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Fiscal Cliff Update: Second Round of Proposals

by Newsteam Staff
December 12, 2012

Community organizations and labour groups hold a demonstration for their views in handling of the 'Fiscal Cliff' December 10, 2012. (Joe Skipper/Courtesy Reuters) Community organizations and labour groups hold a demonstration for their views in handling of the 'Fiscal Cliff' December 10, 2012. (Joe Skipper/Courtesy Reuters)

President Obama made a new fiscal cliff proposal (CBSNews) on Monday and Republicans made another counteroffer on Tuesday. Specifics of the proposals have not been released other than that Obama’s offer calls for $1.4 trillion in new revenue, down from $1.6 trillion. Meanwhile, House Speaker John Boehner continued to press him to identify specific spending cuts.

Boehner made a speech on the House floor Tuesday, where he criticized Obama’s proposal, saying, “We’re still waiting for the White House to identify what spending cuts the president is willing to make as part of the ‘balanced approach’ that he promised the American people.” Boehner also repeated his assertion that “if the president doesn’t agree with our approach, he’s got an obligation to put forward a plan that can pass both chambers of the Congress.”

In remarks Wednesday morning, Boehner again criticized Obama’s plan, saying it relies too heavily on tax rate increases (WSJ).

Meanwhile, the White House disputed Boehner’s accusations, countering that “the Obama administration has detailed spending cuts that have been public for the last year” (WSJ). On the official White House blog, Jason Furman and Heather Higginbottom detail areas where the president has already made or proposed spending cuts:

President Obama signed into law $1 trillion in cuts to discretionary spending over the next ten years. As part of the 2011 debt agreement the President cut $1,028 billion in discretionary spending through the Budget Control Act. Together with another $676 billion in discretionary savings through annual appropriations bills and interest savings, this will reduce spending by over $2 trillion. As a result, annual discretionary spending is projected to fall to its lowest levels on record, measured as a share of the economy.

At Politico, Jake Sherman and John Bresnahan write that while the arguing in Washington has been over which side is offering more specifics in their plan, “the reality is the two sides are swapping proposals that do little but reaffirm the positions they’ve long held. And despite hopes for progress, the two sides seem to be diverging further, according to people involved in and familiar with the talks.”

CFR’s Robert Kahn examines what “success” in resolving the fiscal cliff really looks like:

What constitutes success in these negotiations?  Is it simply that it gets us past December 31stwith less disruption than going fully off the cliff?  That it deals with the debt limit and thereby resolves uncertainty for 2013? Or is it whether it makes a material step towards a sounder long-term fiscal position, the most important challenge that we face?

–Contributing Editor Kirsti Itameri

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