WASHINGTON – President Obama flew back into the nation’s capital today reportedly with a new offer to avoid the so-called fiscal cliff on Jan. 1. While the Senate is here, the GOP-controlled House has not returned from Christmas vacation and the GOP leadership in the Senate, in defiance of the facts, is claiming that Democrats have not yet offered anything that can keep the country from falling off the cliff.
Democrats counter that they have already passed in the Senate a bill that would extend the tax cuts for those making $250,000 or less, the bottom 98 percent of the nation.
Senate Majority Leader Harry Reid, D-Nev., predicted this morning that the nation could go over the cliff because there may not be enough time to avoid the combination of devastating spending cuts and tax hikes on working people set to take effect on Jan. 1. Reid declared that the only “viable” solution was for the GOP-controlled House to approve the Senate bill that would preserve existing tax rates on income under $250,000. “Everyone knows that if they had brought up the Senate-passed bill, it would pass overwhelmingly. But the Speaker says, no we can’t do that,” declared Reid. “It’s the House being operated by a dictatorship of the Speaker.”
Adding to the crisis is the ignoring by GOP leadership in the Senate of the president’s efforts to compromise and the bill Democrats in the Senate have already passed.
“The leader is happy to review what the president has in mind, but to date the Senate Democrat (sic) majority has not put forward a plan,” said a spokesman for Republican Senate Minority Leader Mitch McConnell.
Reid countered: “If we go over the cliff, and it look like that’s where we are headed, Mr. President – the House of Representatives as we speak with four days left after today before the first of the year aren’t here with the speaker telling them he’ll give them 48 hours notice. I can’t imagine they’re out there wherever they are around the country, I can’t imagine their consciences and we’re here trying to get something done.”
The political storm inside the Capitol seemed to be reflected in the dark black clouds gathering in the sky above Washington as a winter storm approaches.
Workers across the country are saying that the massive budget cuts slated for Jan. 1 will make life far more difficult for them, especially for the millions of unemployed and poor who have already fallen off the fiscal cliff.
“People will start to feel it quickly in their paychecks,” said Ian Shepherdson, an economist at Pantheon Macroeconomics Advisers.
Households will see their paychecks get smaller when a two-year payroll tax holiday expires Dec. 31. The new rate will slash 2 percent of every dollar of wage income or about $20 per week for someone making $50,000 a year.
As for unemployment, although hiring picked up a bit recently, the pace is far slower than normally seen in any previous economic “recovery.” Since 2007 the number of part-time workers who can’t get full-time work has been stuck at twice the level seen when the recession began.
Photo: Kay Gaensler // CC 2.0