Make way for messy budget talks
Tax rates for the wealthy move into focus as congressional leaders meet next week to tackle the fiscal cliff.
We don't exactly know yet. But both sides are dancing, dropping hints about their strategy. The real work will get started next week, when President Obama is set to begin talks with Senate Majority Leader Harry Reid and House Speaker John Boehner.
The most immediate issue on the table? Whether to raise taxes on the wealthiest Americans, either by hiking the 35% top-tier rate or finding another way, such as closing some tax loopholes.
The dealmaking is going to be messy, no doubt, and most of it will probably be kept out of the spotlight. Obama and Boehner have already agreed to speak carefully in public in order to leave plenty of room for private negotiations, CNN reports. But something must happen, because no deal means that come January, Bush-era tax cuts will expire and massive spending cuts will also kick in.
Lawmakers don't have much time to figure out how to resolve the so-called fiscal cliff. And that's why Obama and Boehner staked out some starting positions Friday, but also pledged to work together to find common ground.
For Obama, that meant insisting on tax hikes for the wealthy, defined as families making $250,000 or more. "We have to combine spending cuts with revenue, and that means asking the wealthiest Americans to pay a little more in taxes," he said Friday at the White House.
He stressed that the results of Tuesday's election mean he has somewhat of a green light from the American people. "Tuesday night, we found out that the majority of Americans agreed with my approach," he said.
But Boehner argued that raising taxes on the wealthiest Americans will hurt, because more than half of them own small businesses. "Raising tax rates will slow down our ability to create the jobs that everyone says they want," he said.
So are we in for more fruitless head-butting and pointless histrionics? Maybe not. The New York Times sees three reasons that good compromise might actually be reached:
- Some retiring lawmakers and recently defeated Republicans may be more willing to reach a deal, since they're headed out of office anyway.
- After getting thumped in this week's elections, Republicans may be open to compromise.
- Democrats sense a window of opportunity on immigration, and want to close this economic issue quickly to move to that hot potato.
That was encouraging to some Republicans. "I think he did extend the olive branch, if you will," said Rep. Scott Garrett (R-N.J.), on CNBC Friday.
Boehner struck a conciliatory tone as well. "I don't want to box myself in," he said. "I don't want to box anybody else in. I think it's important for us to come to an agreement with the president. But this is his opportunity to lead."
Kent Conrad, a retiring Democratic senator from North Dakota, said on Bloomberg Television Friday that he could see a basic budget framework laid out over the rest of the year in Congress' lame-duck session.
"I'm absolutely confident that working together, we could put together a platform, a strategy, a plan, during this lame duck," he said. "I really am quite optimistic."
More on Top Stocks
- Macro fears grab stock market spotlight
- Play the selloff with Whole Foods
- Netflix's secret strength? Prime-time viewing
Politicians - They fight and we go over a fiscal cliff.
They reach agreement we get higher taxes, which creates more unemployment, and entitlement cuts gets the unwashed out in the streets smashing windows.
Time to pack the parachute either way. Gravity sucks.
A heck of a note--our new POTUS really isn't NEW, is he? He's the same old, same old---punish the successful....reduce initiative,.....toss more crumbs (welfare) and tax, tax, tax!
Maybe the house of cards should go ahead & fall! We'll all be going down anyway at some
point under this lying---manipulative--weak leader----his way or the highway---let him stew and fail on his own!
Does anyone even care? NOPE! You can bet not the 14.8m union workers, the 46+ milion on food stamps ...or the in-tank media who abandoned "journalistic reporting"....all of whom got hm re-elected & won't care a bit if America goes belly up under Dear ol' Barry!
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
Breaking up big banks is an untested solution to the too big to fail problem that attempts to isolate and dismantle large, troubled institutions while protecting the rest of the economy.
VIDEO ON MSN MONEY
[BRIEFING.COM] The stock market punctuated July with a broad-based retreat that sent the S&P 500 lower by 2.0% with all ten sectors ending in the red. The benchmark index posted a monthly decline of 1.5%, while the Russell 2000 (-2.3%) underperformed to end the month lower by 6.1%.
To get a better feel for what led to today's retreat, we'd like to look back to Wednesday, when the market had ample reason to rally, but did not. Instead, it ended basically flat after a sloppy day of ... More
More Market News
|There’s a problem getting this information right now. Please try again later.|
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'