US Fiscal Cliff Watch: Boehner Downplays Deal During Lame Duck

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– House Speaker: Post-Election Session Isn’t Time for Deficit Deal
– Key Democratic Senator ‘Optimistic’ on Deal to Avert Fiscal Cliff
– Budget Experts Remain Divided If Short-Term Extensions Will Happen

By John Shaw

WASHINGTON (MNI) – House Speaker John Boehner’s comments over the
weekend that he doubts a major deficit reduction agreement can — or
even should — occur during the post-election congressional session
injects fresh uncertainty about how the fiscal cliff will get resolved
later this year.

In an interview with Politico, Boehner downplayed the likelihood
that Congress and the White House can strike a significant deficit deal
in the five or six weeks of a Lame Duck session that would run from
mid-November to the end of December.

“I think that’s difficult to do,” Boehner said.

“And frankly, I’m not sure it’s the right thing to do — have a lot
of retiring members and defeated members voting on really big bills,” he

Negotiating and then trying to pass a sizeable deficit reduction
agreement is not “the appropriate way to handle the Lame Duck” session,
Boehner said.

But Sen. Chuck Schumer, the third ranking Senate Democrat, offered
a strikingly different assessment of the fiscal landscape Tuesday in a
speech on fiscal issues.

Schumer said he is “optimistic” an agreement can be reached during
the post-election congressional session to avert the fiscal cliff.

“I absolutely believe a deal can happen,” Schumer said, adding
that policymakers should seek a “real Grand Bargain” to replace the
fiscal cliff.

“It’s better to do it now if we can,” he said of the Lame Duck

Schumer said a credible deficit reduction agreement would consist
of $4 trillion in deficit reduction, including about $1.5 trillion in
additional revenues.

The fiscal cliff refers to the convergence of several separate but
significant events: the expiration of the Bush era tax cuts at the end
of this year, the first round of across-the-board spending cuts that are
scheduled to begin in January under sequestration, and the need to
increase the statutory debt ceiling in the coming months.

Stan Collender, a budget expert at Qorvis Communications, said it
is increasingly likely the U.S. will go over the fiscal cliff — at
least for a short time.

Collender said there will not be enough time during the Lame Duck
session to negotiate an agreement and even more importantly, the
political climate will not be conducive to dealmaking in November and

“I just don’t see a deal happening this year, regardless of how the
elections come out. Among other things, I just can’t see Boehner making
a deficit agreement in late December that includes additional revenues
when he could face a leadership election a few weeks later,” Collender
said. “This would be the worst possible time for him to make a key

“Maybe he could make that concession a few months later in a
different political context, but not right after the elections,” he

Bob Bixby, executive director of the Concord Coalition, a budget
watchdog group, said there is a “strong chance” there will be six-month
extension of fiscal cliff deadlines.

But he said the political climate remains deeply unsettled and any
prediction should be made cautiously.

Bixby noted both presidential candidates — President Barack Obama
and Mitt Romney — have said virtually nothing about the fiscal cliff on
the campaign trail, including in their debate last week.

“I can understand why candidates are not eager to talk about the
fiscal cliff. The issues are both hard and complicated. But I would have
thought that it might come up in the debates — at least as a jumping
off point to discuss broader fiscal issues,” Bixby said.

The presidential and congressional elections are Nov. 6. Congress
returns to Washington the week of Nov. 12 and it seems almost certain
that Obama, Boehner, Senate Majority Leader Harry Reid, Senate Minority
Leader Mitch McConnell and House Minority Leader Nancy Pelosi will sit
down and discuss the fiscal cliff impasse.

Several groups of lawmakers are involved in informal budget talks
to craft a deficit reduction package that the leadership could review.
Congressional staffers are also working on a menu of options that could
be pursued during the Lame Duck session and into 2013.

** MNI Washington Bureau: (202) 371-2121 **

[TOPICS: M$U$$$,MFU$$$]


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