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Please begin with an informative title:

The outcome of this situation is important both for its impact in the real world and for its role as precedent. The fiscal cliff is explored below in substantial detail. I humbly offer its contents.


You must enter an Intro for your Diary Entry between 300 and 1150 characters long (that's approximately 50-175 words without any html or formatting markup).

How did we get here ?

Q. Why did the parties create such a fiscal and economic threat?

A. It was part intentional, part coincidental.

The intentional: Since Ronald Reagan’s administration, with mixed results, presidents and Congresses have occasionally mandated a self-imposed future crisis to force themselves to agree on unpopular tax and spending actions. In that spirit, the idea behind the August 2011 deal was that Republicans would so greatly fear the military cuts, and Democrats the domestic spending cuts, that they would negotiate a deficit-reduction alternative by the Jan. 1 deadline.

The coincidental: The measures from the 2011 deal are set to take effect at the same time as the changes to jobless benefits, the alternative minimum tax adjustment and the Medicare “doc fix,” and the expiration of the Bush tax cuts — a confluence that the two parties did not fully expect back in August 2011. The nation will also reach its debt ceiling in January, creating additional uncertainty. Accounting maneuvers by the Treasury Department could push that deadline to March, but Mr. Obama wants a debt-limit increase as part of any deal, adding another item to the agenda.

To appease the economic terrorists and convince them to agree to promise to pay the bills that these same economic terrorists and other House republicans, had run up, we agreed to certain automatic budget cuts if another agreement was not made. These cuts were in Medicare (payments not benefits) and Defense. Furthermore, the tax cuts signed into law in 2002 are set to expire at the end of this year. Taxes for nearly all Americans who pay federal income taxes will rise. This will hurt the middle class. They will have less money to spend. Consumer spending drives this economy; it accounts for two thirds of US economic activity. This might result in an economic contraction. Both parties agree that we should preserve the tax cuts for the middle class.

Most Americans make $250,000 or less - as is true of most small businesses

Today the President called on Congress to extend the middle class tax cuts for the 98 percent of Americans making less than $250,000 for another year. In fact, the President’s proposal extends tax cuts for 97 percent of all small business owners in America.  If Congress fails to act, a typical middle-class family of four will see its taxes go up by $2,200, and America’s small business owners would take a big hit. The President refuses to let that happen.

This should be one of those rare moments where everyone in Washington can agree. Independent experts, economists, and folks on both side of the aisle agree that we should extend tax cuts for middle class families. But so far, Congress hasn’t been able to extend middle class tax cuts because Republicans in Washington refuse to ask the wealthy and big corporations to pay their fair share. In fact, on every issue – from reducing the deficit in a balanced way to paying for investments in education – Republican insistence on cutting tax

Allowing the budget busting tax cuts for the wealthy to expire is popular, even among republicans.
Poll: Raise taxes on wealthy
A majority of Americans support hiking taxes on the wealthy to avoid steep budget cuts and tax increases dubbed the "fiscal cliff," a poll indicates.

Though less than the 60 percent majority overall that supports higher taxes on those making $250,000 or more, 40 percent of self-identified Republicans in the poll said they, too, support higher taxes on the wealthy. That figure could offer potential wiggle room for GOP lawmakers who have pledged not to raise taxes but will face heavy pressure to do so by President Barack Obama, who campaigned and won on the pledge to charge rich people more, ABC News said Wednesday.

In addition to a majority of Americans' belief on taxes, two-thirds of respondents opposed raising the Medicare eligibility age from 65 to 67 as part of a fiscal cliff deal, an ABC News/Washington Post poll found.

Moreover, everybody would retain the tax cuts for the first $250,000 that they earn.

So, what happens if no deal is reached ? Taxes go up on everybody and the automatic budget cuts go into effect. The wealthy can afford it, by definition. However, this could really hurt middle class Americans. It will also hurt the economy as a whole. We cannot afford to retain the marginal tax rates that only help the wealthy. They are not popular with the American electorate. Legislation that retains those tax cuts that are unique to the wealthy cannot pass the US Senate and would be vetoed by the U.S. President.

Tax cuts that exclusively benefit the wealthy are very expensive and do not help the US economy grow and produce jobs

Tax breaks for the super-rich might be great for the super-rich. They just don’t do much for the rest of us.

