Wow. Our experiment is off to a great start—let's see if we can finish it off sooner than expected.
Friday evening President Obama expressed modest optimism that the House and Senate will reach a fiscal cliff deal before the New Year's deadline, but said that if Congress fails to act, he will ask Senate Majority Leader Harry Reid (D-Nev.) to propose a bill that protects unemployment benefits and stops tax increases on the middle class.
"I will urge Senator Reid to bring to the floor a basic package for an up-or-down vote, one that…lays the groundwork for additional deficit reduction and economic growth steps," President Obama said at a press conference on Friday, after meeting behind closed doors with Sen. Reid, Senate Minority Leader Mitch McConnell (R-Ky.), House Speaker John Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.) "That's the bare minimum...and it shouldn't be that hard."
As my colleague Andy Kroll points out, the fiscal cliff "isn't really a cliff" but we're still "in for roughly $400 billion in tax increases and $200 billion in spending cuts…spread out over many months." Without a fiscal cliff deal, Bush's tax cuts for the middle class will expire, shrinking US GDP by 1.3 percent. Additionally, unemployment benefits worth $30 billion are expected to run out, potentially ending benefits for millions of Americans.
"The American people are not going to have any patience for a politically self-inflicted wound to our economy," the President said. "Outside of Washington, nobody understands how it is that this seems to be a repeat pattern."