Both the Republican and Democratic Party are facing a very tight deadline to prevent the effects of the fiscal cliff from affecting the American economy. Both parties are blaming each other for the delays in reaching a deal and both of them believe that the senate should extend the deadlines to avoid spend $600 billion on tax increases. If the Congress doesn’t reach a deal by the end of this year, taxes will end up increasing and business experts believe that the country will be heading into a serious recession.
The President spoke yesterday morning with House Minister Nancy Pelosi to receive the latest updates about the negotiations taking place. The House has previously passed a new bill last August that extends tax cuts no matter what the income level of the citizen is. Another bill was passed last week that replaces spending and tax cuts with other types of reductions. The Senate wasn’t able to address other important expiring provisions until now. One of the most important provisions includes scheduling advanced pay cuts to the doctors who are under Medicare or unemployment insurance.
These talks and the failure to reach a deal have already affected the economy with the stocks decreasing. The benchmark for five year notes has already decreased by three points or 0.03%. Reid has already urged Boehner to try to convince his party to pass the bill that includes extending tax cuts only for individuals who have an income of $200,000 and above. ‘’The Senate is currently being controlled with dictators, who aren’t allowing the majority to implement what they and the American citizens really need,’’ Reid explained.
This bill definitely has its complications as the constitution demands most tax measures to first be initiated in the Senate. The bill doesn’t address unemployment benefits or real estate tax clearly as well. The United States will reach a $16.4 billion debt by the end of this year, a debt they never reached previously.
It is become obvious now that there is no way a deal will be reached by the end of this year. American citizens are now starting to blame this whole ordeal on both parties, who decided to put their benefits first instead of focusing on what citizens need. Middle-class citizens are now really worried about becoming financially unstable again after they took a long time to make ends meet after the financial crisis that took place in 2010.