Fiscal Cliff Update

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Earlier today I was wondering when the business community would start seriously pressing Republicans to agree to tax increases in order to avoid a new recession caused by either the fiscal cliff or another debt ceiling standoff. Tonight, the New York Times reports that the pressure has started:

A broad swath of the nation’s leading chief executives dropped its opposition to tax increases on the wealthiest Americans on Tuesday, while the White House quietly pressed Wall Street titans for their support as well.

Before Tuesday’s about-face, the Business Roundtable had insisted that the White House extend Bush-era tax cuts to taxpayers of all income brackets, but the executives’ resistance crumbled as pressure builds to find a compromise for the fiscal impasse in Washington before the end of the year. “We recognize that part of the solution has to be tax increases,” David M. Cote, chief executive of Honeywell, said on a conference call with reporters. “That’s the only thing that allows a reasonable compromise to be reached.”

The Business Roundtable isn’t a center-right organization. It’s a pretty central player in movement conservatism. The fact that they’re publicly urging Congress to accept higher revenue—”whether by increasing rates, eliminating deductions, or some combination thereof”—is a significant step.

And the Wall Street Journal reports that there are signs of progress on a deal. They say that Obama has lowered his tax target from $1.6 trillion to $1.4 trillion, while John Boehner has produced a counteroffer that’s slightly different from last week’s proposal. In addition, the White House has put corporate tax reform on the table as an extra bargaining chip.

If I had to bet, I’d bet that we’re not going to see a deal before January 1. But you never know. Once the dam breaks, it’s possible that we could reach agreement pretty quickly.

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DEMOCRACY DOES NOT EXIST...

without free and fair elections, a vigorous free press, and engaged citizens to reclaim power from those who abuse it.

In this election year unlike any other—against a backdrop of a pandemic, an economic crisis, racial reckoning, and so much daily bluster—Mother Jones' journalism is driven by one simple question: Will America move closer to, or further from, justice and equity in the years to come?

If you're able to, please join us in this mission with a donation today. Our reporting right now is focused on voting rights and election security, corruption, disinformation, racial and gender equity, and the climate crisis. We can’t do it without the support of readers like you, and we need to give it everything we've got between now and November. Thank you.

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