Some House Republicans are out to destroy the country’s economy. I can’t think of what else it could be. The stock market finally is giving up the ghost, despite a valiant effort to stay afloat until the end of the year. Yesterday stocks went into a tail spin. The outlook for today isn’t much better.
Wall Street is finally waking up to the troubling prospect that lawmakers may not reach a deal to avert the “fiscal cliff” before the new year, with stocks swinging dramatically Thursday in response to news from Capitol Hill.
Financial markets had been climbing in recent weeks on the expectation that President Obama and the Congress would reach an agreement, adding further momentum to an economy that has been gaining strength.
But with the final days trickling away before the year-end deadline, the markets Thursday experienced their greatest volatility since the summer. It was also the fourth consecutive day of losses on Wall Street.
Investors responded almost instantly to pronouncements from leading lawmakers. Shares plunged in the morning after Senate Majority Leader Harry M. Reid (D-Nev.) predicted a deal would be unlikely by Tuesday and, with investors grasping at a straw of hope, bounced back in the afternoon when House Speaker John A. Boehner (R-Ohio) said he would call members back to work Sunday.
Analysts and economists said investors were finally recognizing that a typical last-minute Washington deal could prove elusive and instead lawmakers were gearing up for hand-to-hand combat over the weeks to come. If there’s no deal before Tuesday, taxes would rise for most Americans and deep government spending cuts would begin, dealing the economy a painful blow.
“There’s a realization sinking in,” said Vincent Reinhart, chief U.S. economist at Morgan Stanley. “It’s a learning process. People are beginning to think that the cliff is with us for a while longer.”
The American people simply cannot understand why Congress can’t do its job. This is a self-inflicted wound that could have been avoided. The Republican Party is at war with itself. The financial well-being of the country cannot be held ransom. We will all be the victims–the American people.
Also Thursday, House Speaker John A. Boehner (R-Ohio) announced that he would call the House back into session this weekend. And in perhaps the most significant development, Senate Minority Leader Mitch McConnell (R-Ky.) for the first time was engaged directly in talks with the White House. He signaled an interest in cutting a deal.
“The truth is, we’re coming up against a hard deadline here . . . and Republicans aren’t about to write a blank check for anything Senate Democrats put forward just because we find ourselves at the edge of the cliff,” McConnell said in a speech Thursday afternoon on the Senate floor.
Yesterday marks the 5th time that Congress has been called back early from Christmas vacation. Meanwhile, we will all watch the bottom drop out of our retirement funds and investments. More importantly, huge retirement funds like VRS, still reeling from the financial crash of 2008, take substantial nose-dives with the impending fiscal cliff just days away.
If House Republicans want to be the most vilified humans in America, they can continue on this track. If they want to redeem themselves, they can go in and follow their house leader and give John Boehner the votes he needs to strike a deal with the President.
For now, we just get to watch some absurd political theatrics being played out while Republicans continue their own internal civil war. Boehner is even trying to poke a stick in the eye of Harry Reid. I guess he just doesn’t have enough people to fight with. Meanwhile the Speaker has said the serenity prayer. His is not an enviable position.
“House Republicans are out to destroy the country’s economy.”
“The Republican Party is at war with itself. The financial well-being of the country cannot be held ransom.”
“House Republicans want to be the most vilified humans in America”
Man, those are some pretty harsh words…. so not only do Republicans want to DESTROY the country’s economy but they are also terrorists holding Americans hostage and their goal is to be the MOST VILIFIED humans.
I suppose that is one way to look at it…
It got your attention.
This is a horrible situation.
The Teaparty type Republicans ardently believe that to arrive at a smaller government, you have to starve the beast. That means cut off the governments money (no new taxes) apparently no matter what the short terms costs are. They believe that, in the long run smaller, leaner government will cost us less, will, therefore, put money back into our pockets, stimulate the economy and create jobs. So the questions that need to be resolved are: 1) are they right in the long term?, 2) If they are right, is it worth the short term costs?, 3) Do we want a smaller and leaner Federal Government?
No, No, and maybe…maybe leaner. Of course if you are sitting in the wake of Hurricane Sandy, you are hoping that leaness isn’t at the FEMA level. Does that mean shave down the military at critical times? I think smaller and leaner federal government is a dangerous statement without clarification.
I am all for federal road crews not standing around, collecting wages with nothing to do.
I am not for having 2 people doing jobs designed for 6 people like we have here in PWC because they cheap and Corey wants to brag about leaness. I am not for cutting back critical personnel. People moan, bitch and complain about the feds, charge that ICE isn’t doing its job, and then scream stop spending. Cognitive dissonance.
Accept no responsibility and name call – now that is a solution worthy of this administration.
Feel free to point out any names I have called.
I sure don’t see it.
If they want to redeem themselves, they can go in and follow their house leader and give John Boehner the votes he needs to strike a deal with the President.
Translation: roll over for the President’s increased spending and ludicrous taxes.
Funny…its all the GOP’s fault because they didn’t pass a bill that the Democrats in the Senate said was DOA if passed and the President said would be vetoed if passed. Its never the Democrats being stubborn and partisan…..ever.
OPM is issuing furlough guidelines to agencies.
Let’s just kick the can down the road a little more – that is what Congress has been doing for years. The R’s want to extend rates for another year.
If there is no deal, the US will like be downgraded again – who is at fault – Congress. And, it has been going on for years. Everyone says Reagan was a great President, but he is the one who got us going on this spending binge, and Bush continued it. Now, no one wants to address it. Obama has been trying, but has been turned down by the R’s. For the US to get its fiscal house in order, it must be a bi-partisan effort.
