grave concerns about the termination of these benefits that are keeping people afloat and expressed their further concerns about a potential blow to consumer confidence, just as the economy has stabilized and continues to grow, up from 1.3 percent in the second quarter, to 3.1 percent GDP growth in the 3rd quarter.Â
On Sunday, President Barack Obama made a rare appearance on NBC's Meet the Press to discuss the Congressional fiscal cliff negotiations. Â He continues to insist that all Americans earning up to $250,000 should Â get a tax cut and everyone else, should pay more. Â Republicans apparently were very unhappy with President Obama's tone during the Meet the Press interview, who laid blame for Congressional obstruction at House Speaker John Boehner and McConnell for failure to compromise.
Speaker John Boehner has been sidelined to these negotiations for failure to gain support from the Republican caucus for any measure proposed to date. Â Congressional watchers believe that Boehner's speakership would be irreparably damaged if he were to allow a vote on a bill that would be carried by a majority of Democratic votes.
The "fiscal cliff" refers to the 2011 Budget Control Act that includedÂ $500 billion in tax increases and across-the-board spending cuts scheduled to take effect after Jan.1, 2013.
Most economic experts believe that the US economy will not take an immediate hit from a failure to pass a deal by January 1st, but could damage consumer confidence in the short-term. Other believe, on both sides of the aisle, that "going over the fiscal cliff" is not a bad tactic, could achieve a better deal for Democrats and will drive swift action to "cut taxes" by Republicans after the new Congress is formed on Jan. 3rd.
Image of the U.S. one dollar bill is courtesy of Freepik
Tanya L. DomiÂ is the Deputy Editor of the New Civil Rights MovementÂ blog. Â She is also an Adjunct Assistant Professor of International and Public Affairs atÂ Columbia UniversityÂ and teaches human rights in East Central Europe andÂ former Yugoslavia.Â Â Prior to teaching at Columbia, Domi was a nationally recognized LGBT civil rights activist who worked for the National Gay and Lesbian Task Force during the campaign to lift the military ban in the early 1990s. Domi has also worked internationally in a dozen countries on issues related to democratic transitional development, including political and media development, human rights and gender issues. Â She is chair of the board of directors for GetEQUAL. Â Domi is currently writing a book about the emerging LGBT human rights movement in the Western Balkans.