New Deal Could Avoid Looming Fiscal Cliff


An offer from House Speaker John Boehner could push the federal debt limit fight to the end of next year and is breathing new life into stalled talks over the year-end fiscal cliff. It remains a possibility that any fiscal cliff legislation could include the farm bill.

Boehner’s proposal would reportedly generate about two-trillion dollars in savings over the next decade. The amount is split between new taxes and spending talks. The offer would generate as much as 460-billion over the next decade by allowing the George W. Bush-era tax cuts expire on income over one-million dollars a year.

The remaining tax revenue would be generated through a rewrite of the tax code aimed at limiting deductions and other tax breaks. For everyone else – the Bush tax cuts would be extended.

But Boehner wants something in return for the higher tax rates for millionaires. He wants changes to federal health and retirement programs – and is looking for one-trillion dollars in total savings. The President has offered 600-billion dollars in spending cuts – with 350-billion coming from health programs and none from Social Security. As for the issue of taxes – President Obama has called for the Bush tax cuts to expire for income over 250-thousand dollars a year.

The Joint Committee on Taxation says the move would raise 830-billion over the next decade. He is also looking to raise taxes on inherited estates and new limits on tax breaks for the wealthy – to bring total new taxes to 1.6-trillion dollars. White House officials dropped their tax demand to 1.4-trillion last week.

According to some Democrats – Boehner’s proposal to set the income threshold for tax rate hikes at one-million dollars would sacrifice too much money. A threshold of 375-thousand or 500-thousand might be more acceptable.

If an agreement is reached – people on both sides of the aisle say it would probably include a postponement of automatic spending cuts. While there’s still hope of a resolution by Christmas – those close to the talks say a lot of work is still needed before Obama and Boehner seal a deal.

Source: NAFB News Service

Posted by Northern Ag Network

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