Both parties dig in for looming end-of-year fiscal battle

John Boehner, left, and Harry Reid, right.

/ Getty

Updated: 5:55 p.m. ET

(CBS News) As Congress prepares to tackle a series of controversial tax and budget issues this fall, Senate Majority Leader Harry Reid is making it clear to his Republican colleagues that Democrats have no plans to cave over extending the Bush-era tax cuts for the wealthy.

In a Tuesday letter, Reid hammered Senate Republicans for allegedly abandoning "common-sense approaches to the fiscal challenges" due to a "fear of retribution from Tea Party extremists."

"The American people want a balanced approach to fiscal policy that combines smart spending cuts with revenue measures that ask millionaires and big corporations to pay their fair share," Reid said in the letter. "Yet a strict adherence to Tea Party ideology among Republicans in both the House and the Senate has so far put that balanced, common-sense solution out of reach."

In his letter, Reid argued that thanks to Tea Party "extremism," a tax deal would be "impossible" before the election - leaving just a few weeks during the lame duck session between the November 6 election and the end of the year to resolve the issue.

"Once Republicans are willing to abandon their commitment to more tax breaks for multi-millionaires and special interests and their plans to end Medicare, I am confident that we can reach an agreement," he added. "Unfortunately, it appears that Republicans' blind adherence to Tea Party extremism is making it impossible to reach this sort of balanced agreement before the election."

If the Bush-era tax cuts are allowed to expire at the end of the year, taxes will go up for all Americans. Mr. Obama favors letting those tax cuts expire for the wealthiest Americans while extending them them for everyone else; Republicans want to extend the Bush-era tax cuts for everyone.

Reid's note was in response to a note from Sen. Orrin Hatch, R-Utah, who wrote Reid on May 17 to protest "the failure of Democrats in Congress and the President to support aggressive policies that will facilitate long-term economic growth and job creation."

The Hatch letter, co-signed by 40 of his fellow Senate Republicans, accuses the Obama administration of a lack of interest in pursuing economic growth, arguing that "Obama and Congress have spent much of the past year advancing misguided redistributionist policies in the name of fairness" rather than addressing the fiscal issues at hand.

"There seems to be little urgency on the part of the Administration to enact pro-growth policies," the Republican letter reads. "Nowhere is the lack of attention to this economic and jobs crisis more evident than with the Administration's cavalier attitude toward the coming fiscal cliff that the Washington Post has termed 'Taxmaggedon.'"

In addition to the expiration of the Bush-era tax cuts, January 1, 2013 also marks the day when $1.2 trillion worth of budget cuts spread across domestic programs and the Pentagon begin to go into effect unless Congress can reach a deal to offset them. Those automatic "sequester" cuts spread over 10 years are the result of the failure of the congressional "super committee" to reach an agreement to reduce the deficit as mandated by the deal last August to raise the debt ceiling. Also set to expire January 1 are some unemployment benefits and a deferment of payment cuts to Medicare physicians.

According to a report released Tuesday by the nonpartisan Congressional Budget Office (CBO), if Congress were to let all Bush-era tax cuts expire and allow the sequester cuts to be enacted, unemployment would rise and "the first half of 2013 would probably be judged to be a recession."

Removing the "fiscal restraint" measures would boost economic growth in 2013, the report says. But it added that "adopting such a policy without imposing comparable restraint in future years would have substantial economic costs over the longer run."

Meanwhile, House Republicans and Democrats appear poised to embark anew on a battle over increasing the nation's debt limit. House Speaker John Boehner has suggested that Republicans won't sign off on a deal unless the increase is matched dollar for dollar with spending cuts - a position that Democrats will almost certainly oppose. Treasury Secretary Timothy Geithner has said that the country will likely hit the borrowing limit at the end of this year, potentially adding more fuel to the fire in the face of an end-of-year fiscal standoff.

In a USA Today op-ed on Tuesday, Boehner reaffirmed his position, accusing Democrats of "inaction" with regard to the nation's debt, and saying the issue is one Congress "cannot ignore."

"[Democrats] went into a state of panic recently when I said we should talk about -- and yes, actually solve -- the debt problem that's hurting our economy," Boehner said in the op-ed. "There have even been suggestions that these calls for action to heal our economy are somehow designed to do it harm."

Pinning America's credit rating downgrade last August on Mr. Obama, Boehner contended that "until we get a grip on our debt, our economy will continue to suffer and we run the risk of another downgrade."

Both sides hope to avoid the disruption that would result from a partisan stalemate in Congress over tax and budget issues at the end of the year. But ahead of November, neither Democrats nor Republicans appear eager to compromise.

