If we can survive the Mayan apocalypse tomorrow, December 21st, I’ll feel pretty good about our chances of surviving the looming fiscal cliff 11 days later. Until then, it doesn’t look too promising that Congress will be able to hash out a bill for President Obama to sign by year-end.
Until yesterday, the talks had been geared towards coming up with a balanced approach on which both parties could come to an agreement. The Democrat’s priority has been a hike in tax rates on higher earning individuals while Republicans are trying to scale back on government spending, primarily on entitlements.
Unable to agree on much of anything, House Speaker John Boehner went out on a limb Tuesday and called for a tax rate hike on incomes above $1 million and to look at the spending section of the balanced approach at a later time. Even more surprising, this was exactly what House Minority Leader Nancy Pelosi had suggested be done back in May. However, Democratic leadership immediately rejected this proposal because the income level was too high. What appeared to be the one item both parties could actually agree on, turned out to be yet another sticking point.
With January 1st inching closer each day, it is becoming more difficult to think the fiscal cliff will be averted by year-end. Some have argued the fiscal cliff isn’t that big of a deal while others have said it could lead to a double-dip recession. Either way, if the Mayans turn out to be right and the world ends on December 21st, then this whole fiscal cliff deal is a moot point.