As we finish up what’s left of our Thanksgiving leftovers and adjust our belts—by which I mean we take them off—we look forward to Christmas, New Years and the fiscal cliff. President Barack Obama and budget experts have congregated at Capitol Hill and have made a resolution for New Years to finalize a plan that will put a stop to our deficit and set us on the right course to recovery. With the federal debt approaching the $16 trillion milestone, the freshly re-elected president has decided to take action and promised to have a decisive economic plan etched in stone by the first of January.
Fiscal cliff negotiations between Republicans and Democrats have gotten off to a rough start. Republicans advocate several severe cuts in federal spending in order to solve the problem. Though these cuts are yet to be specified, it has been demanded that Obamacare be put on the table for consideration. They argue everything needs be looked over and analyzed. It has been said that Republicans would like to cut programs like Medicare, Medicaid and Social Security and in turn keep taxes the same across the board. In obvious disagreement Obama and Democratic proponents suggest that the best course of action would be to simply get rid of the Bush tax cuts for those making over $250,000 a year and keep it for those who make under that much. Obama says that he would be willing to let the taxes on better-off individuals go up to a little past 36 percent while Republicans debate that they will not support tax increases past the set 35 percent. Democrats are reluctant to put Obamacare in the negotiations, saying the plan will actually save the country money in the long-term.
In order for anything to get done there is going to need to be some sacrifice from all sides. Interest groups across the nation have flocked to media outlets and Capitol Hill in a strained effort to keep their interests off the chopping block. Union leaders in the federal sector have pleaded to be left out of the negotiations under the pretext of having sacrificed enough by taking a freeze in their wages. Organizations like the AARP are sending out commercials in order to keep social security and Medicare in place. Several organizations believe an attempt to solve a problem like this should take more consideration and be given ample time, not a deadline.
So in the frenzy of it the entire situation comes down to two questions: Is it reasonable to assume that the government can formulate a plan that will create $6 billion by New Years? And is it possible for Democrats and Republicans to come to agreement in order to stand off the fiscal cliff? I believe that it is likely going to be a stretch, but a necessary one. The biggest obstacle will be to find common ground between a Republican-backed federal cut-back strategy and a Democrat-supported tax raise plan. While I believe that it will be necessary for both parties to compromise on certain issues, I am hopeful the president does not decide to put Obamacare through the shredder. Regardless, the compromise needs to be made, because anything is better than the incoming cuts and tax-raises of the 2013 fiscal cliff.
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