Commenting on the CBO report Tuesday evening, Reid said, "We could avoid the so-called fiscal cliff tomorrow if Republicans would agree to extend the middle class tax cuts, which would provide certainty to millions of families and give us ample time to deal with the other challenges facing Congress at the end of the year."

"If Republicans want to walk away from the bipartisan spending cuts agreed to last August, they will have to work with Democrats to replace them with a balanced deficit reduction package that asks millionaires to pay their fair share," he added.

[fiddlestickawshucks]

There shouldn't be any need for a "fight".

If Obama would get our troops out of Afghanistan and cut Afghanistan off financially; and Obama and Congress would stop pi**ing American taxpayayers down the ratholes of traitorius countries who are our enemies; there wouldn't be any need for a fight.

If these countries need foreign aid to enable them to survive we should send FOOD, CLEAN WATER AND MEDICINE: but NO NO NO NO NO MONEY.!!!

[nonpolitico]

Erm, what about THIS Depression?
Could the Democrats begin to follow the example of JFK, whose tax reduction measures ensured years of boom years?
Or Reagan`s measures designed to win the Cold War.
Which was most valuabl;e to the American People.
Can we decide that, then vote for the party that repeats the success ploy?

[occupy_cbs]

Mortar: "Occupy, again, you cannot refute anything he has said."




Sure I can, but I had to set the scene of your plagiarism, and not giving the far-right libertarian credit for the views he was espousing.

Economists are still split right down the middle almost, just like our country today, on what caused the Great Depression and whether Smoot-Hawley or the New Deal made it worse.

It's quite ironic that Hoover ran on tariff protection in 1928 before the downturn, and that the republican congress passed Smoot-Hawley in 1930, when they are the ones with the "free trade" mantra.

While most people think of the Great Depression beginning with the Oct. 1929 stock market crash, many economists see the beginning as August 1929, and a steady decline through March of 1933 when FDR took the oath of office. After that, employment increased steadily until 1937, at about the same exact level at the beginning of the downturn. A short hiccup until 1938 in employment is another matter of debate, but the fact remains it was the huge government spending of WWII that finally gave us full employment and brought us out of the depression.


Again, I ask since you have failed to answer it every time: What did Hoover and the republican congress do over the 3 & 1/2 years before FDR took the reins, besides watch unemployment go through the roof and the money supply decrease by 35%? Why did they do nothing?

[occupy_cbs]

"The 1930s depression was caused by and aggravated by acts of government, and so was the current financial mess that we're in."

Mortar: "That is a non-partisan post by a noted economist."




LOL! Your plagiarized right-wing piece was by Walter E. Williams, a professor of economics at George Mason University, as well as a syndicated columnist and author known for his libertarian views.
The link you failed to provide is here:

http://econfaculty.gmu.edu/wew/articles/11/OminousParallels

-----

Just how does your "non-partisan" plagiarized piece blame government for the Great Depression, when Herbert Hoover was the president and the republicans held the entire congress in 1929.....and for the next 3 & 1/2 years BEFORE Roosevelt took the reins?

Are you saying that Hoover was a BIG government guy and his accomplices in congress, were BIG government republicans?

Just for the record mortimer, the Great Depression DID NOT START in March 1933 when FDR became President, but 3 & 1/2 years earlier, and I still want to know what your GOP party was doing all that time?

BTW, your "noted economist" calls his piece "A Minority View," and that is exactly how the majority of economists see it too!

[occupy_cbs]

In his work, Walter E. Williams builds on the economic theories of F. A. Hayek, Ludwig von Mises, Henry Hazlitt, and Milton Friedman, as well as the previously mentioned Thomas Sowell, and he has said of Ayn Rand's 1967 work Capitalism: The Unknown Ideal that it is "one of the best defenses and explanations of capitalism one is likely to read."

Besides his weekly columns, Williams has become known nationally as a highly popular guest host before the twenty million listeners of the Rush Limbaugh radio program when Limbaugh is away traveling. Reason has called Williams "one of the country's leading libertarian voices."

Regarding Federalism, Williams is in favor of power being in the hands of the states, with limited powers being held by the Federal government.


It is no wonder this far-right extremist blames the government for the Great Depression, and his economic theories come from Ayn Rand, the same fiction writer that 'lyin ryan' worships! LOL!

[TimeToEvolve]

It is hard to believe anyone is stupid enough to try to defend these clearly and blatantly wrong ideas of the right wing. In fact, their ongoing mistakes are so obvious it really shine light on the stupidity of these conservatives.

They actually try to pretend that they have a valid opinion when they are completely wrong from the beginning. It's truly unbelievable and very embarrassing for them.

