U.S. Congress pushing 'fiscal cliff' battle to limit
Final outcome on budget might not be determined until Nov. 6 election
CBC News
Posted: Sep 11, 2012 11:29 PM ET
Last Updated: Sep 12, 2012 12:41 AM ET
In a rare moment of unanimity, U.S. House Speaker John Boehner, left, and Senate Majority Leader Harry Reid share a quiet moment during a 9/11 remembrance ceremony on Capitol Hill on Tuesday. (Alex Brandon/Associated Press)
Can the U.S. Congress reach a budget deal and avoid another downgrading of America's debt rating in the new year?
It depends on whom you ask.
House Speaker John Boehner said Tuesday he's pessimistic Congress can reach a deal, while Senate Majority Leader Harry Reid was far more hopeful that "some kind of agreement" would be reached after the elections.
Asked at a Capitol Hill news conference how confident he was that negotiations would prevent the government from hitting the so-called fiscal cliff — an economy-rattling set of across-the-board spending cuts and higher taxes caused by the expiration of Bush-era tax cuts that are set to hit in January — Boehner's reply was terse.
"I'm not confident at all," the Ohio Republican said, while reminding reporters the House has passed legislation to both avoid the automatic, across-the-board cuts next year and to renew the Bush era tax cuts for one year as well. Republicans warned of the impact of the impending cuts on the military and implored Senate Democrats to act to avoid them.
"I'm hopeful we will reach some kind of agreement," countered Reid, a Nevada Democrat, suggesting the results of the election will weaken the GOP's resolve to block tax increases on wealthier earners and that Republicans will be more willing to compromise. "I believe that once the elections are over, the tea party's strength will be significantly weakened."
The Senate has deadlocked over taxes and failed to address the across-the-board cuts, known as a sequester in Washington parlance.
A year ago, Moody's cut its outlook on U.S. debt to "negative," a warning it might downgrade the rating, after partisan wrangling over raising the U.S. debt limit led the nation to the brink of default. Yesterday, Moody's said it would likely cut its "Aaa" rating on U.S. government debt, probably by one notch, if budget negotiations fail.
Rival agency Standard & Poor's made that move a year ago.
"Listen, the House has done its job, both on the sequester and the looming debt fights that'll cost our economy some 700,000 jobs," Boehner said. "On both of these, where's the president, where's the leadership?"
Obama has called for replacing the sequester with a combination of tax hikes and cuts elsewhere in the budget. However, Republicans have repeatedly rejected his call for higher taxes on upper-bracket earners.
Any real negotiations on avoiding the combination of fiscal austerity are not expected until after the November elections — and the outcome of the vote is sure to play a huge role in how the issue plays out in a post-election lame-duck congressional session.
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