Fiscal Cliff Deadline May Come Sooner Than Expected

Monday, 10 Dec 2012 01:23 PM

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While the tax increases and spending cuts of the fiscal cliff don’t kick in until Jan. 1, if Congress wants to do something to stop the country from going over the cliff they’ll need to make a deal and get it passed much sooner than that.

Congress will recess for the holidays on Dec. 21, so President Barack Obama and Speaker of the House John Boehner have until Dec. 15 to reach a deal, so that legislation can be written and printed with enough time for it to be read and voted on before the break, reported NBC News.

On Jan. 1, the Bush-era tax cuts are set to automatically expire for all income levels and about $110 billion in cuts to the Pentagon budget will begin to be phased in unless Congress passes legislation to override them.

Alert: Will Raising Taxes Help or Hurt America? Vote Here!

Congress has made a habit during the last few years of waiting until the last possible second to make deals when faced with the threat of extreme calamity. Debates and resulting legislation on tax cut extensions, the debt ceiling debate, and the payroll tax holiday are clear examples of this since 2010.

"The Congress doesn't work on the clock; it works on the calendar," Republican Sen. Roy Blunt of Missouri told Reuters. "There is just that required moment when something has to happen because you've run out of time. [In the meantime] there is a desire to maximize your negotiating position until you realize you don't have any room any more to negotiate. It almost invariably works that way."

Obama and Boehner met Sunday at the White House in a private meeting that both agreed not to discuss. The meeting comes days after reports that the two leaders had failed to discuss the cliff last week or speak at all to one another at the White House Christmas party they both attended on Oct. 5.

The money-saving and revenue-generating provisions were put in place by Congress with approval of the Budget Control Act of 2011. The act provided for a super-committee to find areas of the budget that could be slashed with Congressional approval or risk having the automatic cuts kick in.

After much discussion of the fiscal cliff in the presidential and congressional races, Congress did not start working on a solution until Obama was re-elected.

Negotiations have stalled on Democratic demands that taxes be increased back to Clinton-era levels for the top 2 percent of earners, while Republicans would prefer to reduce spending and keep tax rates unchanged.

Alert: Will Raising Taxes Help or Hurt America? Vote Here!

In the last week or two, however, some Republicans have walked back their position that nobody’s taxes should go up.

"There is a growing group of folks looking at this and realizing that we don't have a lot of cards as it relates to the tax issue before year end," Sen. Bob Corker, R-Tenn., said on "Fox News Sunday."

If Republicans decide to go with Democratic efforts to raise taxes, Corker added, "the focus then shifts to entitlements and maybe it puts us in a place where we actually can do something that really saves the nation."

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