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Fiscal Cliff: Obama Cuts Holiday Short

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Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Thu 27 Dec - 23:56

Fiscal Cliff: Obama Cuts Holiday Short


President Obama leaves his family in Hawaii to return to Washington for crisis talks on a budget deal to avert the 'fiscal cliff'.


6:37pm UK, Thursday 27 December 2012



Video: Mr Obama at Andrews Air Force Base, Maryland after flying from Hawaii
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Sky's Economics Editor Ed Conway explains the US fiscal cliff.

Video: Fiscal Cliff Explained In 60 Seconds......click on video
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  • US President Barack Obama has cut short his Christmas holiday in Hawaii to return to Washington for crisis talks on averting the so-called 'fiscal cliff'.

    The White House and Congress have until the end of the month to reach a compromise on how to avoid a series of tax increases and spending cuts worth $600bn (£371bn) that were initially designed, in the era of President George W Bush, to scare politicians into a Budget deal.

    These measures will kick in on January 1 without an agreement.

    Economists fear that unless the Democrat President and a Republican-dominated Congress do a deal, the pain inflicted by a plunge over the fiscal cliff would tip the US into recession and hurt the wider world recovery.

    There is little sign of a compromise on Capitol Hill as Congress returns from its Christmas break.
    Republican John Boehner is leading the negotiations with President Obama
    While UK markets were closed for the Boxing Day holiday, those in the US lost some ground as nerves began to resurface.

    The FTSE 100 opened almost 0.2% lower in London on Thursday but soon recovered that back - a sign that investors were prepared to wait for news on the crisis talks.

    A rush for safe havens is predicted if it becomes clear that no deal is possible.

    It is understood that both sides are already drawing up plans for a 'blame game' in the event that compromise fails to materialise.

    While President Obama has looked to protect the most vulnerable the Speaker of the House of Representatives, John Boehner, has said that targeting more tax from business and the wealthy would be counter-productive to job creation.

    Experts suggest the two men could reach a short term deal to beat the deadline but there is no guarantee it would be backed by the House.

    While Mr Boehner was personally humiliated by the failure to secure backing for his own solution to the crisis before Christmas, polls show that public frustration and anger with politicians is growing as the deadline looms.

    Before leaving Hawaii, it emerged Mr Obama had called the main protagonists in the talks to discuss tackling the fiscal crisis.

    The talks gained an extra layer of urgency late Wednesday with the news that the government was going to hit its $16.4tn borrowing limit - its so-called debt ceiling - on Monday.

    Treasury Secretary Tim Geithner told Congress that he would use accounting measures to try to save approximately $200bn but the stopgap measures would only prevent the government from going over its borrowing limit for probably only a couple of months.

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Fri 28 Dec - 20:13

Isn't it ridiculous when Politicians cannot work together in times like this. Apparently Obama has moderated some of the taxes but will not budge on the taxing of the rich. Monday is the deadline and it is hoped Obamas' action will lead the Republicans to see sense.

The American people are fed up with this knife edge politics and want action .

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  AnnaEsse on Fri 28 Dec - 22:17

DHS Whistleblower Reveals Planned Economic Crash and Violent Aftermath

This is very long, so I won't copy and paste.


http://chemtrailsplanet.net/2012/12/28/dhs-whistleblower-reveals-planned-economic-crash-and-violent-aftermath/

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Claudia79 on Fri 28 Dec - 22:25

Here we have a damn government which taxes the middle class until it is no longer middle class while the rich get a free pass and we keep saying this can no longer continue. In the US they are trying to tax the rich and they aren't allowed. Can we please send our government to the US?

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  AnnaEsse on Fri 28 Dec - 22:51

What has Harry Reid done?


Nothing is more infuriating than hearing a politician who has failed to act in six months on a single piece of legislation to end a crisis complaining about someone who has strenuously worked to produce a solution to the problem.

Harry Reid, also known as the Duke of Do-Nothing, is just such a whiny specimen.

