By Fareed Zakaria
Talking about the fiscal cliff involves guesswork at this point, but here is my guess. There will be a deal before the end of the year, when spending cuts and tax rises are scheduled to kick in. But will we get a small deal that simply gets us through the immediate crisis, or will there be a grand bargain?
The outlines of an eventual deal are pretty obvious – there will be some increase in tax rates as well as some closing of deductions and loopholes because, the rate increases being discussed don’t get you enough revenue. And in return for this, there will be some spending cuts or, more likely, restraints placed on future spending. For a grand bargain, you would need major tax reform and major entitlement reform. Neither is likely. So we’re likely to get some patchwork solution that will be enough to stave off a crisis.
How to get there? Republicans should give in on the tax hikes and focus on the issue of what kind of spending cuts they would like to see, and how real these cuts would actually be in practice. Democrats should make sure they get the tax hikes and try to shape the spending cuts so that they are neither immediate nor do they hit the poor too hard.
More from CNN: Forget the cliff, economy is rebounding
Who will win? Right now, it seems to me that President Obama is in the more powerful position and has been playing his hand with a kind of toughness born of the lessons he has learned over the last four years. He’s refusing to negotiate with himself, refusing to produce his own compromises before offering them to the Republicans, and he is forcing the Republicans to provide some specifics.
This is ultimately a matter of numbers, and there is a way to split the difference so that the two sides can meet somewhere in the middle. But I think it will be closer to the president’s side of the spectrum than the Republicans’. Elections have consequences.
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Tell Boehner to munch on your 8====>
Its always good to read a Zakaria. His comments are so fun to read, not sure why he is not working for SNL, but CNN does need some humor.
Last year there was the bipartisan brinkmanship over debt ceiling. This year the fiscal cliff. No doubt this kind of scenarios wil repeat itself. The two parties play by ear and improvise. Drastic changes, like tax reform and other fundamental programmes are swept under the carpet.
8==> to be precise.
Why are you jealous of the 2%?
I know why I am, because the one or two percent can buy Congressmen and even a President once in a while that let them pay a lower tax rate than those of us that actually turn out goods or perform services.
Hold your ground Mr john boehner
This only works next year for republicans but not this year since this would be a tax cut next year. They don't have a way out if they agree with the president this year. Let's be honest. Running against President works and it did work for many house republicans. It didn't work for romney, todd akin, murdoch because they put foot in their mouth. So, I don't see how they could get any deal. Only thing they can do compassionately is extend unemployment tax because people lost jobs with no fault of their own. And there are not millions jobs out there
thing to do is get the millions of jobs out there... how will doubling the tax from 800 billion to 1600 billion with this deal and the doubling of taxes with Obamacare (both in January) help create jobs?
There are two factors at play here, not just jobs. There is also the budget. The tax increases are to get us closer to balancing the budget, not to increase hiring. The tax rate has actually very little to do with hiring. Hiring increases due to increased demand for products, not due to the tax rate. If the middle class keeps growing and spending more, the economy will continue to improve, regardless of the tax rate.
I don't know why u brought up obamacare. Anyway all I was saying that it's entirely impossible to put millions of people out of work into job right now. Mcconnel, president or politicians most cited ceo jamie dimon can't do it. 542000 people left job market last month. So unemployment extension is necessary. Anything else is not necessary because taxes do need to go up and govt. can't continue fuding useless defense programs or social programs. They have to fund program that's useful and create sustainable future jobs. There's no point saving useless jobs, programs for few extrea years.
Skarphace – the tax increases plus closing loopholes and deductions will only net a maximum of $100 billion and thats being very liberal with the numbers. Obama has had trillion dollar deficits every year he's been in office so Im not seeing how increasing our revenue by 10% of the deficit is going to make any difference. The fact remains that we cant spend our way out of this recession. The new stimulus package is a big fat joke since all previous have done nothing but waste tax payer money and increasing taxes on the wealthy will only cause them to stop pumping money into the economy and halt job creation. The 2% create jobs, and we need to stop attacking them. Obama is a joke.
