Debate Over the Fiscal Cliff Continues

Posted on: November 30th, 2012 by NADO Admin

As lawmakers returned this week from the Thanksgiving holiday, the debate on how to avoid the fiscal cliff resumes. Democratic leaders in Congress are pushing for a deficit reduction package that would raise taxes on top income earners, but resisting major spending cuts or changes to entitlement programs such as Social Security, Medicaid, and Medicare as part of a lame-duck deal to avoid the fiscal cliff.

Republican leaders in Congress have agreed to put possible tax increases on the table, but have argued that a balanced approach to deficit reduction means real spending cuts now, which would include cuts to entitlement programs. On November 29, House Republican leaders rejected a deficit reduction plan crafted by the White House. The plan included $1.6 trillion in additional tax revenue over 10 years by allowing an increase in upper-bracket income tax rates. Additionally, it would have postponed for a year the automatic cuts in discretionary spending programs scheduled to begin in 2013 and extend unemployment benefits. Republicans rejected the White House plan because of an included provision to create a new mechanism that would increase the U.S. Government’s borrowing limit without congressional approval.

Both sides are still debating positions on a wide range of issues. As of Friday, there are no immediate plans for a second meeting between congressional leaders and President Obama to address the fiscal cliff. Click here to learn more about the fiscal cliff and its possible implications.

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