Extending the Bush-era tax cuts for the rich would would boost the economy by an almost negligible amount, according to a recent analysis from the left-leaning Economic Policy Institute -- far less for GDP growth than continuing stimulus measures. Letting the tax cuts expire wouldn't hurt job growth either, according to data from a University of California at Berkeley economist, cited by Mother Jones.The findings echo those of a similar Congressional Budget Office report last month, which found that the Bush-era tax cuts will cost the U.S. $1 trillion over the next decade.

Previously, President Obama appeased the teahaddists and other ideological zealots to protect the middle class from losing the payroll tax cut. However, President Obama has proven that he is willing to reach out to the other side in an attempt to find common ground. He has shown that he is willing to compromise. The republicans, especially in the US House of Representatives, have shown that they are extremists who will not compromise regardless of the national polls and the past election.

It is a sobering truth that while our prospects nationally and in the electoral college look promising, our prospects in the US House of Representatives do not. Why is this ? Our population growth is in the urban areas. Therefore, our numbers in the US House of Representatives are likely to be less strong than we are nationally as a party. This trend appears to continue for the foreseeable future. Furthermore, we are not as strong in the US Senate as our demographic numbers might imply. First, this is true due to the filibuster - which is why we need strong filibuster reform. Second, this is true because every state, regardless of population, has exactly two US Senators from that state. Third, campaigning in a state is expensive. Wealthy corporations and people heavily influence many Democratic Senators. Fourth, we still have a few conservadems (thankfully not as many as before) [example=Joe Manchin]. Therefore, we will (with decent candidates who run decent campaigns), win presidential elections, hold a slim majority in the US Senate, and yet confront a Republican US House of Representatives.

How is this relevant to the fiscal cliff ? Republicans control the US House of Representatives. Most of them are safe in their republican districts. Many of them are ideologically extreme. They do not worry if their party becomes unpopular nationally. They only care about being able to win reelection and maintaining their ideological purity. These same people are fact averse. Therefore, as a whole, they cannot be reasoned with. Therefore, the challenge to us is: How do we get reasonable legislation that addresses the fiscal cliff passed ?

It is my view that, as much as I do not want to see taxes go up on the middle class, no deal is better than a bad deal. Why ? First, we simply cannot afford these tax cuts that exclusively benefit the wealthy. Second, we cannot allow them to hold our economy hostage. We cannot continue the bad precedent we set. Third, the American people have spoken on this issue. President Obama won in a convincing way. He made no secret of the fact that he supports raising marginal tax rates on the wealthiest of Americans. Fourth, the American people support us in polling. Fifth, the American electorate will hold the republicans largely responsible if we go over the fiscal cliff.

The public is skeptical that President Obama and congressional Republicans will reach an agreement by the end of the year to avoid the fiscal cliff. About half (51%) say the two sides will not reach an agreement, while just 38% say they will. If no deal is reached, more say that congressional Republicans would be more to blame than President Obama (53% vs. 29%)
We recall that John Boehner does not speak for his caucus. He cannot negotiate for them. They have nobody that can negotiate any legislation that could pass the US Senate and not by vetoed by the President. The people that most represent their caucus simply will never, ever, under any circumstances agree to raising the marginal tax rates on people making more than $250,000 a year. Their caucus as a whole will not agree to that. Therefore, anybody representing their caucus has only authority to negotiate deals that are non starters with the White House and the US Senate. Consequently, there is nobody with whom we can negotiate. As a result, the President is exactly right when he is not going to make a counter offer to his own offer.

What would happen if President Obama made another offer ? The American people would lose. What would he get out of doing such a thing ? Nothing. There is no motivation, therefore, for him to make another offer. There is nobody with whom he can negotiate and get a deal done. Cuts to earned benefits are radically unpopular. Republicans have had a war on earned benefits since they began. Even in safe republican districts, Republicans in the US House would not want to own that position. There is no reason in the world that any rational Democrat would begin negotiations by putting that on the table in their offer. If Republicans want to take this unpopular position, let them do so: say it loud and say it proud. Or let them shut up. Put up or shut up. Fish or cut bait. All of this is just crushing the Republican national brand.