Obama wanted $800 billion in new spending, now demands double that at $1.6 trillion. He said raising taxes would hurt the fragile economy, but now demands increases. He said that limiting deductions would hurt charitable giving that helps those who need help the most (his unemployed) but now wants that too. I say no deal and lay the blame where it belongs – at Obama's feet.
How come Republicans never say anything based on fact. Wait, if they dealt with the truth and facts they would not have anything to argue. Yes we need a stimulus package and that is apart of Obama's deal. No one is demanding a tax increase. What is being requested is the end of a tax break that was supposed to stimulate the economy and did the exact opposite of what it was created to do. So let me get this right. In a country where there are not enough jobs for people to work and most with education still cannot provide for their families. We need to blame the poor people which of whom have grown at historic rates under these failed Repulican policies (tax break). The people who are put in this position mainly because of the Republicans are to be the blame of the republicans. Makes sense when you look at how the Replicans represent themselve (embarrassing), but it is completely illogical if you are expecting any common sense, honesty and decency from our so called leaders. His unemployed means what exactly? Are you saying he created (his fault they are unemployed) the unemployed or are you saying the unemployed are all black like him.
Why do you complain about him spending when his spending was to boost the economy to create jobs. Then you turn around and want to blame the people without jobs in a country that does not have enough jobs for its people. So lets add up what we have so far. Lets not fix the economy even though it is broke. Then let the poor people who are unemployed thanks to the job musical chairs the rebups got America playing die because we can't afford them. Very patriotic. So lets continue to let the people profitting by destoying jobs continue to profit at records rate. Then lets let all of the people who lost their job starve and die. The republican dream.
So let me just say this is very American of you. Sir, you are a true patriot the way you blame the poor people with no option or excape from the situation they are in. A situation the Repubs have just as much responsiblity for them being unemployed as the unemployed have. Lets blame the poor people for being poor. We only have poor people because of Obama, right.
What blame are you laying at his feet exactly. The blame of our credit rating? Last I checked someone said they had 98% percent of what they wanted and decided to hold out because they could do better. Now that same person is claiming we still do not have a budget because the president will not comprimise. It is funny how everyone knows the Repulicans lie about everything. They lie some much right now they do not even have a valid arguement on anything relating to today's America. The problem is with him being the first BP. The first thing the Repubs said after he got elected was they are going to make things worst for Americans hoping they would blame the President not so he would not get a second term but to scare America into never voting another BP period. Thank you America for not falling for the okie doke and seeing through the Repubs bull.
Republicans, you can no longer project and reflect so much negativity and expect to see positive results. Or maybe you can, lol.
What – ummmm you forget that the first stimulus didnt actually help the economy. Our debt has EXPLODED under Obama and you liberal Dems are living in fantasy land. Job growth is stagnant, GDP growth is stagnant, high unemployment that only goes down because ppl STOP looking for work. We cant keep throwing money around. We cant keep attacking the wealthy who, ya know, actually create jobs ppl need. Obama is the king of the 3 card fiscal monty. He is a joke and so are you.
Republicans had their chance at a better deal with less increases in tax revenue and more spending. In fact, they had a chance at a deal with 4-1 spending cuts vs revenue increases.
They shot that deal down because they felt they could position themselves, by taking over the Presidency and the Senate, to get a much better deal where tax revenues would actually decrease and spending would be cut drastically due to the privatization of Social Security and Medicare.
This plan backfired and now they are in the position where they will be lucky to get a deal with 1-1 spending cuts vs revenue increases. Republicans made their beds, now they have to lie in them.
That about sums it up. Good work!
Wow! What a dream – do you live in CO or WA? Or perhaps have a medical use card? I'm surprised you didn't work Bush, Haliburton and the tri-lateral commission into it somehow.
Why are you jealous of the 2%?
Revenue increases and spending increases are two different things. We have to increase revenue by at least 50% just to pay for what Congress has already authorized in expenditures. Additional revenue, without increased spending, reduces the deficit. Additional spending without increased revenue, increases the deficit and debt.
