Will Fiscal Cliff Drama Have a Hollywood Ending?
But congressional compromise is yet another problem in the unfolding saga. After all, “by returning a divided government to Washington, the electorate has given neither party a clear mandate to address the lackluster recovery, the fiscal cliff, and the looming debt crisis,” Brian Kessler of Moody’s Analytics told the Wall Street Journal. While congress may see compromise as a form of political acquiescence that voters do not want, a recent USA Today/Gallup poll shows that 82 percent of adults believe “it’s either extremely or very important for Congress and the president to find a deficit-reduction deal to prevent a massive amount of tax hikes and spending cuts from kicking in at the beginning of next year.”
Even President Obama emphasized the need for compromise in his news conference on Wednesday, asking “The only question now is are we going to hold the middle class hostage in order to go ahead and let that happen?”
In typical fashion, congressional Republicans and Democrats are situated in opposite camps, with the right favoring the closure of loopholes and the left pushing tax hikes on the rich, but there are some signs that an agreement could be reached. Reuters reported on Tuesday that “Obama and the Republican leadership of the House of Representatives have signaled a more conciliatory tone since last week’s election.” Furthermore, as The Economist argued, once the budget cuts and tax hikes gradually start to affect the U.S. economy in January, both parties will be better situated to resolve the fiscal cliff dilemma.
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