Debt Limit Extension: Payroll Tax Cut Extension, Plan B and Plan C

The Federal Debt Limit Debacle continues on in Washington. Republicans and Democrats continue to eyeball each other and continue to get nothing done.  By political standards, there is plenty of time left but tick tock, tick tock.

Contributing to the melee, the President whines, wags his fingers, storms out the door and threatens to take his toys and go home. Now that is leadership. He indicated more of less that he is willing to take his Presidency down and the country with it if he does get his way. So-be it, Mr. President, that is reassuring to us all. Another bull head joins the fray. I can see the main event match now with House Majority Leader Eric Cantor (R-VA) and President Obama in the chicken wire-winner take all.

There are a few things to note, some of them major and some just a sideshow. First of all, in yesterdays meeting at the White House of the exalted political leaders, the President outlined a number of his tax increase requests (or is it demands?) They were the usual suspects—oil and gas, the dreaded corporate jet bonus depreciation, ethanol credits and a few others. However, rather than having this new revenue reduce the deficit, it would be applied to the two percent employee-only reduction in payroll taxes enacted last year. This was outlined in a piece I did several weeks ago.  So, the White House has figured out that if this tax reprieve is not extended, the net take home pay for all working American will go down next year. Wonder how that will impact the economy? This will be interesting provision to watch and at this point, doubtful the Republicans will offer any help.

The respective parties seems to be without a plan other than to state the debt ceiling will be expanded. Not sure how yet. The “grand bargain" is dead. The liberals seem to talk a good game on wanting to rein in spending but there are little specifics and the amount keeps on shrinking. Each side is entrenched and waiting for the whistle to blow to go “over the top” into the inevitable slaughter in no man’s land.

Senator Mitch McConnell (R-KY) is floating plan, (aka Plan B) which is difficult to politically and substantively understand. It essentially allows the President by some edict to increase the debt limit $2.5 trillion in three draws. In return, the President will have to suggest some matching spending cuts. Congress, of course, would have to enact such cuts, highly unlikely as Democrats have no will to cut the size of the Federal Government even tough the cuts will not take effect in anyone’s normal life span.

It is hard to make a judgment on this approach other than it appears to be a complete abrogation of legislative authority and the demolition of the checks and balance system of government. However, I will reserve opinion until I see the details if they emerge. The reaction to the McConnell Plan B has been tepid in the House but support for it has been building as a desperation measure. The one thing that will be clear if this approach is taken is that the opportunity to derail the government growth runaway locomotive--even in a small way--will be lost. No, make that squandered.

 Mr. Obama has told the negotiators to get back together. The daily séances have stopped for the moment. He has scheduled a press conference again today.  I wonder which one of his personalities will show up?  It is a political game for him so the Congress should strike a deal and sent it to him. Specifically the House should pass a bill extending the debt, and include the spending cuts. Let Senator Reid  (D-NV) then earn his keep by passing something. Maybe we could call that Plan C.

 

 

 

 

 

 

 

 

 

 

 

 

Comments

[Shop Timberland Online]

Nice, and thanks for sharing this info with us.Good Luck!

[Gloppybooplag]

2724 online nolvadex pharmacy http://buynolvadextam.com/#1581 zoloft and tamoxifen drug 3857 pediatric dose amoxicillin clavulanic acid http://buyamoxil-ph.com/#7722 amoxicillin al 500 alkohol