News / USA

    Obama, Congress Face Budget Showdown

    Cindy Saine
    Newly re-elected President Barack Obama appears to be headed toward another clash over taxes and government spending with the House of Representatives, where Republicans held on to their majority after the election and Democrats expanded their majority in the Senate. 

    In grueling negotiations on the level of government spending, taxes and how to reduce the national deficit, House Republicans have refused to consider any tax increases for anyone.  Democrats have insisted that if they agree to cuts in government programs they strongly support, Republicans need to give in and let taxes increase for the wealthiest Americans. 


    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.
    With the elections over, President Obama has invited congressional leaders to the White House to start negotiating a deal to prevent sharp tax increases and spending cuts - often referred to as the "fiscal cliff" - and says that he is open to compromise on the stubborn fiscal issues that have paralyzed Washington.  But he also made clear that Republicans are going to have accept tax increases for top earners or expect a presidential veto.

    "But, I refuse to accept any approach this is not balanced," he said.  "I am not going to ask students and seniors and middle class families to pay down the entire deficit while people like me making over $250,000 are not asked to pay a dime [10 cents] more in taxes.  I am not going to do that."

    Tax burden

    For his part, Republican House Speaker John Boehner also said he hopes productive conversations begin soon with the White house, but again drew a line at the issue of higher taxes for Americans earning the highest incomes.

    House Speaker John Boehner (R-OH)House Speaker John Boehner (R-OH)
    x
    House Speaker John Boehner (R-OH)
    House Speaker John Boehner (R-OH)
    "The Number One issue in the election was about the economy and jobs," he said. "Everyone wants to get our economy moving again, everyone wants to get more Americans back to work again.  Raising tax rates will slow down our ability to create the jobs that everyone says they want."

    On the tax issue, analysts point out that the cuts passed under former President George W. Bush are set to expire at the end of this year unless the president signs an extension, so the burden is on Republicans to seek a deal.  Ronald Brownstein, editorial director of the National Journal, says Speaker Boehner does not seem to realize that he can no longer refuse to cooperate.

    "With all due respect, it is not really his choice anymore," he said. "What is different about this environment is that the Bush tax cuts will expire and will revert to the rates under [former president Bill] Clinton for everybody unless President Obama signs an extension, and after this campaign that would be pretty shocking."

    Avoiding "fiscal cliff"

    Former U.S. secretary of agriculture and former Democratic congressman Dan Glickman says he is optimistic that Congress and the president will take action over the next 45 days to avoid going over the "fiscal cliff."

    "But since we have a reelected president, I am hopeful that they can work out some sort of a deal," he said. "I suspect that it will be a short-term deal rather than a long-term deal to get us over this imminent cliff or crisis, so that we can go into next year with a little more time to think through these things.  But that way, I think the markets will be fairly calm and there will not be people thinking the United States cannot get its act together at all."

    David Wasserman, an analyst with the Cook Political Report, says the chances are better for the current Congress to tackle budget challenges than the newly-elected Congress, which he says is likely to be even more polarized, and with even fewer members who call themselves moderates.

    "I have been warning people that it is going to be harder to get something big passed when Congress is sworn in in January than it is in these next 45 days, because we have so many people who do have an incentive to reach across the aisle who are leaving after January," he said.

    Sequestration threat

    Analysts point out that the president and Congress also agreed more than a year ago on a mechanism known as sequestration - severe across the board cuts on government programs, including defense spending.  They would automatically take effect in January 2013 unless the Democratic-controlled Senate and the Republican-controlled House reach an agreement on taxes and spending. 

    Neither Democrats nor Republicans wants those dramatic spending cuts, so that may give them the incentive they need to try to find common ground with President Obama when they are meeting with him at the White House.

    You May Like

    In Britain, The Sun Still Doesn’t Shine

    Invoking Spitfires and Merlin, Leave voters insist country can be great again, following surprising 'Brexit' vote last week

    Double Wave of Suicide Bombings Puts Lebanon, Refugees on Edge

    Following suicide bombings in Christian town of Al-Qaa, on Lebanon's northeast border with Syria, fears of further bombings have risen

    US Senators Warned on Zika After Failing to Pass Funding

    Zika threats and challenges, as well as issues of contraception and vaccines, spelled out as lawmakers point fingers

    This forum has been closed.
    Comment Sorting
    Comments
         
    by: Anonymous
    November 13, 2012 12:09 PM
    I need the compromise measure to bolster the economy !!!to avoid the meltdown.

    by: Brandt Hardin
    November 12, 2012 8:45 PM
    Will we ever see bipartisan politics in our country again? The fringe element within the Republican Party has pushed them all to the far right of the isle where they’ve gridlocked our government for two years now. Will the next two be any different? They’ve been very public about their main goal being to block and bamboozle the President’s every move. It takes many hands to paint the Blackface on Obama. See my visual report of his makeup session at http://dregstudiosart.blogspot.com/2012/10/bamboozling-obama.html

    by: Anonymous
    November 12, 2012 2:53 PM
    increase income and deduct spending, helpful to U.S.

    by: Mike_LV from: Las Vegas
    November 12, 2012 11:14 AM
    Well at least if Congress does the usual...i.e. nothing, at least we'll have some plan for deficit reduction. Even if it sends us back to recession, we'll be spending less right?