A mix of increased revenue and spending is something in between.
If you look up "The Transaction Tax (not the financial transaction tax)" or "Automatic Payment Transaction Tax" you can see how to increase revenue to cover expenses while lowering tax rates dramatically. It replaces all other Federal taxes.
Baggers and birthers can be rounded up in box cars and old, abandoned airplane hangars can be used to temporarily house them while they await mass sterilization and lobotomies.
typical liberal.... only think my way... and that way has increased the debt 50% in 4 years
More than have of that increase in the debt was due to three factors: 1) the interest on the existing debt, 2) the spending on the two Bush wars, and 3) the tax revenue lost due to the Bush tax breaks which should have expired in 2008.
*half*
Typical liberal, yes, in two ways. The first, as paraphrase of Buckley: Liberals don't mind if you have have an opinion as long as it is the same as theirs and second preaching benevolence to the world while spewing hatred of non-liberals. Typical liberal, yes. Ignorant sycophants.
@ Reality Check... You lost. Get over it and gat back in your trailer. Nascar's on and you won't want to miss that now, will you.
@Reality check, talk about people with psychological problems and can't fix them,republicans are the leaders in that category.Republicans backed in a political corner still delushional thinking this president has to agree on anything of theirs is hilarious..They'll be gone in two years with midterms nitwit and if we do go over the cliff you republicans will be held responsible because you had your chance in 2011 with a deal between Boehner ,Pres.Obama and as usual you ignorents blew your wad,no more leverage either its find as well..The president has four years ,your reps have two if they get that far..Better luck next time !!
skarphace – we only spent 680 billion on the wars so not sure why you think that has made a huge impact on the economy. You also cant increase the principle by accruing the interest. The debt never goes down because we dont pay the principle, just the interest. Do you really think the debt went up 6 trillion so far under Obama because of interest, wars and tax breaks that actually helped American families? What are you smoking?
I groan when politicians talk about closing tax "loopholes". Loopholes, that is, like the home mortgage deduction. Those people in Congress, and in the White House, are shamefully untruthful.
you are correct sir
I say let the cliff happen and introduce bills to cut taxes for most people and increase military spending
I am one of the people facing the cut off of unemployment benefits. I just now began my first extension and am going to lose everything if Congress does not get their act together. I am not quite at the age I can retire, but I am old enough where employers are not hiring people my age. I worked for one of those small businesses and the family decided to put their unskilled daughter in my position and let me go last February. I have religiously applied for work in my area including minimum wage jobs. Without my unemployment I will lose my home within 6 months because I have already used my savings and 401k in order to make my house payment and utility payments plus eat. I have worked steadily since I was 14 with the exception of 2 months beginning in Jan. 2009. I have owned this home for 8 years and my mortgage was not one of those risky bank loans, plus currently my home value has plunged by over 50%. I just want Congress to stop working on the word Lunatic and begin to comprimise on the Fiscal Cliff. I keep hoping that common sense and the importance of this issue will prevail and they will get busy!
And yet in the eyes of the ideological nutjobs who comment here, you are a parasite. Fortunately GOP legislators are beginning to see the need to detach themselves from the "no-cost" extremist haters who rant here. Elections have consequences.
Go to google and create a gmail account.
with that email account, create a google voice account. You can tell it which real world phone it should direct calls to (your personal cell phone or home phone for example)
Next, post back here – or anywhere for that matter with your situation and your newly created cell phone number
you may get a lot of idiots calling, but you can click and ban that number forever by identifying such callers as SPAM
You may well meet an employer looking to hire a seasoned worker than a clueless living with their mother child.
all the best!
if you find someone has not hired you because of age, you can go to the national labor board and file a complaint.
They never indicate it is your age and you have no way of showing that is the issue. Companies rarely interview people that are only a few years from retirement as they want to fill the position that will be there for longer than think think a person between 60-66 would stay. However the unemployment benefits are much to long. You have 6 months of state then 99 weeks of federal which is ridiculous. I fell into that position and was out of work for six months but I was fortunate that a previous boss had a position open up and wanted me as he knew the kind of worker I was and that I would be a good addition to the company. I did think the extentions for federal benefits was too long and that people would take advantage.
