No doubt, you’ve been hearing a lot about the “fiscal cliff” that we’re perilously close to going over. On January 1, a number of tax increases and spending cuts will go into effect if this very divided federal government doesn’t reach a compromise. Faith in their ability to reach a resolution is low, which is impacting stock prices today and has been a factor for many business decision makers for months.
“Failure to reach a deal means tax increases and deep spending cuts take effect in five weeks — the fiscal cliff scenario that analysts fear could push the country back into recession,” says CNN.
The plan President Obama proposes would extend the Bush tax cuts for the middle class while ending them for people making $250,000 and more. This infographic lays out who would be affected by the tax increase and who wouldn’t. (Those who wouldn’t include individuals making less than this amount and “97 percent” of small businesses.) The My2K hashtag refers to the $2,200 that middle class taxes would increase should we actually fall off this metaphorical cliff. The White House has also been pushing their proposal hard on their Twitter account, with videos and other media included, and on this website.
Of course, others who reject the President’s plan have also used the hashtag to make their point of view known.
President Obama is also meeting with small business owners, chief executives at corporations, and middle class Americans today.
The Republicans, of course, aren’t taking this lying down. They’re also planning a number of events in Washington, with small business owners and corporate bigwigs, and in their home states, telling everyone who will listen that the White House plan will cost jobs. They say there should be no tax increases for anyone and want to reduce the size of government. They’re also in favor of spending cuts and entitlement reforms, a break with a pledge that many Republicans made with Grover Norquist, an anti-tax activist who founded Americans for Tax Reform.
“This is the public relations phase of the latest fiscal showdown in Washington, where direct engagement is no longer viewed as the optimal route to reaching a deal. As Wall Street shudders and Congress once again risks looking feckless in the face of crisis, both sides are locked in a battle to win over key interest groups — and the public,” writes Politico. The website notes that President Obama and House Speaker John Boehner (R-OH) haven’t met face-to-face in a while to discuss a compromise. Many believe they should meet, and meet often, in the coming days. But previous meetings over other issues yielded little. So the President seems to be opting for another strategy this time around.
A final compromise has to be reached in 33 days.