Christmas is cancelled or it could be for Congress if fiscal cliff talks drag on through the holidays.
Democrats and Republicans are as entrenched as ever with the former wanting tax hikes and the latter backing spending cuts. But with President Obama’s popularity ratings on a high it’s no good the Republicans dreaming of what might have been.
“If Romney had won the election, there really would have been a turn to the right in American policies and politics. The tax cuts that were due to expire would have been continued,” said economist Steven Weisman from the Peterson Institute for International Economics.
Pressure is growing on the Republicans and a rift has developed between those wanting to keep Bush-era tax cuts for the rich and those not wanting to be seen as protectors of millionaires.
According to John Sides, political scientist at George Washington University:
“There is still a significant fraction of the party that doesn’t want to raise taxes for the wealthy, that doesn’t want to spend money on domestic programs or wants to cut money on domestic programs and wants to reform entitlements in ways that the public typically doesn’t agree with.”
Something has got to give – if a deal is not reached taxes will go up for almost all working Americans at the start of the New Year and steep government spending cuts will kick in.
Our correspondent in Washington Stefan Grobe said:
“It’s almost a no-win situation for the Republicans. If they give in on higher taxes for the rich, they’ll be outmanoeuvred by President Obama. If they don’t, they’ll get crushed by public opinion.”