Well said Ron!*
* No, not really, I think you are an idiot.
Tax the church's that rake in billions every year. The money just finds it's way into the pocket's of all those con-artist's anyway.
Your command over the English language and comments on issues of concern are of a quality that sets standards in journalism. I am surprised by the construction of a sentence in the fourth paragraph of your post. To write that "Right now it seems to me that President Obama is in the more powerful position..." is slightly jarring due to the word "the" in the sentence. It could be grammatically correct but not so in the entire flow of your post that generally flows like a silent stream. Regards.
GOP are beating a dead horse trying to reinstate the Dubya tax cuts that they helped create with their BS story about how they would create more US jobs. Moderate conservatives left GOP & voted as Independents in great #s during the 2008 POTUS election & in even greater #s in 2012. The only ones left that still want tax cuts for the 1% are the 1% & the Jesus Crispies. Unless all of GOP in congress have a gig waiting for them @ FOX they should beware the wrath of the Amer People come 2014 cause it aint gonna be pretty!!!
you mean beating a dead donkey
The only thing that will create jobs here in the U.S. ?? Stop the job outsourcing, duh...Triple the tariffs on goods coming to the U.S...make it impossible for American businesses to keep the jobs in China and other countries.. But we must also stop the cheap labor from coming to the U.S. So low income American citizens can get a job at living wages.
If we stop job outsourcing and keep the jobs here in the U.S. ?? It won't do any good if corporations and businesses continue to hire illegals ..
It is a good thing the President does not have the final say in how to approach the American economy. Checks, balances, and the like.
Actually the veto pen and a veto-override-proof Senate DO give him the 'final say" in that rate increases and sequestration cuts DO take effect unless he signs on to alternatives.
The Prez holds the high cards.
If the GOP forces a debt ceiling default, or even a serious threat of one, the Dems will eviscerate them.
Independent voters are fed up with GOP dramatics and would make them pay big time in 2014 if they keep it up.
Boehner knows that, but he is between a rock and a Speakership defeat. He can pay now or pay later, but he and the GOP WILL PAY.
The changing demography of the electorate will only make it worse for the GOP unless they start thinking "general election" rather than "primary challenge fear."
Zakaria wants exactly what the Democrats want....raise taxes right now but don't cut spending ever. How in the heck did we get in this mess? Spending increased and taxes decreased because of a shrinking economy. This has amounted to 5 trillion in new debt....and Obama/Zakaria wants four more years of the same....and another 5 trillion in debt. Sounds like "fools" to me.
Problems are many, but one is 30 million jobs outsourced to china and other countries..That is 30 million people not working and paying taxes..In the mean time the politicians did not cut spending to make up for the job loses..
Larry, how come you confederates never saying anything relating to the truth. I quess since you seen Romney tell almost 500 lies during his campaign you assume in order to be repub you have to repeat and support the confederate lies. Well congratulation I am sure mom, dad and grandparents are happy you are continuing the confederate legacy and heritage of lies and bigotry. You obviously feel you have to support the confederates in order to be true to your culture and this makes you patriotic.
Lol
Thats right What, Romney said "500 lies" you cant be specific about and Obama is a friggin saint. So very very sad. Obama has no idea how to fix the economy and thats very clear so I say, let him run this country over the cliff. The repubs should just back off and let him own this mess once and for all so I dont have to listen to his and your excuses anymore. Imagine if you failed at your job then said "its not my fault, it was the guy before me!!". I wonder how your boss would feel about that LOL. Obama seems to get a pass on everything for some reason. Stagnant job growth, stagnant GDP growth, high unemployment, massive debt and spending with no oversight and Obama's solution is to increase taxes on the ppl who invest their money in creating jobs???? Let Obama own this mess!!!!
