John Boehner (R., Ohio): “The House did not take up the tax measure today because it did not have sufficient support from our members to pass. Now it is up to the president to work with Senator Reid on legislation to avert the fiscal cliff. The House has already passed legislation to stop all of the January 1 tax rate increases and replace the sequester with responsible spending cuts that will begin to address our nation’s crippling debt. The Senate must now act.”
Barney Keller, a spokesman for the Club for Growth: “We are pleased that the Republicans did not vote to raise taxes. We need to get real about our problems and stop playing political games. Only in Washington can a bill that increases taxes be considered a tax cut.”
Ezra Klein (Washington Post): “It’s not entirely clear whether Boehner will be the speaker of the House a month from today. The vote to elect the next speaker is on Jan. 3. To win, you need an absolute majority of the House, not a plurality. Even a hopeless conservative challenge that attracts only a handful of Republican votes could deny Boehner the speakership until a consensus candidate emerged. Tonight’s vote makes that challenge more likely.
A significant number of Boehner’s members clearly don’t trust his strategic instincts, they don’t feel personally bound to support him, they clearly disagree with his belief that tax rates must rise as part of a deal, and they, along with many other Republicans, must be humiliated after the shenanigans on the House floor this evening.
Worse, they know that Boehner knows he’ll need Democratic support to get a budget deal done. That means “a cave,” at least from the perspective of the conservative bloc, is certain. That, too, will make a change of leadership appealing.”
If a conservative spoiler runs, he or she could very possibly deny Boehner the 218 votes he needs to become speaker, clearing the way for a more moderate candidate like Eric Cantor to unite the party. It’s hard to say exactly how likely that is. But it’s likelier than it was, say, this morning.
U.S. Debt on Track to Fuel Economic Crisis
WSJ – By Michael R. Crittenden
Rep. Scott Rigell, a first-term GOP congressman from Virginia who sits on the House armed services committee, said Speaker John Boehner opened the Republicans’ Thursday evening meeting by saying it would be a quick conference and then took the unusual step of leading both a prayer and the Pledge of Allegiance. Mr. Boehner said the “Serenity Prayer,” Mr. Rigell said, but made no attempt to garner further support for his Plan B proposal.
Mr. Boehner had pushed the proposal, which would extend the Bush-era tax cuts for the first $1 million of income, as an alternative to reaching a broader deal with President Barack Obama.
“I knew they were having some trouble with the vote, but I had just assumed they’d say ‘Hey look, rally, let’s go.’ That did not happen,” Mr. Rigell said. “He said ‘We do not have the votes and we are not going to have any further votes and I’ll go before the press tomorrow and explain we don’t have the votes.’ ”
He added that a few members clapped, but that many were trying to process the sudden change of plans.
“I’m not sure the people who have been up here 20 or 30 years really understand what the next iteration of this process is,” Mr. Rigell said.
In a statement, Mr. Boehner said: “The House did not take up the tax measure today because it did not have sufficient support from our members to pass. Now it is up to the president to work with Senator [Majority Leader Harry] Reid on legislation to avert the fiscal cliff. ”
About the Speaker of the U.S. House of Representatives
The position of Speaker of the House of Representatives is created in Article I, Section 2, Clause 5 of the U.S. Constitution, which states, “The House of Representatives shall chuse their Speaker and other Officers; …”
How the Speaker is chosen
As the highest-ranking member of the House, the Speaker is elected by a vote of the members of the House. While it is not required, the Speaker usually belongs to the majority political party. The Constitution does not require that the Speaker be an elected Member of Congress. No non-member has ever been elected Speaker.
The Speaker is elected following each mid-term election held every-other year, and serves a two year term. Along with the title and duties, the Speaker of the House continues to serve as the elected representative from his or her congressional district, and takes part in debate and votes like all other representatives.
Powers duties and privileges of the Speaker
Typically the head of the majority party in the House, the speaker outranks the Majority Leader. The salary of the Speaker is also higher than that of the Majority and Minority Leaders in both the House and Senate.
The Speaker rarely presides over regular meetings of the full House, instead delegating the role to another representative. The Speaker does, however, typically presides over special joint sessions of Congress in which the House hosts the Senate. The Speaker exerts power over the legislative process by setting the House legislative calendar determining when bills will be debated and voted on.
