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Guangming Daily News , China

Obama and the Fiscal Cliff:
Hoping for a Compromise

By Qingcai Wu

Translated By Jingman Xiao

17 November 2012

Edited by Kath­leen Weinberger

China - Guangming Daily News - Original Article (Chinese )

On Nov. 16, U.S. President Barack Obama met with congressional leaders of both parties in the White House in order to open urgent discussions regarding the plans for preventing America from falling over the “fiscal cliff.” Economists warn that America is very likely to be exposed to a second economic recession if it fails to pause on the brink of this precipice, which looms at the end of this year. During the negotiations that day, Obama classified avoiding the fiscal cliff as urgent business and emphasized to the leaders that measures had to be taken to ensure that taxation on middle-class families would not increase, that the U.S. economy would remain robust and that employment opportunities would be enhanced.

A fiscal cliff refers to the situation in which tax levels will be raised and spending will be cut starting Jan. 1 next year, which will result in a $532 billion increase in taxation and a $136 billion decrease in government expenditures. This will occur if no agreement on the plans to reduce the deficit can be reached by Dec. 31. Warnings from economists suggest that both the American and the global economy would be dragged into a double-dip recession.

Obama hoped that some difficult compromises would be achieved with cooperative efforts by the leaders of the two parties. Speaking to this point, Obama announced, “I believe everyone agrees on one point — that is, to take action. Americans would like to see us paying attention to them rather than focusing on the Washington politics.”* Leaders who attended this meeting included House Speaker John Boehner, Senate Majority Leader Harry Reid, House Minority Leader Nancy Pelosi and Senate Minority Leader Mitch McConnell, all of whom praised this meeting with Obama and described it as very instructive.

In order to create an amicable atmosphere for the meeting, Obama mentioned to the reporters present that it would be Boehner’s birthday the next day. The president even joked that he had not brought a birthday cake in an effort to avoid embarrassing the House speaker, as he did not know how many candles were needed. The solemn-looking Boehner, who was sitting beside him, even smiled once (once in a blue moon, that is) and shook hands with Obama to thank him.

After the conference, the Republican Boehner sent an optimistic signal. He announced that he believed that the two parties would eventually reach an agreement on how to escape the fiscal cliff situation. In order to express his sincerity, he also agreed to return the issue of increasing fiscal income to the negotiating table — provided that spending must be cut significantly.

Other leaders also showed confidence in an agreement being reached. The Democratic Reid hoped that senators would work around the clock during Thanksgiving to reach a deal as soon as possible. Pelosi, also a Democrat, claimed that there should be a deadline for achieving the agreement before Christmas. McConnell, a Republican, compromised by including the possibility of increasing fiscal income into the discussion.

Although Obama and these leaders appeared rather well-mannered and soft-spoken in their first conference, their differences in terms of tax increases on the rich and so on are still quite evident. Obama has already stated quite firmly that any compromise must include the proposal of increasing taxes on the affluent. Boehner, however, is strongly against this.

Despite the fact that both parties show their willingness to compromise, it is estimated that there will be a tough political battle behind the curtains due to these huge divergences. However, there is little time left for both parties to play this “dancing-on-the-edge” game. A month from now, these politicians, who will determine the fate of America, will either have achieved the agreements or else pushed America into the economic abyss once again.

*Editor’s note: While accurately translated, this quotation could not be verified.



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