The Senate majority leader's pronouncement that there is not time for Congress to act to avoid the "fiscal cliff" is both arrogant and absurd.

His finger-pointing at the Republicans is even more infuriating.

Memo to Harry: the House of Representatives passed legislation to prevent going over the cliff — it simply extends the Bush tax cuts. The House also passed legislation replacing the sequestration cuts that were part of Harry’s only accomplishment of the past two years, with alternative cuts.

Reid has failed to act on either bill.

In fairness, while Reid hasn’t bothered to produce a budget for more than three years out of fear of creating a political issue that might depose him from his Lordship over DumDumville, his Senate did pass legislation this summer that dramatically raised taxes on everyone making more than $250,000 a year.

Of course now, Reid is refusing to compromise off that position, which coincidentally isn’t far removed from Speaker John Boehner’s "Plan B" solution — a plan Reid summarily dismissed.

By refusing to reach a compromise with House Republicans, Reid is playing a dangerous game aiming for complete victory through the political neutering of his foes. His plan depends upon a complicit media to blame the Republicans, while not mentioning the ramifications of his rejection of the white-flag-waving Boehner’s Plan B offer.

When we go over the fiscal cliff, it will not be because House Republicans failed to pass legislation that prevented it. It will be because Harry Reid chose to pursue a course that guaranteed that outcome.

The truth is that Democrats want higher taxes, not just on the wealthy, but on the rest of us who are not yet part of the dependency state they have built. The fiscal cliff just gives them the ideal opportunity to impose them, while blaming the Republicans.

The truth is that the Democrats want defense cuts imposed, and they love to see the House Republicans getting the blame.

The truth is that every American who pays taxes is likely to see their paychecks shrink next year because Reid would rather play politics in the expectation that he can affix the blame to his political foes.

That’s the sad situation in Washington, D.C., where politics trumps everything else. And if you think this “fight” has been tough, wait until you see what happens with the upcoming debt ceiling and Continuing Resolution wars.

Those who are faint of heart need to turn away, because you ain’t seen nothing yet.

http://thehill.com/blogs/pundits-blog/economy-a-budget/274673-what-has-harry-reid-done

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Sat 29 Dec - 3:47

I think the U.S. Debt is $161 Trillion and like all Western World Countries we have lived beyond our means ever since credit facilities were used to create growth. Are we heading for a WorldWide depression?Could be . The crazy part is that only a few % of the World population owns ALL THE WEALTH and they resist any effort to pay their taxes.

Let's hope common sense prevails .

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Sat 29 Dec - 4:35

Fiscal Cliff: Obama 'Optimistic' After Talks


President Obama is holding out hope for a last-minute agreement to avoid the fiscal cliff of tax increases and spending cuts.


12:58am UK, Saturday 29 December 2012



Video: Obama Urges Action On Fiscal Cliff
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  • Barack Obama has called for "immediate action" to avoid the so-called fiscal cliff after urgent talks with Congressional leaders.

    He urged politicians to agree a deal, saying: "The hour for immediate action is here. It is now."

    He said he remained "optimistic" that an agreement could be reached to avoid millions of families being hit with big tax increases and spending cuts.

    Mr Obama described the hour-long meeting with Congressional leaders as "good and constructive".

    He referred to "dysfunction in Washington" and said the American public was "not going to have any patience for a politically self-inflicted wound to our economy".

    Surprisingly, after weeks of post-election gridlock, Senate leaders said they hope to reach a compromise that could be presented to lawmakers by Sunday - little more than 24 hours before the year-end deadline.

    Majority leader Harry Reid and Republican leader Mitch McConnell gave a relatively upbeat assessment after what Mr McConnell called a "good" meeting with Mr Obama.

    "I am hopeful and optimistic" of reaching a deal, Mr McConnell said.

    Mr Reid promised he would be "going to do everything I can" to make a deal happen, but added: "Whatever we come up with is going to be imperfect."

    The US faces the problem because tax rate cuts dating back to George W Bush's presidency expire at the end of the year.

