THE RESET: Fiscal cliff talks off to a rocky start
Don't hold your breath waiting for a "fiscal cliff" agreement. Landmark deals between presidents and Congresses sometimes aren't struck until the final hour of the final day before lightning strikes.
The negotiations to avert a year-end economic disaster of automatic tax increases and spending cuts may be following such a pattern.
With just four weeks to go to the "fiscal cliff," the postelection test of wills is being played mainly in public — on television shows, news conferences and by President Barack Obama's campaign-style excursions to gin up popular support and strengthen his bargaining hand.
There's been little progress at the negotiating table.
In fact, there doesn't even seem to be a negotiating table.
"We're nowhere, period," House Speaker John Boehner told "Fox News Sunday."
Treasury Secretary Timothy Geithner, Obama's point man for the talks, went on five Sunday news shows to reiterate the administration's insistence on higher taxes for households earning over $250,000. After all, Obama ran on it and Democrats see raising taxes on the wealthy as a mandate.
Republicans oppose increasing any tax rates, while saying they're willing to trim unspecified deductions to boost tax revenues.
They mostly want to tame soaring deficits with federal spending cuts, particularly on entitlement programs such as Medicare and Medicaid.
Strangely, the simplest option for both the president and Congress — doing nothing and going over the cliff— would give both sides a lot of what they want. Obama would get higher taxes on the wealthy. And Republicans would get deficit-slashing spending cuts.
And a lot more.
Defense spending would also suffer from across-the-board cuts, which Republicans don't want. And nearly everyone's taxes would rise, which neither side wants.
While some of the self-inflicted mix of tax hikes and spending cuts could be undone retroactively, the austerity bomb could trigger a new recession.
Unfortunately, how this plays out may not be known until we're welcoming in 2013.
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