Just the sound of it - going off the cliff - echoes disaster. But that is where we're heading if Congress doesn't act to extend the Bush tax cuts or avoid the automatic spending cuts that will go into effect Jan. 1.
Little can be expected to be resolved over the next month as Congress takes off for its annual five-week August recess.
However, House Speaker John Boehner (R-Ohio) vowed Wednesday to call the House back into session to cement approval if Senate takes action to prevent fiscal cliff. The GOP has made its commitment to averting the fiscal cliff crystal clear and is encouraging the Democrats to work out some kind of agreement.
"If the Senate follows the House in passing legislation to stop the entire tax hike-including the small business tax hike-in a manner that requires House approval before it can be sent to the president, it is our commitment that the House will reconvene immediately to ensure the measure is enacted at the earliest opportunity. But, in order to avert the threat to our economy, the Senate must join the House in acting to stop the entire tax increase," Boehner and three other House GOP leaders wrote in a letter to Senate Majority Leader Harry Reid (D-NV).
Will Congress Stick Around for This?In the letter, Boehner and the House Republican leadership noted that the House will have taken action by the end of the week to replace the defense cuts (known as sequestration) and to extend fully the Bush tax cuts.
The Senate last week passed legislation extending the tax rates only for families with incomes up to $250,000, but Republicans say that's not enough.
Boehner and his team cautioned Reid that delaying the defense cuts for a few months to simply buy some time won't cut it.
"A Senate vote to simply postpone the sequester, rather than replace it with common-sense cuts and reforms, is unworkable and unacceptable," the GOP letter warns.
But the letter probably won't have much impact.
The Obama administration is adamant they will not extend the lower tax rates for wealthy Americans, and have stipulated that Republicans must agree to revenue increases in any deal to replace the scheduled defense cuts, which both sides agree could hurt the military.
The message the Republican Party is sending to the Democrats is: The next move is yours.
Boehner maintains the letter's meaning is simple: "Translation: We're putting this right at your doorstep. You own it. If Harry Reid, Nancy Pelosi and Barack Obama want to own a small-business tax hike and a devastating cut to a national defense, they are now set up perfectly to do so."
The Dangers of Fiscal Ciff 2013Going off the fiscal cliff certainly means a hard landing is in store for America.
Economists say that failure to take action will certainly thrust the U.S. into a recession. Forecasts are for gross domestic product to contract to 1.3% and unemployment to rise above 9% under the scenario.
In the meantime, as Democrats and Republicans continue to quibble over what moves to take, business owners, employers, taxpayers and investors have put major decisions on hold until they know what to expect.
GOP presidential hopeful Mitt Romney has called upon President Obama to step up in dealing with the looming cuts.
President Obama, meanwhile, has chastised Republicans and told them to "stop playing politics" with the U.S. military, since defense spending is one of the huge cuts on the table. President Obama maintains "there is no reason" the two parties cannot come together on a "balanced approach" to deficit reduction, tax policy and military spending.
However, the parties could not be farther apart.
Democratic Senator Patty Murray echoed in late July that "if we can't get a good deal, a balanced deal that call on the wealthy to pay their fair shares, then I will absolutely continue this debate into 2013 rather than lock in a deal this year that throws middle class families under the bus."
And the fiscal cliff standoff continues...
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