Im glad I serve A higher authority and dont have to worry about any of this crap ! we need divine intervention- this planet is out of control >>> the sooner we all die the better -- that will be the final answer and call --
I agree with you. The world is doomed in my opinion...Over crowded-few jobs-No population controls like in China..We have poor people having 3 to 6 kids that they can't afford to support, so they end up on welfare. There is no control–no discipline like in China.
Have you been to China??? Yeah there's discipline, if you do something wrong, the military takes you away for a year or two. If you speak up against the government, yup, you disappear for 6 months or so. Want a job? Ok, here's one where you work 12 hrs a day for 6 days a week (or more), for about $0.85 an hr. Get hit by a car, ok, here's $20 before they drive away. Ever seen a cooked dog on the back of a motorcycle?? Yep I have. If you want to go to China, I'm sure they'd love to have you.
The deal will be the same as all before it. The taxes will go up, and the spending cuts will be worked out later (never).
Given the deficit spending that we have we need increased taxes and spending cuts. Everybody says we need to cut out programs but just don't cut mine as it is too important. Why does everyone think that the TEMPORARY Bush Tax Cuts should be PERMANENT. We can not afford it. These cuts reduced taxes on capital gains and dividends to 15% down from 20%. Those cuts basically benefitted the rich. When Rommey's tax returns showed he paid a third less percentage wise then middle class it shows the tax code needs reform. Yes he paid a lot of taxes but percentage wise it was very low and could have been much lower if he had taken the other 2.3M deduction he could have taken. Of course he has probably done an amended return by now. We need to go to a flat rate with no deductions which the special interest groups would fight to prevent. I said to my wife in 2001 we would be better off if we didn't change the tax rate and instead paid down on the debt. Then when the debt was paid off we could reduce the taxes by 31% as that was the amount needed then to pay the interest on the debt. Now it is up to like 41% and getting worse. We need inceased revenue and spending cuts both as this is the only way out of this situation.
The taxes we have ALL start out as 'flat taxes', however, Govt has a need to "encourage certain good things", hence "tax free status for breast feeding tools and supplies" and the like.
Soon, other groups get their own extensions and exceptions carved into the tax code- Mortgage interest deductions (to encourage home ownership) and the like.
Soon, the Tax code is a tangled web of disparate and preferential treatment.
It cant work...and it doesn't !
Do whatever you like, but fix our failing infrastructure!
I don't see how a party that suffered a significant loss in the election, can expect to establish their own policy priorities economically. I would expect to negotiate. I used to teach 6th graders about propaganda. I wish I were still teaching. My sixth graders knew more about how to avoid informational spin than many on the list. Do we not teach critical thinking any longer?
s
Sadly they could have gotten all this worked out in February of 2012. They just wanted to make it a political game. Then we helped out by electing the same bunch in November. We the people – will NEVER learn.
Instead of a "grand bargain" from congress the middle class will get "the blue light special"
The GOP are used as WMD's for the rich only.
This whole cliff exercise is a joke. When you look out more than a few years, we are facing a gigantic fiscal hole. We need more revenue than Obama is asking for and more cuts than the Republicans want.
Does it bother anyone that Obama is willing to hurt 98% of us because of jealousy over 2%?
The Bush tax cuts applied to everyone. Why is Obama being unfair and harming most of us?
@ObamasIsMistake,do you want him to give in because of your ignorence,please explain!!He's been willing since his inaugeration to be bipartisan and when he has his hand out to shake republicans simply slap it away...If we keep Bushs tax cuts up you can kiss your country good bye economicly because with more government spending than revenues we'll never survive,get it!!Red states are a perfect example with giving federal government $1 in revenues and getting back $2 for state programs: welfare,food stamps,Medicaid and others so don't preach something you obviously know nothing about...If republicans got their heads out of their butts once in a while and worked for the people instead of reps like Cantor worrying about how much he'll work next year something might get done ,wouldn't you think for 175 grand a year plus bennies...Think about that next time you complain about problems with government because its been republicans that have caused this mess.Now fix it or get out!!