    The pending reductions in spending, which will hit everything from social programmes to the military, were put in place last year as an incentive to both parties to find ways to cut the US's soaring deficit.

    It followed their inability to reach an agreement in 2011.

    If Congress cannot agree a deal to rein in government spending, Mr Obama said Congress should allow a vote on a basic package that would keep tax cuts for middle-class Americans while extending unemployment benefits for the long-term unemployed.

    The stock market was down again on Friday as the wrangling continued in Washington.

    Experts say if the looming tax increases and spending cuts are not scaled back, the recovering but fragile US economy could slip back into recession.

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Mon 31 Dec - 12:02

The Bankers, Economists etc are saying the Fiscal cliff does too much deficit reduction when the economy is so volatile.

There is anger that the Leaders are not working together and this is Washington at its worst . The Tax benefits Bush instigated expire today and apparently the Republicans want it renewed because it benefits the rich, but Obama says no., but has made concessions in other areas and says it's up to the Republicans to be realistic.

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Mon 31 Dec - 19:11

Well after many hours an agreement has finally been reached , Obama has not got all he wanted but neither has

Congress. It is hoped this will calm the market and the new taxes will not prohibit growth. It is accepted that the debt level MUST be brought down , China is owed $143 Trillion and Japan also is owed a lot of money.

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  wjk on Mon 31 Dec - 21:25

http://news.sky.com/story/1031794/fiscal-cliff-deal-within-sight-obama

President Barack Obama has said the deal to avert the fiscal cliff is "within sight" but not done yet.

Flanked by guests at a White House event for middle-class Americans, the president spoke on Monday afternoon as the talking continued.

"Today it appears that an agreement to prevent the New Year tax hike is within sight but it's not done," he said, adding he would have preferred to see an all-embracing deal rather than a compromise on only certain points.

"That's progress but we're going to need to do more."

The compromise proposal would raise tax rates on families making over $450k a year to 39.6%.

The tax on estates worth more than $5m would increase to 40% from 35%. Unemployment benefits would continue for one year.

But the White House and Republicans are said to be stuck on what to do about automatic, across-the-board spending cuts set to start taking effect on Tuesday.

Democrats want to put off the cuts for one year and offset them with unspecified revenue.

Officials emphasised that negotiations were continuing and the emerging deal was not yet final.

The talks between the White House and congressional Republicans are being led by longtime negotiating partners Vice President Joe Biden and Senate Republican leader Mitch McConnell.

The deal would achieve about $600bn in new revenue, the officials said.

Unless an agreement is reached and approved by Congress by the start of New Year's Day, more than $500bn in tax increases for nearly all Americans will begin to take effect, and $109bn will be cut from defence and domestic programmes.

The House of Representatives and the Senate have been meeting - a rarity for New Year's Eve - in the hope of finalising a tentative agreement to consider.

But Republicans, who control the House, are scared of raising taxes.


Speaker John Boehner would have to shepherd any deal through the House

And Democrats, who control the Senate and the White House, are scared of cutting spending.

"There are a number of issues on which the two sides are still apart," Democratic Majority Leader Reid conceded earlier.

Even if the Senate does sign off on a deal on Monday night, avoiding the cliff could go down to the wire.

The bill must then go to the Republican-controlled House of Representatives where House Speaker John Boehner has struggled to control his party's conservative wing, which is vehemently opposed to raising taxes.

If there is no final deal, the economic effects would be gradual but harsh.

America could lose up to 3.4 million jobs, with budget cuts of up to 9% for most of the US government, according to the Congressional Budget Office.

If the limit is not raised on how much the government can borrow, the government will reach its $16.4trn ceiling in February or March.

That could lead to a first-ever default that would shake worldwide confidence in the United States.

On top of all of that, after January 3, it will be down to a newly elected Congress with 13 new senators and 82 new House members to resolve the problem.


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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Tue 1 Jan - 8:49

Last-Minute Deal Reached On US Fiscal Cliff


The White House and Republicans reach an agreement to prevent automatic tax rises and spending cuts.


