Sen. Mike Johanns holds out hope that an agreement might still be reached to avoid plunging off the fiscal cliff.
President Obama has returned to Washington after calling Democratic and Republican Congressional leaders about what can be done to extend Bush-era tax cuts and avoid deep, automatic budget cuts January First.
Johanns says no agreement will be reached until the president agrees to cut spending.
“We cannot raise enough revenue to deal with the spending that is going on, no matter how much revenue we hit rich people for,” according to Johanns. “We could probably take everything they earn and we still have a spending problem.”
President Obama has insisted he presents a balanced approach. He also has adamantly insisted that the rich pay higher taxes. Initially asking that the Bush-era tax cuts be extended for those making less than $250,000, the president has modified his proposal and raised the threshold to $400,000.
Speaker Boehner had attempted to bring to the House floor a measure to extend the tax cuts to all making below $1 million a year, but when it became evident he didn’t have the votes, the House adjourned for the Christmas break. It has yet to return to Washington.
The Senate is in session today.
The deadline fast approaches. If nothing is done by Monday, higher tax rates go into effect January 1st. Also, deep automatic budget cuts will go into effect, which could trigger the so-called “fiscal cliff” a term coined by some economists to describe the effect the combination could have on the economy.
Johanns sees spending as the biggest problem facing the country.
“If nothing is done, we are going to continue to see ourselves spending ourselves into bankruptcy,” Johanns says. “So, it’s important at this point that we do all we can to try to get an agreement, but try to do so in a way that really does take a step in the right direction to start putting solutions in place.”
Though things look bleak, Johanns retains his optimism.
“Sometimes at the most dark moment in negotiations when it seems like all hope for solution has passed, something will emerge,” says Johanns. “I hope that that something will emerge and we can avoid the fiscal cliff.”