There will be no deal.......indeed there can be no deal.
The divide is too great.
It never ceases to amaze me how the Republicans react. They LOST this race, yet they continue to strut around like they are in power. You LOST the Presidency, most of the US citizens did NOT want you in power so they elected someone else!!
YOU LOST. YOU are NOT in power. Come backdown to reality!!
Ummm toronto girl, what exactly do you know about American power? Republicans still control the House and almost half the senate. Obama barely got the popular vote. What you want is an authoritarian society where the ONE person who won the race gets to make all the decisions. It doesnt work that way in American and it doesnt even work that way in Canada. Maybe you need to go back to school. Pathetic
Republican congressmen hands are tied, they have all signed a pledge never to agree on taxing the rich.
Why did they do that?
Well, Mitt Romney's presidential campaigning expenses of US2 billion were mostly donated by America's 1% rich and wealthy Americans. Billionaire (or is it millionaire now) Donald Trump is one of the strong advocates for the Republicans.
Fiscal Cliff reality check. The talk of the town is saving $2 trillion over 10 years ? At the current rate we just about create that much debt in ONE YEAR. What about the $16 trillion debt ?How will that ever be paid ? I did not want to be vulgar and mention the $85 trillion debt due to unfunded liabilities which equal about 5X the GDP. Why the big picture always seems so fuzzy ?
I really do not want to bust everybody's optimistic bubble by stating that UNLESS the offshored jobs return from India and China all we can do is just whistle dixie-job creation will be a myth. For the sake of reality check, I felt , I had to mention it.
Fareed is a cut, copy and paste journalist usually from other people's writings
Small club from São Paulo? Keep up with the economic articles, ok? 2x FIFA world club champions! Eat your words mr. Zakaria. Vai Corinthians!
4% UNEMPLOYMENT BY SWITCHING TO NATURAL GAS 40000 JOBS , NO FOREIGN OIL AND INCOME TO PAY OFF DEBT ,, JUST TO SIMPLE
NEXT CITY TO FALL DETROIT ,WILL BE IN BANKRUPTCY IN 3 MONTHS, ALONG WITH OTHER CITIES , THEN CALIFORNIA , GET READY FOR DEFLATION NOT INFLATION , BECAUSE PEOPLE DONT HAVE JOBS, 10,000 BABY BOOMERS A MONTH GOING FROM PAYING TAXES TO GETTING CHECKS AND BEING CHEAP, SMALLER HOUSE , NO KIDS
DEFLATION AND STOCKS AND OIL WILL FALL OFF OF THE HIGH RIDE IN 2 MONTHS , WILL FALL FARTHER THAN LAST RECESSION , GET READY FOR DEFLATION. THE GOVT WILL DO NOTHING BUT SPEND OIL RESERVE MONEY ON ITSELF AND SEND MONEY TO OTHER COUNTRIES
HOUSING PRICES WILL NOT RISE , NO JOBS TO SUPPORT PAYMENTS , HIGHER PRICES ARE BECAUSE THE STRESSED ,MONEY IN THE BANK PERSON , JUST RAN OUT OF UNEMPLOYMENT CHECKS AND OWES 300 ON A 250 K HOUSE , ITS NOW REACHING THE HIGHER PAY SCALE HOME OWNER WHO HAS TO SELL
Here is another reason not to have the Keyston pipeline
this is from the "Christian Science Monitor" August 9, 2006
In recent years, about 500 oil spills have occurred in the Prudhoe Bay oil fields and along the 800-mile pipeline each year, according to the Alaska Department of Environmental Conservation, even though the daily "throughput" of oil has declined from about 2 million barrels a day in 1987 to less than half that today. Most leaks are minor, quickly detected, and remedied.
But in March, the largest leak in North Slope production history – as many as 267,000 gallons – poured out of a corroded pipeline at the Prudhoe Bay complex for five days before being discovered. Since then, US EPA investigators have been seeking to determine whether BP violated the federal Clean Water Act by failing to prevent corrosion in the ruptured line. If it did, criminal charges could follow.