7:36am UK, Tuesday 01 January 2013

Barack Obama remained optimistic that a deal could be reached









  • The US Senate has approved legislation aimed at averting the so-called fiscal cliff by stopping most tax hikes and across-the-board spending cuts that were due to begin with the New Year.

    The legislation was approved with an overwhelming 89-8 vote, and came well after midnight on New Year's Day.

    The House of Representatives must still approve the measure, possibly on Tuesday.

    President Barack Obama has praised the agreement, saying: "While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay."

    Without the legislation, economists had warned of a possible new recession and spike in unemployment.

    The White House-backed legislation would prevent middle-class taxes from rising, and raise rates on incomes over $400,000 for individuals and $450,000 for couples.

    It also blocks spending cuts for two months, extends unemployment benefits for the long-term jobless, prevents a 27% cut in fees for doctors who treat Medicare patients and prevents a spike in milk prices.
    Vice President Joe Biden after a Senate Democratic caucus meeting on Monday
    The deal would allow the White House and lawmakers time to regroup before plunging quickly into a new round of budget brinkmanship certain to revolve around Republican calls to rein in the cost of the Medicare health programme for the elderly and other government benefit programmes.

    Officials also decided at the last minute to use the measure to prevent a $900 pay rise for lawmakers due to take effect this spring.

    Vice President Joe Biden, who negotiated the deal with Republican Senate Majority leader Mitch McConnell, was on Capitol Hill to sell it to Democratic senators.

    The tax hikes and spending cuts were due to come into force at midnight. But as global markets are closed for New Year's day, lawmakers have time to vote the deal into law.

    The White House and Congressional leaders hope to send legislation to Mr Obama within a day or two, meaning consumers shouldn't notice any impact.

    Mr Obama had originally campaigned for tax hikes to kick in for those making $250,000 and above and his acceptance of a higher threshold has already angered liberals, though still represents a political victory.

    The president said the deal would extend tax credits for clean energy firms and also unemployment insurance for two million people.

    Both sides are already gearing up for the next legislative showdown over the need to lift the government's statutory borrowing limit of $16.4trn, which was reached on Monday.

    The Treasury will now take extraordinary measures to keep the government afloat for an undisclosed period of time until the ceiling is raised. Republicans are already demanding spending cuts in return.

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Tue 1 Jan - 20:30

Senate’s New Year’s Cliff Deal Shifts Pressure to Boehner


By Richard Rubin & Kathleen Hunter - Jan 1, 2013 7:05 PM GMT




The U.S. Senate passed a bipartisan budget deal two hours after income tax cuts expired, reaching an after-deadline agreement to undo the potential economic harm of $600 billion in tax increases and spending cuts.

The vote early today in Washington shifted the pressure to House Speaker John Boehner, who hasn’t said whether he’ll accept the agreement. He will face difficulty mustering Republican votes for any bill with higher taxes for 2013. The House convened at noon today Washington time to consider the budget plan and other measures.





Enlarge image

House Speaker John Boehner on Dec. 30, 2012.




J. Scott Applewhite/AP Photo

Speaker of the House John Boehner, leaves a closed-door GOP caucus meeting at the Capitol in Washington, on Dec. 30, 2012.

Speaker of the House John Boehner, leaves a closed-door GOP caucus meeting at the Capitol in Washington, on Dec. 30, 2012. Photographer: J. Scott Applewhite/AP Photo




6:17
Dec. 31 (Bloomberg) -- Alice Rivlin, senior fellow at the Brookings Institution and former vice chairman of the Federal Reserve, talks about fiscal negotiations between U.S. lawmakers aimed at averting hundreds of billions of dollars in automatic tax increases and spending cuts. She speaks with Deirdre Bolton and Peter Cook on Bloomberg Television's "Money Moves." (Source: Bloomberg)




