Obama to end holiday early as `fiscal cliff' looms |
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Washington, Dec 26 (IANS) US President Barack Obama plans an early return to Washington, leaving his family in Hawaii for rest of the holiday vacation, the White House said. The president will leave for Washington Wednesday evening, as the Congress is back to work Thursday for "fiscal cliff" debate. Obama's Christmas holiday usually stretches into the new year, reported Xinhua. Obama and congressional lawmakers left Washington last Friday for the Christmas holidays. Pressure now is growing on Senate Democrats after a backup legislation crafted by Speaker John Boehner stalled last Thursday in the House of Representatives due to insufficient support even from his own party. If a deal is not reached before the year's end, some $600 billion in tax hikes and spending cuts are set to begin next month. The massive fiscal contraction could throw the US economy back into recession.
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Full House at January 19 2013, 02:25
IS THIS A FISCAL CLIFF OR IT IS A SHOW OF HANDS ?? !!
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Originally posted by aegisisc
Obama to end holiday early as `fiscal cliff' looms
By: Indo Asian News Service
Washington, Dec 26 (IANS) US President Barack Obama plans an early return to Washington, leaving his family in Hawaii for rest of the holiday vacation, the White House said.
The president will leave for Washington Wednesday evening, as the Congress is back to work Thursday for "fiscal cliff" debate. Obama's Christmas holiday usually stretches into the new year, reported Xinhua.
Obama and congressional lawmakers left Washington last Friday for the Christmas holidays.
Pressure now is growing on Senate Democrats after a backup legislation crafted by Speaker John Boehner stalled last Thursday in the House of Representatives due to insufficient support even from his own party.
If a deal is not reached before the year's end, some $600 billion in tax hikes and spending cuts are set to begin next month. The massive fiscal contraction could throw the US economy back into recession.
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The so called Fiscal cliff in United States refers to the economic effects that could result from tax increases for the middle classes, Federal spending cuts and a corresponding reduction in the budget deficit if existing TAX laws remain unchanged.
The laws leading to the fiscal cliff include the expiration of the 2010 BUSH's Tax relief act and planned spending cuts under the current budget control Act of 2011.
To avoid this FISCAL CLIFF The budget control was to be a compromise intended to resolve dispute concerning public debt ceiling. ( Which is not resolved as yet)
Key laws leading to the fiscal cliff are, as noted here under.
1) Expiration of the BUSH tax cuts extended by the tax relief to the rich, unemployment Insurance stoppage, Re-authorization & job creation act of 2010.
2) AUTOMATIC across the board spending cuts to most discretionary programs as directed by the budget control act of 2011.
3) Getting back to the old tax levels of the Alternative minimum Tax Thresholds to their year 2000 tax levels.
4) The expiration of the 2% social security Payroll tax cut, which will reduce the incoming revenues.
5) Expiration of Federal Unemployment benefits to those who are on it.
6) Will also introduce new taxes imposed by the Patient protection and affordable (OBAMA) care act and the Health care and Education Recondition Act of 2010.
The new projections from the FEDS are as stated in the (CBO) Congressional Budget Office Projections are : As follows.....
Decisions regarding the Fiscal cliff will have Implications for deficits, debt increases & the new scenario for the year 2013 to the year 2022 are:
1) The Baseline Project.....
2) The Alternative Fiscal Scenario......
1) The Baseline Project is:
Under the baseline scenario, tax cuts are allowed to expire on the 31st December of 2012 and NEW spending cuts are implemented in 2013, resulting in higher tax revenues plus reduced spending kicking in thus lowering deficits, debt ceiling and the interest etc., for next decade and beyond. Future deficits would be reduced from an estimated 8.5% of GDP in 2011 to 1.2% by 2021. Revenues would rise upwards of 24% GDP, versus the historical average rate of 18% GDP.
By this act the total deficit reduction or reduction of debt avoidance over the next ten year period could be as high as 7.1$ trillion, versus the $10-11 trillion debt increases if current policies are extended and adhered.
CBO estimates under baseline Projection that the Public debt will raise from 69% GDP of 2011 to 84% by 2035. In the long run, lower deficits & manageable debt should lead to a relativity higher growth estimates. For the short run the GDP may go down by more than 1% in the1st year.
2) Alternative Fiscal Scenario:
This scenario involves extending the Bush tax cuts, as they are currently, by repealing the automatic spending cuts, restricting the reach of the AMT & keeping Medicare reimbursement rate at the current level, which is a staus quo.
Under this scenario, public debt rises from 69% GDP in 2011 to 100% by 2021 and approaches 190% by 2035 and that is a whopping big hit on the U.S. and World economy.
Summary:
Fiscal or Economic Measures of CBO Baseline Alternative Scenario is..:
1) Federal deficit in FY 2013 will increase from 641 Billion to 1037 Billion
2) Economic growth for the fiscal year 2013 will be a negative, -0.5% of GDP which will be a 1.7% of GDP
3) Unemployment rate for October 2012 to December 2013 will drop from 9.1% 8.0% by then.
4) Public debt in 2022 will rise from the current 58% of GDP to 90% of GDP by then.(2022)
The Alternative scenario has considerably higher debt and Interest payment than the base line projection. Hence baseline projection is a better option. Will they opt for it?
And is this fiscal cliff over? And are they playing politics in the senate and hanging the citizens till the very last minute, just to show off who they really are? There will be more of this kind of display yet to come....
We got to wait and see.!!
FH
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aegisisc at December 27 2012, 02:31
Obama to end holiday early as `fiscal cliff' looms
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