The trouble is one person's loophole is another person's needed economic stimulus.
Among the ideas floated in the last few weeks is to eliminate -- or at least pare -- the mortgage interest deduction, which likely will cost the federal coffers $100 billion by 2014.
National Association of Realtors Chief Executive Officer Jerry Howard warned last week eliminating the mortgage interest deduction would send the just-recovering housing industry, which is beginning to show signs of life, back into free fall. The deduction is among the oldest breaks in the U.S. tax code and benefits mainly middle class families. The Tax Policy Center estimates those earning more than $250,000 a year get a $5,460 break from it, compared to just $91 for those earning less than $40,000.
What Republicans really have their eyes on is entitlement spending, which comprises 62 percent of the federal budget. Predictably, Democrats say no way, not as part of the "fiscal cliff" negotiations, although they acknowledge both Social Security and Medicare need to be tweaked to remain solvent.
"If we simply stand by and say 'don't touch Medicare in any way, for any reason, ever,' we are inviting a crisis that opponents can exploit to eviscerate Medicare or even to end it," Senate Democratic Whip Dick Durbin, D-Ill., said last week. "We must accept meaningful reforms that lead to better healthcare at lower costs -- not just for our public health programs, but for our entire health care system."
And as Clinton said during the campaign, it's all arithmetic.
Obama last week mounted a campaign-like push to get the public behind his position to pressure lawmakers, urging people to post on Twitter using the hashtag "#My2K," a reference to the average $2,000 taxes would go up for the middle class if nothing is done.
Friday, he went to Hatfield, Pa., to rally support, a trip ridiculed by Boehner, who likened it to a "victory lap" and said what is really needed from the White House now is not gloating but "leadership."
Meanwhile, Senate Minority Leader Mitch McConnell, R-Ky., who has said he would be OK with capping deductions, accused the administration of backtracking.
"Today [Thursday] they took a step backward, moving away from consensus and significantly closer to the cliff, delaying again the real, balanced solution that this crisis requires," he said following his meeting with White House lobbyist Rob Nabors and Geithner, the point man in the talks. "This is a real problem. Every day they delay brings us one step closer to the fiscal cliff that we simply must avoid."
Financier Warren Buffett told CNBC last week he doesn't expect a deal to be reached before the first of the year although he expects one to be reached eventually.
Buffett, in a New York Times op-ed, proposed raising taxes on incomes of more than $500,000, keeping federal revenue to 18.5 percent of gross domestic product and limiting federal spending to 21 percent of GDP -- a plan he acknowledges does nothing to reduce the national debt but one that would see the deficit diminish over time. Currently, government spending is at 24 percent of GDP.
"I have seen Washington and they don't want to negotiate in public, obviously," Buffett said. "So you're not going to hear people come on -- you're not going to hear Democrats talk a lot about what expenditures they're willing to cut. ...
"You're not going to hear Republicans talk a lot about what revenues they'll increase. But ... it's probably a good thing because then you get stuck in those positions and your ego gets involved and your constituents say, 'Well, you said this and why did you back off?' and all that. But in private, they will -- they will -- in my view, they'll get to something like that, but it may not be by Dec. 31."
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