The Speaker often utilizes this power to help fulfill his or her responsibility of making sure bills supported by the majority party are passed by the House. The Speaker also serves as chair of the majority party’s House steering committee.
Perhaps most clearly indicating the importance of the position, the Speaker of the House stands second only to the Vice President of the United States in the line of presidential succession.
The first Speaker of the House was Frederick Muhlenberg of Pennsylvania, elected during the first session of Congress in 1789.
Social Security Deficits are Permanent and Growing
Federal Revenues by Source
CNBC – By: Mark Koba
The ‘fiscal cliff’ may sound like the name of an exercise retreat on a mountain top in Southern California, but the reality is not so pretty.
What ‘fiscal cliff’ actually refers to is the potentially dire economic situation the U.S. faces at the end of 2012.
The now infamous phrase was coined by Federal Reserve Chairman Ben Bernanke in February 2012, during one of his required appearances before Congress on the state of the U.S. economy. He described … “a massive fiscal cliff of large spending cuts and tax increases” on Jan. 1, 2013.
Since then, ‘fiscal cliff’ has taken on legendary status as a harbinger of economic gloom and doom.
So what does the ‘fiscal cliff’ trigger for the economy and how bad can it be? Here’s a look.
How does the fiscal cliff come about?
At midnight on Dec. 31, 2012, a major provision of the Budget Control Act of 2011 (BCA) is scheduled to go into effect. This was the deal signed by President Obama in August 2011 to end the Congressional battle over raising the government debt ceiling.
The Act was a compromise between Democrats and Republicans on economic policies while temporarily increasing the debt ceiling — the amount of money the government could borrow from itself to pay its bills.
The crucial part of the Act provided for a Joint Select Committee of Congressional Democrats and Republicans — the so called ‘Supercommittee ‘— to produce bipartisan legislation by late November 2012 that would decrease the U.S. deficit by $1.2 trillion over the next 10 years.
To do so, the committee agreed to implement by law — if no other deal was reached before Dec. 31 — massive government spending cuts as well as tax increases or a return to tax levels from previous years. These are the elements that make up the ‘fiscal cliff.’
What laws from the Budget Control Act will go into place?
Among them are the end of 2011’s temporary payroll tax cuts — the result of which will be a 2 percent tax increase for most workers.
There will also be an end to several tax breaks for businesses, and changes in the alternative minimum tax (AMT) that could result in more people having to pay — the income range is currently between $45,000 and $200,000 — and higher tax payments for those who do.
Several of these existing tax breaks came from the George W. Bush tax cut bill of 2001, which were extended under President Obama until the end of 2012.
There will also be tax increases for higher income individuals to help pay for the ffordable Health Care Act (so-called ObamaCare).
At the same time, spending cuts will take place in more than 1,000 government programs, including cuts in the defense budget as well as social programs like Medicare, through 2022.
But some programs are exempt from the BCA. Those are Social Security, federal pensions and veterans’ benefits.
What is the impact of the tax increases and budget cuts?
While higher taxes and spending cuts would reduce the U.S. budget deficit by an estimated $560 billion, the Congressional Budget Office (CBO) predicts that the policies from the BCA would cut gross domestic product by four percentage points in 2013. Many analysts say that would likely send the still-struggling U.S. economy into a recession, if not a depression, as the financial markets would likely go into a tailspin while businesses and consumers both cut back on spending.
As a result of the economic slowdown from the stilted GDP growth, the CBO also predicts unemployment would rise by almost a full percentage point, with a loss of about two million jobs.
Can anything be done to prevent the ‘Fiscal Cliff’ from happening?
The major problem has been getting Republicans and Democrats in Congress and the White House to agree on budgetary policy for the future. epublicans say they want cuts in government spending to reduce the country’s deficit without raising taxes. For their part, Democrats say they want spending cuts with certain taxes raised.
There have been calls to extend some or all of the tax cuts and to replace the massive cutbacks in government spending with more targeted reductions. Some proposals include repealing the BCA altogether and just keeping what exists now until another agreement can be reached.
But so far, there is no consensus on what to do, and some analysts say nothing might happen to avoid the ‘fiscal cliff’ until the last week in December.
There is one ace in the hole, so to speak. Even if the BCA deadline comes and nothing is done, Congress can still act to change laws retroactively if it chooses.
“God grant me the serenity to accept the things I cannot change,”