News / USA

Internal Pressures Complicate 'Fiscal Cliff' Talks

U.S. House Minority Leader Nancy Pelosi speaks to reporers. Sharp differences remained between congressional Republicans and the White House in talks to avert the "fiscal cliff,"  Dec. 14, 2012.
U.S. House Minority Leader Nancy Pelosi speaks to reporers. Sharp differences remained between congressional Republicans and the White House in talks to avert the "fiscal cliff," Dec. 14, 2012.
President Barack Obama and Republican congressional leaders are still searching for a compromise deficit-reduction plan in order to avoid about half a trillion dollars worth of mandatory tax increases and budget cuts that would go into effect January 1.  Some of the political realities are making it difficult to reach a compromise.

For years, Republicans have been elected to Congress vowing to fight any Democratic attempts to raise taxes.  Scores of Republican candidates have signed pledges promising voters they would resist new taxes, a key priority for many of the conservative activists and fundraisers who provide critical support to Republican candidates.

Fiscal cliff


What is the U.S. Fiscal Cliff?

  • An agreement intended to force politicians to compromise and make deals.
  • Without a deal by January 1, 2013, sharp spending cuts would hit military and social programs.
  • Tax hikes also would go into effect.
  • The combination would reduce economic activity, and could boost unemployment and push the nation back into recession.
In the ongoing negotiations to avoid the so-called ‘fiscal cliff’ of higher taxes and budget cuts, Republicans prefer to emphasize the need to cut government spending, including House Speaker John Boehner. “Washington has a spending problem that can’t be fixed with tax increases alone,” he said.

But for President Obama and his Democratic allies in Congress, their main focus is raising taxes on the wealthy in their negotiating stance with Republicans.

Public opinion polls show a majority of Americans support a tax hike on those making more than $250,000 a year, and President Obama highlighted the issue during his successful re-election campaign.

Democrats are less interested in large-scale cuts in so-called government entitlement programs like Medicare, Medicaid and Social Security.  These programs provide health care to the elderly, the poor and disabled and offer a basic pension for many Americans.

Republican demands

Some Republicans are demanding significant reforms in entitlement programs to cut costs in the long term, such as raising the age of Medicare eligibility from 65 to 67 years old.

But that is a non-starter for House Democratic leader Nancy Pelosi.

“Don’t even think about raising the Medicare [eligibility] age.  We are not throwing America’s seniors over the cliff to give a tax cut to the wealthiest people in America,” she asserted.

Enormous internal pressures are at work on both sides during the fiscal cliff negotiations.
 
A group of 140 conservative leaders signed an open letter to congressional Republicans warning them not to compromise with the president on taxes.

Morton Blackwell, president of a conservative group called the Leadership Institute, organized the effort and says those Republicans in Congress who cooperate with the president may face conservative challengers in future primary elections.

“It is not only wrong for the country, but it would be dangerous for their own political careers if they caved in and allowed President Obama progress on his agenda," Blackwell stated.  "They have the power to stop bad things from happening.”

Opposing views

The stalemate over the fiscal cliff negotiations is also a clash of vastly different views on the size and role of the central government.

Steven Smith, a political scientist at Washington University in St. Louis, Missouri, says Democrats continue to believe that government has a crucial role to play in society.

“They would like to see it at a higher level of spending and revenues so that the federal government was playing a larger role in addressing a variety of social problems.  The Republicans would like a lower level of revenues and spending so that the federal government would have a smaller role in the economy,” Smith said.

But even some Republicans say their party should heed the results from last month’s election where the president won re-election and Democrats gained seats in both the Senate and the House of Representatives.

 “It was a clear signal, as far as I am concerned, that we want our leaders, we want our government officials to work together," noted Ken Duberstein, who served as White House chief of staff under President Ronald Reagan. "To resolve the major fiscal issues and other issues.”

Optimism

Some lawmakers remain optimistic.  

“If we can demonstrate to the rest of the world that we can come together and resolve these issues through compromise, then the rest of the world’s money will end up being invested here because we are that beacon of hope,” said Democratic Congressman John Larson of Connecticut in an interview with the CSPAN public affairs TV network.

Recent polls show about two-thirds of Americans want the two sides to reach a compromise to avoid the so-called fiscal cliff that could plunge the economy back into recession.

The latest Wall Street Journal-NBC News poll found 56 percent of those surveyed would blame both sides equally if compromise efforts fail.

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