4:58
Dec. 31 (Bloomberg) -- Grover Norquist, president of Americans for Tax Reform, talks about negotiations between U.S. lawmakers over the so-called fiscal cliff of $600 billion in automatic tax increases and spending cuts set to start at midnight. Norquist speaks with Erik Schatzker on the Bloomberg Television special "America's Fiscal Debate." (Source: Bloomberg)




9:39
Dec. 31 (Bloomberg) -- President Barack Obama speaks at the White House about the outlook for fiscal negotiations in Congress aimed at averting hundreds of billions of dollars in automatic tax increases and spending cuts. (Source: Bloomberg)




3:33
Dec. 31 (Bloomberg) -- Sen. Chris Coons (D-DE) talks with Bloomberg's Peter Cook about the latest developments in the fiscal cliff negotiations. They speak on Bloomberg Television's "Bloomberg Rewind." (Source: Bloomberg)



Enlarge image

U.S. Capitol Dome






The U.S. Capitol stands in Washington, D.C., U.S., on Monday, Dec. 31, 2012. The U.S. House of Representatives doesn't plan any votes on the federal budget tonight, meaning that Congress for now will fail to avert $600 billion in tax increases and spending cuts set to start at midnight. Photo: Andrew Harrer/Bloomberg

The U.S. Capitol stands in Washington, D.C., U.S., on Monday, Dec. 31, 2012. The U.S. House of Representatives doesn't plan any votes on the federal budget tonight, meaning that Congress for now will fail to avert $600 billion in tax increases and spending cuts set to start at midnight. Photo: Andrew Harrer/Bloomberg

Texas Republican Lamar Smith told reporters that House leaders are likely to seek to change the bill, which would send it back to the Senate. “I expect it to be amended,” he said as he left a closed Republican caucus.

House leaders won’t decide how to proceed until after that meeting with rank-and-file members and another one set for later in the day, said a Republican aide who asked for anonymity. Vice President Joe Biden met with House Democrats today.

The Senate bill, passed 89-8, would make permanent the tax cuts for most households that ended at midnight, continue expanded unemployment benefits and delay automatic spending cuts for two months. A 2 percent payroll tax cut would be allowed to expire.

‘The Right Thing’


“While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay,” President Barack Obama said in a statement released by the White House this morning.

The agreement isn’t the grand bargain on deficit reduction lawmakers wanted when they created the conjoined tax-and- spending deadlines over the past three years. Instead, if the agreement becomes law, it would avert most of the immediate pain and postpone Congress’ fiscal feud for just two months -- until a February fight over raising the $16.4 trillion debt limit.

Democratic Representatives Norm Dicks of Washington, Elijah Cummings of Maryland and Gene Green of Texas said after meeting with Biden that they will vote for the plan. Dicks and Green said the sentiment in the meeting was that most Democrats will back the deal.

Senator Charles Schumer, a New York Democrat, said there are “many, many reasons why people dislike portions of this bill, but there’s close to unanimity that it’s better than going over the cliff.”

Fiscal Cliff


If it’s brief, the dive off the so-called fiscal cliff, a term Federal Revenue Chairman Ben Bernanke used when he spoke to the House Financial Services Committee in February, would have relatively minimal effects. It would avoid the recession that a longer lapse would cause.

Still, the payroll tax cut expiration and higher taxes for top earners will probably slow the economy, reducing growth in the first quarter to 1 percent from 3.1 percent in 2012’s third quarter, according to economists at JPMorgan Chase & Co. (JPM)

“Underneath the fiscal drama is an improving economy,” said Ryan Sweet, a senior economist at Moody’s Analytics. “The fiscal drag will take some wind out of it but once there is more clarity, we can expect stronger growth.”

The budget deal would raise taxes on 77 percent of U.S. households, mostly because of the expiration of the payroll tax cut, said the nonpartisan Tax Policy Center in Washington.

The heaviest new burdens in 2013, compared with 2012, would fall on top earners who face higher rates on income, capital gains, dividends and estates. The top 1 percent of taxpayers, or those with incomes over $506,210, would pay an average of $73,633 more in taxes, the Tax Policy Center said.