Your move

Dems Laugh Off GOP Demand That They Make First Move On Medicare Benefit Cuts

Faced with the reality that taxes are going up, either automatically or with their tacit assent, Republicans are hoping that they can bank an ideologically suitable down-payment on a broader deficit reduction package in the form of cuts to Medicare spending.

The problem is, unlike the Democrats’ calls for higher taxes on rich Americans, the GOP’s preferred Medicare cuts are deeply unpopular. So they’re trying to cow Democrats into proposing these cuts first — to effectively author both sides of the proposal — and provide them political cover.

“We’ve come down with ours. We’re still waiting for theirs. That’s the status of the negotiations,” said Sen. Chuck Schumer (D-NY) in the Capitol Thursday, laughing off the GOP’s demand.

Boehner must pick his poison
BOEHNER: It’s been very clear over the last year and a half. I’ve talked to the President about many of them. You can look at our budget, where we outlined very specific proposals, where we passed in last year’s budget and the budget from the year before. We know what the menu is, what we don’t know is what the White house is willing to do to get serious about solving our debt crisis.
Q: So your 2011 position still stands, then? I mean, are you still offering, those talks from 2011, is that still the basis here?
BOEHNER: Listen, I’m not going to get into the details, but it’s very clear what kind of spending cuts need to occur, but we have no idea what the White House is willing to do.
Recent polling shows that even Republican voters oppose Medicare cuts. Americans rejected the Republican Medicare plan during the 2012 election, when losing vice presidential candidate Paul Ryan insisted that the GOP could win the debate about specific changes to the program
The specific proposals must refer to the nonserious Ryan plan offered by the unserious zealot Lyin Ryan.  In itself, this points out the pickle that they face - it indicates that they realize to some extent they have a problem. They did not run on Ryan's plan per se. Willard tried to distance himself from that plan as best he could. However, he needed to cave to the far right who viewed him with suspicion due to his membership in the invertebrate class. Nevertheless, by picking Ryan, Willard and the far right aligned themselves with what Ryan was most known for: his budget "plan". And they lost. badly.

So, if those are the details that he is referring to, they were tried and found wanting. So, try again.

If not, then tell the American people what you want to do to their Medicare and Social Security benefits. Own it. Go shout it on the mountain top - if you think this is such a great idea. And instantly become a pariah and one of the most hated people in America.
You are the one who wants to cut Medicare and Social Security, Mr. Boehner. We don't. So, we won't propose anything to do it. If you want that, you have to propose it. You have to take ownership of it. The fact that you are afraid to do so tells us that you know you have a giant problem with a large, large portion of the American electorate - perhaps 75%. Your party is circling the drain, but guess who goes down first ? You do.

Republican continue to live in fantasy land

On "Fox News Sunday," Rep. Tom Price (R-Ga.), chair of the Republican Policy Committee, which represents some of the more conservative House Republicans, said that he will accept some revenue increases as part of a compromise, but he would not agree to increases in the tax rates.
"As long as you close the loopholes, you limit the deductions, limit the credits, you can lower the rates and broaden the base, that's formula for a solution. And it's a real solution," Price said.
On ABC's "This Week," though, Sen. Chuck Schumer (D-N.Y.) said that tax rates would have to be increased to get enough revenue for a $4 trillion deficit reduction package. Arguing that it is "mathematically impossible," Schumer said there is not enough revenue that could be raised by eliminating deductions and credits while also cutting rates such that middle-class families would not have to pay more.

Read more at http://www.christianpost.com/...

So, what is likely to result from this :

Either no deal .


In response, House Minority Leader Nancy Pelosi (D-CA) announced Friday that Democrats plan to bring the legislation to a floor vote next week no matter what. The Democrats plan to use a discharge petition, which can force a bill to the floor if it has been stuck in committee for 30 legislative days. In a new statement, Pelosi dared her Republican colleagues to reject the plan to extend tax cuts for 98 percent of the country:

And so, to that end, we are – we will be introducing, if the bill, if there is no announcement of scheduling of the middle income tax cut, which, by the way, has tremendous support in the Republican Caucus – I think we would get a 100 percent vote on it if it came to the floor. If it is not scheduled, then on Tuesday we will be introducing a discharge petition which you know with – if we get 218 signatures, would bring the bill automatically to the floor. That would mean that we need some Republicans who support middle income tax cuts, to sign on with us.

Your move, Mr. Boehner.

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