Clinton sure understood it. Of course, Newt Slime Gingrich tried to take credit for that. He would take credit for Monica Lewinsky if he thought he could get by with it. that is sort of the alter ego of I wouldnt touch her with Bill Clinton’s ….well you get the drift.
The inability of these guys (I include the entire Congress for these purposes) to govern, as opposed to stumble around in a stuporous, juvenile, perpetual campaign mode, has cost me thousands of dollars in the share prices of my holdings over the past few weeks. The absence of a coherent, politically achievable bipartisan approach to the cliff is far more damaging financially to most people in the upper brackets than the impact of Obama’s tax proposals could conceivably be.
It has killed me. It killed me in August 2011. I am certainly no where near being wealthy. I am just trying to not be a burden to someone in later life. These clowns are dissolving that every day they keep screwing around. I really do blame those voting no on everything.
So far in the negotiations between the President and the House, the President has:
1. Dropped his request for new taxes by about $350 billion.
2. Raised proposed spending cuts by about $400 billion.
3. Dropped proposed stimulus spending from $425 billion to $175 billion.
Boehner has:
1. Increased his offer on new taxes by about $150 billion.
2. Dropped spending cuts by about $375 billion.
3. That’s it.
No matter where you stand on these policies, it’s clear that from a negotiating standpoint, the President has come much further towards Boehner’s position than vice-versa. This is in spite of the fact that the President has the American people behind him (from poll data) in his positions, and that the President already agreed to 1.5 trillion in budget cuts in 2011 that are now written into law.
Yet, Boehner walked away, and badly miscalculated his caucus on Plan B. I think he miscalculated because even he didn’t think his extremists were so extreme. Politics is the art of compromise, but the anti-democratic tactics of the extreme right prevent compromise. If they can’t win elections, they try to steal them. If they can’t steal them, they try to ignore the outcome. The American people see what’s happening, the question is- will they rise up against it?
Well put, Middleman! Standing ovation.
@middleman
Actually, the original compromise was increasing taxes at all…so Boehner raised his level to about $1 trillion. And the President’s inclusion of ANY new spending is proof that he is not negotiating in good faith.
So the President lowered his new tax increases to 1.3 trillion. Tax increases during a de facto recession….great.
Neither party is serious…and you mention Obama. Why is Obama negotiating> Where’s the Senate?
Instead of a “deal,” lets put the entire discussion on the floor of the House…whatever passed…send to the Senate. The Senate should then debate it and send it back…rinse, repeat. THEN send it to the President.
You know…how it SHOULD be done, instead of these “deals.” Screw the deals.
Or..hey…here’s an idea….Congress invented the “cliff.” Congress can repeal or extend the “cliff.” Neither side wants to rein in spending, period. And it seems the Democrats supporters, as demonstrated here, have never met a gov’t program that needs to be cut. Since the idea of prioritization never seems to arise among Democrats and their supporters…. and cutting spending is always wrong….let the cliff happen. Everybody should realize what they are having to pay for their programs. Oh…what’s that? It’ll cause a recession? But higher taxes don’t hurt the economy. Just ask the President. The choice is more borrowing or higher taxes.
It’s time to pay the piper.
I would just as soon not loose any more money while Congress dodges asking cargo for the answers.I am perfectly happy with the Obama plan as outlined by Middleman.
Cargo, it seems that you would rather have retirees screwed over, which is what will happen, rather than the weathy have to pay a penny more in taxes.
Congress has already kicked this can down the road far too many times – that is why we are here, with so much unfinished business. The R’s were so confident that they were going to win the White House, that they thought they could postpone everything. Well, the R’s not only did not win the White House, but lost seats in the Senate and House – how is that for ya??
Time to stop kicking the can down the road, and put all options on the table – as many left and right economists have been saying – a balanced approach is what is needed.
Cargo, it appears you’re really reaching here- inventing strawmen that don’t want any cuts, suggesting that the President shouldn’t be involved in formulating legislation that he will sign, that congress shouldn’t make deals, that Obama wants “new” tax increases, that we’re in a de-facto recession- that’s a lot for one post!
And all of it wrong or misconstrued. At some point spin becomes just plain misinformation. I don’t see anyone here saying that no programs should be cut. The added revenue Obama wants is from rescinding tax cuts that were always meant to be temporary, not from new taxes. Our economy has been in recovery for 3 years- I have no idea what a “de-facto recession” is. As for congress making deals and the President’s involvement in legislation, the former is called making sausage and the latter is called leadership.
You apparently think of the deficit as the be-all and end-all that must be paid back immediately, and I agree that the deficit is important, but not as important as maintaining and improving our recovery is. Misrepresenting each other’s positions and motivations won’t add anything to the debate.
Thank you for spelling that out, Middleman.
@middleman
I am misrepresenting nothing.
My post was about “deal making” instead of allowing the discussions to be hammered in public, on the floor. Obama DOES want new tax increases…..Obama Care is full of tax increases. He campaigned on increasing taxes. And we are in a defacto recession if the the inflation is higher than is being stated. Do you believe that inflation is really under 2%?
I think of the deficit and the debt as a major liability that has to be paid back. And since spending has spun out of control….so much so that we are monetizing the debt…as soon as the economy does recover….eventually it will despite Obama, hopefully, inflation will come back. I don’t think that the debt and deficit need to be paid back immediately. I would be happy if the idiotic baseline spending was stopped. I’m tired of the President and Congress lying to us when they claim a spending increase is a cut…because they decided to increase spending by only 3 trillion instead of 4 trillion dollars.
You seem to believe that spending and debt can increase with no problems.
Well, you have your wish. Enjoy.