[occupy_cbs]

occupy_cbs: "Like I asked you before, what did hoover and his republican congress do in the three and a half years BEFORE FDR took office, that did anything but make the Great Depression even worse?"



=====
Mortar: "Occupy, why are you projecting. All you do is post the talking points of your masters"
=====





Thanks for proving my point with your projection and unfounded accusations, since the question must be too hard for you!

GO FISH!

[occupy_cbs]

Still can't answer the question, can you? LOL!

Go back to your partisan buddy, Walter E. Williams, rush limprod's replacement on the radio! LOL! LOL! LOL! LOL!

[TimeToEvolve]

It's OK for Republicons to massively raise the debt but as soon as Democrats do it, it must be stopped. Don't we all think this Republicon-Corporate scam has gone on long enough? Can't we all see what these Republicons are after for us?

[occupy_cbs]

Likewise, it's just fine for republicans to lower taxes, and lower taxes, and lower taxes, and lower taxes, without any regard to the severe revenue problem and larger deficits they create, but when Democrats want to be fiscally-responsible by raising those taxes while cutting spending, the lobbyist grover nitwitt and conservitard ideology gets in their way of doing the "right" thing!

[occupy_cbs]

Mortar: "The actions by Hoover and FDR caused and deppened the Great Depression."



Oh, so after the good times of the roaring twenties and wealth inequality soared all the way to Oct. 1929 when the stock market crashed, all the republicans could do was a tariff act to make it worse, and after 3 & 1/2 years gave the mess to FDR. LOL!

Let me guess.....the republicans probably cut taxes and threw away regulations, just so somebody else could navigate the high unemployment and terrible economic conditions.......sounds just like Jan. 2009 was not much different than in March 1933. LOL!

Now the republicans want to finish the job of destroying our country and economy like they started under the bush/cheney regime!!!!!

I think that vulture capitalist willard, is indeed calling for more tax cuts for the wealthiest Americans like himself, cutting spending to the poorest Americans that are hurting the most, and even cutting more regulations so that "Too Big to Fail" BIG BIZ can have their fascist corporatocracy like they've been dreaming of for decades!

[occupy_cbs]

Hey mortimer -- how is that anything but a demeaning and belittling personal attack on your part, without being able to discuss anything rationally?

You really don't see the correlation between 1933 and 2009? LOL!

[occupy_cbs]

Mortar: "It is not demaning or belittling."


Every post of yours is demeaning and belittling towards another poster, so apparently you're not aware of your own actions!

[occupy_cbs]

chevette: "Now some truth and reality"




LOL! Hey chevette, here's a graph by the BLS showing job gains and job losses from 2002 to 2012.

Please show us all those private-sector jobs that bush/cheney created while we only saw economic growth at a meager 1.9% on average during the 8 miserable years of bushworld! Nice graph that even the uneducated can probably understand, with a huge drop-off after Jan. 2007 that bottomed-out in Jan. 2009.

GEE, those bush tax cuts sure helped the economy so well, or was it that housing bubble since bush wanted everyone to own a house and signed the GOP legislation - The American Dream Down Payment Act of 2003 that subsidized low-income home buyers?

http://data.bls.gov/timeseries/CES0500000001?output_view=net_1mth

[occupy_cbs]

Mortar: "Like FDR and the Congress then did to make the Great Depression worse and last longer."



You sure have those republican talking points down pat! LOL!

The majority of economists say that it was the 1930 Tariff Act by the republicans that made the Great Depression deeper and last longer, but heck, why would somebody like you want to know the facts?

BTW, republican hoover had a republican congress, and the only thing they did in the 3 & 1/2 years from the stock market crash to FDR taking over, was pass an ignorant tariff act that destroyed business.

Guess the republicans in control only made the Depression worse, just like they did in 1999, and passed financial DEREGULATION that repealed most of Glass-Steagall and gave us legal casino betting on Wall Street with risky derivative instruments that tanked our entire economy and gave us the bush/cheney Great Recession!

Yeah.....all republicans know how to do is give us Great Depressions and Little Depressions through tariffs, tax cuts and deregulation!

[occupy_cbs]

Three and half years of republicans sitting on their azzes doing nothing but watching the Great Depression getting worse!

I imagine that's what the bush/cheney regime did in 2005, as the foreclosures started rising and construction ground to a halt soon afterwards!

[occupy_cbs]

Right back at ya mortimer, since all I see you posting is partisan political rhetoric and attacks, with no concept of the truth or reality.

Like I asked you before, what did hoover and his republican congress do in the three and a half years BEFORE FDR took office, that did anything but make the Great Depression even worse?

And then the morons in congress passed the gramm-leach-bliley act in 1999, that got rid of the financial regulations of 1933, just so they could let Wall Street and the banksters tank our economy again!