Monday, December 24, 2012

"Fiscal Cliff": Weary eyes turn toward the Senate

by Bill McBride on 12/24/2012 09:23:00 AM

From the NY Times: Search for Way Through Fiscal Impasse Turns to the Senate

Senators Kay Bailey Hutchison of Texas and Johnny Isakson of Georgia, both Republicans, implored Senate leaders to reach an accommodation with Mr. Obama when Congress returns on Thursday, even if that meant that taxes would go up for those with high incomes and that spending cuts would be put off.

“The president’s statement is right,” Mr. Isakson said Sunday on the ABC program “This Week.” “No one wants taxes to go up on the middle class."...

The truth of the matter is, if we do fall off the cliff after the president is inaugurated, he’ll come back, propose just what he proposed yesterday in leaving Washington, and we’ll end up adopting it,” Mr. Isakson continued. “But why should we put the markets in such turmoil and the people in such misunderstanding or lack of confidence? Why not go ahead and act now?”
I think Isakson is correct about what will happen in January - that Congress will approve an agreement after the tax cuts expire so they can claim they are cutting taxes. Politics is weird.

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