There was good news Friday, following a pow-wow between President
Obama and leaders of the House and the Senate: All four of the
legislators predicted that a budget agreement will be reached by year
end, averting a plunge off the ''fiscal cliff." A week ago, we seemed
to be tottering on the brink. A quickie law will be passed delaying the
detonation of the Budget Control Act of 2011, which calls for steep
spending cuts, beginning in January. This, plus a delay in automatic tax
increases, would keep us from going over the cliff. Look for a detailed
list of goals for revenue gains and spending cuts to be announced
before Christmas -- with the actual butcher's bill passed early next
year by the new Congress.
House Speaker John Boehner Friday said he would agree to higher revenue in return for significant spending cuts. The Senate minority leader, Republican Mitch McConnell, said the cuts must include entitlement reform that fits a changing America. Surprisingly, neither the House minority leader, Democrat Nancy Pelosi nor the Senate majority leader, Democrat Harry Reid, objected. "I feel very good," said Reid, adding that the group had laid the cornerstone for a deal. Pelosi, bless her soul, said she wants to send a soothing message to consumers and the markets. She said this could be done in the short term by reaching an agreement on budgetary goals and a hard deadline for achieving them, and with measures of success along the way to build investors' confidence.
Steve McBee of McBee Strategic Insight, a well-connected Washington lobbying firm, told me he expects a final deal of $2 trillion in deficit reduction over 10 years, enough to calm, if not thrill, the markets. The starting point will be a much more ambitious $4 trillion proposal, he vaticinates. Brace for plenty of market volatility during the negotiations, he warns.
Article Source
House Speaker John Boehner Friday said he would agree to higher revenue in return for significant spending cuts. The Senate minority leader, Republican Mitch McConnell, said the cuts must include entitlement reform that fits a changing America. Surprisingly, neither the House minority leader, Democrat Nancy Pelosi nor the Senate majority leader, Democrat Harry Reid, objected. "I feel very good," said Reid, adding that the group had laid the cornerstone for a deal. Pelosi, bless her soul, said she wants to send a soothing message to consumers and the markets. She said this could be done in the short term by reaching an agreement on budgetary goals and a hard deadline for achieving them, and with measures of success along the way to build investors' confidence.
Steve McBee of McBee Strategic Insight, a well-connected Washington lobbying firm, told me he expects a final deal of $2 trillion in deficit reduction over 10 years, enough to calm, if not thrill, the markets. The starting point will be a much more ambitious $4 trillion proposal, he vaticinates. Brace for plenty of market volatility during the negotiations, he warns.
Article Source