Saturday, December 1, 2012

Point by Point Guide to the Fiscal Cliff: Obama vs. House Republicans


From The Fiscal Times a point by point guide to Barack Obama's desires, House Republicans desires and where there are sticking points between the two concerning the fiscal cliff facing the United States.


Fiscal Cliff Guide

President Obama
House Republicans
Income Taxes
1) Before the Bush-era tax rates expire next year, extend them for those earning less than $250,000. 2) Increase taxes by $1.6 trillion over 10 years. Additional revenue comes from the higher rates and capping deductions for the wealthy.
1)Approve all Bush-era rates for another year. 2) Overhaul tax code to close deductions and lower rates. Simpler tax code increases economic growth, creating new revenues.

Sticking Point:
Republicans oppose higher tax rates.
Sticking Point:
Dems say the economic growth projections and savings from deductions are unrealistic.
Budget Sequester
Avoid the $109 billion in automatic cuts for 2013 with a new agreement. Make the cuts targeted, rather than based on across-the-board percentages for defense and domestic programs.
In September, passed a bill that required Obama to find an alternative to the sequester's $55 billion in defense cuts. The Democratic-majority Senate blocked it.

Sticking Point:
This possibly requires a complicated "grand bargain."
Sticking Point:
Dems are against deeper cuts to education and other social spending, if rest of budget is untouched.
Medicare & Medicaid
Reduce entitlement spending by $400 billion over 10 years, according to POLITICO. White House budget proposal contained $364 billion in Medicare savings, 42 percent would come from paying less for drugs for low-income recipients. The Simpson-Bowles plan listed $330 billion in potential cuts, a third of which comes from greater out-of-pocket costs for beneficiaries.
White House claims the GOP has yet to offer specifics, while Speaker Boehner says the Democrats should present their ideas first. The 2013 House budget would turn Medicare into a voucher-style program for Americans younger than 55 and eventually raise the eligibility age to 67. But CBO estimates show the real savings wouldn't start until after 2023.

Sticking Point:
Entitlements are sacred within Democratic circles.
Sticking Point:
GOP doesn't want to be accused by seniors of cutting a popular entitlement.
Social Security
White House insists that's off the table in fiscal cliff discussions.
Reportedly want reforms to the retiree entitlement that's on its way to being insolvent by 2033.

Sticking Point:
Potentially upsetting seniors before the 2014 campaign is a terrible election strategy.
Sticking Point:
The fiscal cliff is already hard enough..
Debt Ceiling
Top Dems don't want to frantically negotiate on the fiscal cliff, only to then have to start bargaining again with the GOP over raising the $16.4 trillion debt ceiling. The White House wants Congress to relinquish its control over the borrowing limit as part of a package deal.
Boehner will extend the borrowing limit by a sum equal to long-term spending reductions. It's possible to keep Obama on a leash by raising the limit in monthly increments.

Sticking Point:
This is the GOP trump card.
Sticking Point:
The country risks a catastrophic default that undermines any economic bounce from deficit reduction.
"Doc" Fix
No dispute! Both sides want to suspend the cuts in Medicare physician payments.
No dispute! Both sides want to suspend the cuts in Medicare physician payments.

Sticking Point:
Do they have to resolve everything else first?
Sticking Point:
Do they have to resolve everything else first?
AMT & Other Tax Credits
No dispute! Both sides want to patch the Alternative Minimum Tax for inflation so it doesn't hit families making $74,450.
No dispute! Both sides want to patch the Alternative Minimum Tax for inflation so it doesn't hit families making $74,450.

Sticking Point:
Do they have to resolve everything else first?
Sticking Point:
Do they have to resolve everything else first?
Defense
The military is about 20 percent of the $3.7 trillion budget. Obama wants to trim Pentagon spending by $487 billion during the next 10 years.
Hawkish about defense spending, the GOP budget by Rep. Paul Ryan, R-Wisc., would add about $300 billion to the military during that same period.

Sticking Point:
GOP claims cuts jeopardize national security.
Sticking Point:
It's hard to whittle down the deficit and not touch the miliary or taxes. Dems know this.

Source


If you need the product or service, please visit these preferred sponsors of The Political Commentator

Put Down 3.5% on Your New Home.

Click here to find the right student loan for you

No comments :

Post a Comment

;