Markets React


Ahead of a potential deal, the Standard & Poor’s 500 Index jumped 1.7 percent to 1,426.19 at 4 p.m. yesterday in New York for its biggest gain since Nov. 19. Ten-year Treasury yields were up six basis points at 1.76 percent, still the lowest-ever year-end close. The Japanese yen weakened, capping the biggest annual drop versus the dollar in seven years. Gold extended a 12th annual gain, the longest streak since at least 1920.

The agreement, reached in the waning hours of 2012, was brokered by Biden and Senator Mitch McConnell of Kentucky, the chamber’s Republican leader. Obama met with his staff until 2 a.m. on Dec. 31, and Biden sold the agreement to Senate Democrats in a two-hour New Year’s Eve session in the Capitol.

Obama spoke with Democratic leaders in Congress last night before Biden came to the Capitol and hadn’t spoken with Boehner as of about midnight, said people familiar with the talks.

Voting Against


Three Senate Democrats voted against the measure: Michael Bennet of Colorado, Tom Harkin of Iowa and Tom Carper of Delaware. They were joined by five Republicans who voted no: Chuck Grassley of Iowa, Mike Lee of Utah, Rand Paul of Kentucky, Marco Rubio of Florida and Richard Shelby of Alabama.

Compared to continuing current policies, the agreement would increase taxes by $620 billion and cut spending by $15 billion, according to people familiar with the negotiations.

The bill marked a rare bipartisan agreement for lawmakers who have been trying for more than two years to reach an accord on taxes and spending, hurtling from deadline to deadline. Even this least-common-denominator agreement required brinkmanship and came after weeks of partisan bickering.

“It’s not the big, bold, bipartisan deal that we need, that the markets need, that our country needs, but a smaller deal that still provides some confidence to 98 percent of American families and small businesses that their tax rates won’t go up,” Senator Chris Coons, a Delaware Democrat, said on Bloomberg Television. “So while it’s not what I had hoped, it is at least some progress in dealing with the fiscal cliff.”

Sales Job


Winning passage in the House will require a sales job by leaders who are trying to resist pressure from the ideological fringes of their parties. House Republicans oppose tax increases for any income level and many may resist a bipartisan Senate deal that lacks spending cuts. Some Senate Democrats opposed the bill because it didn’t raise enough revenue.

Boehner has said the House might change the Senate measure and send it back to that chamber for consideration. Senators said they hoped bipartisan support would prompt the House to accept the deal.

“The speaker has said all along that he was waiting for the Senate to act,” Senate Majority Leader Harry Reid said. “Now I hope for America that he will allow the full House of Representatives to vote on this bipartisan legislation.”

New Congress


In some sense, the real deadline is noon on Jan. 3, when the current Congress leaves office and the new Congress will be sworn in. If a plan isn’t enacted by then, the process would have to be restarted with dozens of new members, including a stronger Democratic majority in the Senate and a smaller Republican majority in the House.

The deal passed by the Senate would raise tax rates on income of individuals above $400,000 and married couples above $450,000. That’s double the individual threshold Obama campaigned on and 80 percent higher than his preferred level for married couples.

Still, Obama used the leverage from his re-election and the expiration of the tax cuts to force Republicans to break their no-tax-increase position. The top rate would go to 39.6 percent, up from 35 percent.

The top rates on capital gains and dividends would increase to 23.8 percent starting at the same income thresholds, including a 3.8 percent tax that starts today on top earners. Limits on personal exemptions and itemized deductions for top earners that had been phased out will return, for individuals starting at $250,000 and married couples starting at $300,000.

$5 Million Exemption


Estates would receive a more-than $5 million exemption and 40 percent top rate, splitting the difference on rates between Republicans and Democrats. The exemption would be indexed for inflation. The alternative minimum tax would be permanently fixed to prevent it from expanding to more households.