    Featured Videos

    Your JavaScript is turned off or you have an old version of Adobe's Flash Player. Get the latest Flash player.
    Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeasti
    X
    June 29, 2016 6:15 PM
    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video Slow Rebuilding Amid Boko Haram Destruction in Nigeria’s Northeast

    Military operations have chased Boko Haram out of towns and cities in Nigeria’s northeast since early last year. But it is only recently that people have begun returning to their homes in Adamawa state, near the border with Cameroon, to try to rebuild their lives. For VOA, Chris Stein traveled to the area and has this report.
    Video

    Video Clinton Leads Trump, But Many Voters Don't Like Either

    In the U.S. presidential race, most recent polls show Democrat Hillary Clinton with a steady lead over Republican Donald Trump as both presumptive party nominees prepare for their party conventions next month. Trump’s disapproval ratings have risen in some recent surveys, but Clinton also suffers from high negative ratings, suggesting both candidates have a lot of work to do to improve their images before the November election. VOA National correspondent Jim Malone has more from Washington.
    Video

    Video New US Ambassador to Somalia Faces Heavy Challenges

    The new U.S. envoy to Somalia, who was sworn into office Monday, will be the first American ambassador to that nation in 25 years. He will take up his post as Somalia faces a number of crucial issues, including insecurity, an upcoming election, and the potential closure of the Dadaab refugee camp in Kenya. VOA’s Jill Craig asked Somalis living in Kenya’s capital city Nairobi how they feel about the U.S. finally installing a new ambassador.
    Video

    Video At National Zoo, Captivating Animal Sculptures Illustrate Tragedy of Ocean Pollution

    The National Zoo in Washington, D.C., is home to about 1,800 animals, representing 300 species. But throughout the summer, visitors can also see other kinds of creatures there. They are larger-than-life animal sculptures that speak volumes about a global issue — the massive plastic pollution in our oceans. VOA's June Soh takes us to the zoo's special exhibit, called Washed Ashore: Art to Save the Sea.
    Video

    Video Baghdad Bikers Defy War with a Roar

    Baghdad is a city of contradictions. War is a constant. Explosions and kidnappings are part of daily life. But the Iraqi capital remains a thriving city, even if a little beat up. VOA's Sharon Behn reports on how some in Baghdad are defying the stereotype of a nation at war by pursuing a lifestyle known for its iconic symbols of rebellion: motorbikes, leather jackets and roaring engines.
    Video

    Video Melting Pot of Immigrants Working to Restore US Capitol Dome

    The American Iron Works company is one of the firms working to renovate the iconic U.S. Capitol Dome. The company employs immigrants of many different cultural and national backgrounds. VOA’s Arman Tarjimanyan has more.
    Video

    Video Testing Bamboo as Building Material

    For thousands of years various species of bamboo - one of the world's most versatile plants - have been used for diverse purposes ranging from food and medicine to textiles and construction. But its use on a large scale is hampered because it's not manufactured to specific standards but grown in the ground. A University of Pittsburgh professor is on track to changing that. VOA’s George Putic reports.
    Video

    Video Orphanage in Iraqi City Houses Kids Who Lost their Parents to Attacks by IS

    An orphanage in Iraqi Kurdistan has become home to scores of Yazidi children who lost their parents after Islamic State militants took over Sinjar in Iraq’s Nineveh Province in 2014. Iraqi Kurdish forces backed by the U.S. airstrikes have since recaptured Sinjar but the need for the care provided by the orphanage continues. VOA’s Kawa Omar filed this report narrated by Rob Raffaele.
    Video

    Video Re-Opening Old Wounds in a Bullet-Riddled Cultural Landmark

    A cultural landmark before Lebanon’s civil war transformed it into a nest of snipers, Beirut’s ‘Yellow House’ is once again set to play a crucial role in the city.  Built in a neo-Ottoman style in the 1920s, in September it is set to be re-opened as a ‘memory museum’ - its bullet-riddled walls and bunkered positions overlooking the city’s notorious ‘Green Line’ maintained for posterity. John Owens reports from Beirut.
    Video

    Video Brexit Resounds in US Presidential Contest

    Britain’s decision to leave the European Union is resounding in America’s presidential race. As VOA’s Michael Bowman reports, Republican presumptive nominee Donald Trump sees Britain’s move as an affirmation of his campaign’s core messages, while Democrat Hillary Clinton sees the episode as further evidence that Trump is unfit to be president.
    Video

    Video NASA Juno Spacecraft, Nearing Jupiter, to Shed Light on Gas Giant

    After a five-year journey, the spacecraft Juno is nearing its destination, the giant planet Jupiter, where it will enter orbit and start sending data back July 4th. As Mike O'Sullivan reports from Pasadena, California, the craft will pierce the veil of Jupiter's dense cloud cover to reveal its mysteries.
    Video

    Video Orlando Shooting Changes Debate on Gun Control

    It’s been nearly two weeks since the largest mass shooting ever in the United States. Despite public calls for tighter gun control laws, Congress is at an impasse. Democratic lawmakers resorted to a 1960s civil rights tactic to portray their frustration. VOA’s Carolyn Presutti explains how the Orlando, Florida shooting is changing the debate.

    Special Report

    Adrift The Invisible African Diaspora