There will be a deal on the "fiscal cliff" before the mirror ball falls in New York City on December 31. House and Senate Republican leaders know that the president has them beat on this one. It is time for grace in defeat.
Secretary of the Treasury Timothy Geithner made certain of that by announcing the U.S. will reach its debt limit of $16.4 trillion on December 31 and not “early in 2013” as previously forecast. You want to light a fire under Congress? Tell them the US Treasury will not be able to borrow money to fund those Social Security checks!
But the secretary – who apparently is a far better poker player than the president – softened the warning by saying that he could manage for a couple of months – especially if there was more money flowing into the Treasury from higher rates of withholding on wealthy Americans.
The “grand bargain is dead” in Congress. But there is unanimous support for preserving the Bush tax rates for everyone making less than $200,000-$250,000 in a year.
I am willing to go out on a limb and predict Congress will protect all the tax rates of those making less than $450,000-$500,000. Calculated out, the actual difference between allowing the Bush tax rates to expire at $250,000 or $500,000 is an increase of only $515 on an income of $500,000!
Still, Senate Minority Leader Mitch McConnell (R-Ky.) must be able to claim he wrung a compromise from the Senate Democrats so that he can deliver the 15 or so Republican Senate votes needed to pass a bill out of the Senate.
Once the House receives the legislation, the bill will pass with most Democrats voting yes and, perhaps, half – on the high side, 60% – of Republicans.
The president can then sign the bill and wing back to Hawaii in time to get in one more round of golf before toasting the New Year.
This “signing ceremony”/photo-op will only cost the taxpayers an extra $5.8 million over the $4.7 million already budgeted for the presidential vacation.
Just proving that it really is about the spending not the taxing!!