For ultra-high-net-worth families, the estate tax rate -- rather than the exemption -- is most important, said Jere Doyle, senior wealth strategist at Bank of New York Mellon Corp. (BK) whose clients usually have at least $10 million in net worth.

“What the marginal dollars are taxed at, whether it’s 35, 45 or 55 percent, that’s the big deal,” Doyle said. “The exemption’s is a drop in the bucket for a lot of wealthy people.”

Expanded unemployment benefits would be extended for a year, and tax breaks for low-income families would be continued. That costs about $30 billion and isn’t offset with spending cuts, according to people familiar with the talks.

Spending Cuts


The automatic spending cuts, which were the biggest stumbling block yesterday, would be delayed for two months from their scheduled start date of tomorrow.

Half of the $24 billion cost of delaying the cuts would be covered by allowing 401(k) retirement account holders to convert some of their balances into Roth-style accounts that can be tapped tax-free in retirement, said a Senate aide familiar with the talks.

The change would raise revenue because people who do such conversions pay income taxes up front. The conversions aren’t currently allowed in 401(k) plans, the aide said.

The other half of the spending cuts would be prevented through replacement spending cuts, half in defense and half in non-defense programs, said Senator Sherrod Brown, an Ohio Democrat.

Miscellaneous Breaks


Miscellaneous tax breaks would continue through 2013, including breaks for corporate research, multinationals’ overseas financing operations and wind energy. Many of those breaks had expired at the end of 2011. Companies would get 50 percent bonus depreciation.

The agreement wouldn’t avert all of the tax increases set to take effect this year. A two-percentage-point cut in the payroll tax has expired and isn’t part of the emerging deal.

That will make paychecks smaller in 2013; someone earning $50,000 and being paid twice a month will lose $41.67 per paycheck. The payroll tax cut’s expiration will end transfers from the general fund to Social Security to cover its cost.

Taxes on top earners’ wages and unearned income such as capital gains will take effect, due to the start of revenue increases from the 2010 health care law.

The Internal Revenue Service told employers last night to withhold taxes from paychecks assuming that lapsing tax cuts would expire as scheduled and said it would issue updated tables if Congress passes an extension. Employers should implement the higher withholding by Feb. 15, the IRS said in a statement issued 12 minutes before midnight.

Debt Ceiling


The agreement also sets up yet another fiscal fight, this time over raising the U.S. debt ceiling, which reached its $16.4 trillion limit yesterday.

Treasury Secretary Timothy F. Geithner began taking so- called extraordinary measures to finance about $200 billion in debt this year. Under normal circumstances, that would last about two months.

Republicans say they’ll use the leverage created by the debt ceiling to force Obama to accept spending cuts, particularly in entitlement programs.

Obama resisted that notion yesterday, saying he wants more tax increases that would come in part from limit tax breaks and that he won’t accept Republican plans to “shove” spending cuts past him.

“If they think that’s going to be the formula for how we solve this thing, then they’ve got another thing coming,” he said. “That’s not how it’s going to work.”

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Tue 1 Jan - 22:19

It's not all over yet, Republican No 1 says he may reject, No.2 says NO......for goodness sake , grown men in charge of the Nation can't get together like adults at such a critical time????

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Wed 2 Jan - 6:57







  1. Fiscal cliff: US House of Representatives approves deal

A deal to reverse the effects of America's fall over the "fiscal cliff" has passed in the House of Representatives despite a last-minute rebellion by Republicans over the lack of spending cuts.








U.S. President Barack Obama winks as he arrives with Vice President Joe Biden (L) in the briefing room Photo: REUTERS/Jonathan Ernst





4:43AM GMT 02 Jan 2013

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As financial markets across the world were due to reopen for the New Year, the deal passed in a late-night vote by 257 to 167. It will now go to the White House to be signed into law by the president.


The bill, which had been the subject of intense negotiations between the two parties for weeks, was unpopular with many Republicans because it raises taxes on the wealthy and puts off automatic $109 billion budget cuts for two months.


