Countdown to the cliff

The White House and congressional leaders will meet this week.

We at APA will refrain from raising your blood pressure with headlines like “Countdown to Meltdown! Cliff Divers Gathering!” Yes, the early 2013 deadlines for the fiscal cliff (Jan. 1 for the tax expirations, Jan. 3 for the spending cuts) are closing in. But the uptick in numbers of official news conferences and meetings is heartening. It appears that the White House and Congress intend to resolve the deficit reduction issues that brought us to this unfortunate topographic and metaphorical location, not that any of the players expect easy negotiations. President Obama will meet with congressional leaders on Friday, Nov. 16.

This week we have seen many of the main actors staking out positions that we were already familiar with. As expected, there is more talk about the expiring tax provisions than about the threatened across-the-board spending cuts. This is logical if you consider that spending cuts may well be used to reach deficit reduction targets after a revenue agreement is reached. The two parties’ positions on tax policy and entitlement reform are much the same as we heard during the recent election campaign.

In President Obama’s news conference on Wednesday Nov. 14, for example, he reiterated his belief that he has a mandate to increase taxes for taxpayers making above $250,000. But he also said he would be flexible with specific rates in order to reach an agreement.

In a bid for a new term as House Majority Leader (he was reelected this week), Rep. Eric Cantor (R-Va.) sent a letter to fellow House Republicans on Nov. 7 about the fiscal cliff, long-term reforms and issues of working with the White House. He wrote:

“To state the obvious, there is a significant divide between the President’s approach to these issues and ours. But, the American people expect and they deserve that we act to bridge our differences and deliver results.

“The President cannot demand that every issue be resolved his preferred way. After all the President may have been reelected, but so was our majority. Likewise, we cannot expect that every issue will be resolved the way we prefer...

"... We have spent the past four years fighting President Obama’s attempts to raise taxes and we will continue to do so. On January 1st there will be a $400 billion income tax increase that takes effect automatically. This tax increase will hit every single taxpayer, raising tax rates across-the-board, reinstating a punitive death tax, reimposing the marriage penalty, and even cutting the per child tax credit. Simply raising taxes won’t solve our deficit problems. And many of the President’s proposed tax increases will directly hit those we are counting on most to get our economy going: small businesses.

“But as we have discussed over the past two years, more short-term extensions of our current tax structure isn’t what is best for our economy...If the President is serious about getting Americans back to work and avoiding a $400 billion tax hike on January 1st, he will join us in locking in a process for fundamental tax reform in 2013.”

The Coalition for Health Funding, which advocates for adequate budgets for the U.S. Public Health Service agencies, and of which APA is an active member, sent this letter to congressional leaders yesterday. It reiterates the coalition’s position that non-defense discretionary programs, such as research, education and public health, have already sustained cuts and should be held harmless from additional budget cuts.

We at APA will closely monitor negotiations on this issue, and keep you apprised of any progress or setbacks.