Treasury Secretary Tim Geithner again inserted himself into fiscal cliff negotiations Wednesday, sending a two-paragraph letter to Majority Leader Harry Reid, D-Nev., informing him that the federal government will reach its $16.394 trillion legal borrowing limit in less than a weak. “I am writing to inform you that the statutory debt limit will be reached on December 31, 2012,” Geithner wrote. That’s quite a way to celebrate the New Year.
Geithner’s letter also said Treasury would soon begin taking certain “extraordinary measures” that would “create approximately $200 billion in headroom under the debt limit.” “Under normal circumstances, that amount of headroom would last approximately two months,” Geithner wrote. But “the expiring tax provisions and automatic spending cuts” scheduled to begin on January 1st could add “some additional time to the duration of the extraordinary measures,” he explained.
Unless Reid begins rounding up votes for a new bill, Geithner will get that extra time. House Republican leaders upped the pressure on Reid earlier in the day by releasing a statement promising to vote on whatever Reid produces. “The House will take action on whatever the Senate can pass, but the Senate first must act,” a statement from House Speaker John Boehner’s, R-Ohio, office read.
Reid is reportedly already rounding up votes from Republican Senators for a package that would extend current tax rates for all incomes below $250,000 and fix the Alternative Minimum Tax that is also scheduled to hit millions of upper-middle class American families. Democrats also want to tack on another unemployment benefit extension, a Medicare doc fix, and maybe even a delay in scheduled spending cuts.
But whatever talks Reid is having with willing Republicans apparently does not include Minority Leader Mitch McConnell. McConnell spokesman Don Stewart told The New York Times that neither the White House nor Reid’s office has reached out to McConnell to begin negotiations.
The resolution of the federal government’s most recent fiscal crisis now rests firmly in President Obama’s hands. Either he can find the seven Republican Senate votes necessary to prevent a $4.6 trillion tax cut between now and New Year’s Eve, or we all are about to go over the cliff.
From The Washington Examiner
Examiner Editorial: No vote for Kerry until Clinton testifies
Tim Carney: Taxpayers often win when special interests fight each other
Michael Barone: Obama’s numbers went down, but Romney never inspired voters to vote
Phil Klein: John Roberts is the person of the year
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The Wall Street Journal, Home Prices Hit a Milestone: Home prices are on track to notch their first yearly gain since 2006, the strongest performance since the housing bust and a development that could accelerate the real-estate rebound even as the broader economy stutters.
The Los Angeles Times, Black voter turnout may have surpassed whites for the first time: Despite often-voiced concerns about the effect of voter identification laws, black voter turnout remained high in 2012 and, for the first time, may have topped the rate for whites, according to a new study by the Pew Research Center.
Jamelle Bouie explains why Democrats insist on upper-income tax hikes.
Kevin Drum tries to brand the fiscal cliff as “The Great Republican Recession of 2013.”
Joan McCarter worries that Kent Conrad is giving away too much in fiscal cliff negotiations.