Speaking after the bill passed, Barack Obama said he had fulfilled a campaign promise to make the US tax system fairer with the deal to avert the fiscal cliff crisis.


Praising the bill, he said it was "just one step in the broader effort to strengthen the economy."


But, acknowledging the public's anger over the drawn out political wrangling, Mr Obama, who will now fly back to join his family in Hawaii on holiday, urged "a little less drama next time".



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"The one thing that I think hopefully in the New Year we'll focus on is seeing if we can put a package like this together with a little bit less drama, a little bit less brinksmanship, not scare the heck out of folks quite as much," he said.

He also warned that he would not bargain with Republicans in Congress or offer spending cuts in return for lifting the government's borrowing limit, known as the debt ceiling, in the coming months.

"While I will negotiate over many things, I will not have another debate with this Congress over whether or not they should pay the bills that they've already racked up through the laws that they passed," the president said.

The legislation passed in the Senate early on New Year's Day, but for many hours its fate hung in the balance.

Earlier in the day, Republican leaders had hinted they would derail its passage through the House, saying there was "universal concern" in the party that the compromise did not balance new taxes with fresh cuts.

But as the hours ticked by there were signs that the Republican revolt was losing strength. Representative Steve LaTourette, an Ohio Republican, said he would support the Senate bill and that his party needed to know "when to hold and when to fold". Party leaders also feared that they would be blamed if the deal, which had passed in the Senate, collapsed.

Had the deal failed to pass in the House, all Americans would have been hit by tax increases and the spending cuts would have kicked in across the government, threatening to throw the US economy into recession.

The bill, which was designed by both parties' Senate leaders and mediated by Joe Biden, the vice president, raises taxes on all households making more than $450,000 (£277,000).

However, it includes few spending cuts and instead delayed major cutbacks to the military budget and domestic programmes until the beginning of March.

Speaking in the House before the vote, House Democratic Leader Nancy Pelosi urged bipartisan support for the bill, saying it included "permanent tax relief for the middle class."

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The U.S. Debt will rise to $164 TRILLION...........however is this going to be repaid????

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  wjk on Wed 2 Jan - 12:46

Thanks Panda.
That amount can surely never be repaid?

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Wed 2 Jan - 17:01

wjk wrote:Thanks Panda.
That amount can surely never be repaid?

Hi wjk......as far as I remember $143 trillion is owed to the Chinese and if the U.S. reneged on the loan, the Chinese could go into America and take what they want, even if it is privately owned.!!!!

The US , like most Countries around the World is facing hard times and America is not the great power it once was, the emerging Nations, Brazil, China, India etc will become top dogs and the indebtedness of the US and Britain will take at least two generations to repay and that's assuming we don't enter into a depression.....cheerful Soul aren't I ?

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  Panda on Wed 2 Jan - 17:18

ISubject: Fw: Fiscal Cliff - This is so easy to understand.



















“Fiscal Cliff” put in a much better perspective
Lesson # 1:
U.S. Tax Revenue: £2,170,000,000,000
Federal Budget: £3,820,000,000,000
New Debt: £1,650,000,000,000
National Debt: £14,271,000,000,000
Recent Budget cuts: £38,500,000,000


Let’s now remove 8 zeros and pretend it’s a household budge:
Annual family income: £21,700
Money the family spent: £38,200
New debt on the credit card:£16,500
Outstanding balance on the credit card: £142,710
Total budget cuts so far: £385


Got it?…. OK now…
Lesson # 2
Here’s another way of looking at the Debt Ceiling:
Let’s say you come home from work and find there has been a sewer backup in your neighbourhood… and your home has sewage all the way up to your ceilings.
What do you think you should do?


Raise the ceiling or remove the shit?


================================


just received this.....worth putting it here.

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Re: Fiscal Cliff: Obama Cuts Holiday Short

Post  wjk on Wed 2 Jan - 17:22

Brilliant!

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Re: Fiscal Cliff: Obama Cuts Holiday Short

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