[Infowarrior] - OT: DC poised to kick the can on fiscal clfif

[Richard Forno]

These bipartisan clowns will destroy this country....they can't even abide by their own ideas and timelines to fix the problems they themselves created.  #fail  --rick


White House in Talks to Replace Spending Cuts  

By DAMIAN PALETTA and CAROL E. LEE

http://online.wsj.com/article/SB10001424127887324556304578122690719872244.html#printMode

White House officials are in advanced internal discussions about a plan to replace the sweeping spending cuts set to begin in January with a smaller, separate package of targeted spending cuts and tax increases, people familiar with the planning said.

The spending cuts, known as the "sequester," will begin in January unless the White House and Congress intervene. They would cut spending by roughly $100 billion next year, and then for eight additional years, hitting a number of federal programs, including military programs, embassy security and state aid.

Critics of the cuts, which were put in place by last year's Budget Control Act deal to raise the debt ceiling, have said they could derail what remains a weak economic recovery. Democrats and Republicans have separately tried to design plans to replace the sequester.

The discussions are just one part of a complicated set of possibilities as Washington deals not only with the looming spending cuts but also the expiration of the Bush tax cuts and other traditional year-end priorities, such as finding a way to halt the scope of the Alternative Minimum Tax. While moving along separate tracks, it is also possible these three policy issues could be wrapped up into one universal deal.

The White House is set to start negotiations with Republican and Democratic congressional leaders Friday.

By postponing the sequester cuts, Washington would essentially push off a number of large deficit-reduction decisions into mid-2013. This would include a long-term plan to replace the remaining sequester cuts, a plan to overhaul the tax code, and separate decisions about how to restructure Medicare and Medicaid.

The plan that has been discussed by White House officials is similar in many ways to what lawmakers have discussed. It would terminate the spending cuts for a period of six to 12 months, and replace the cuts with more targeted reductions and revenue increases. House Republicans have proposed a similar model, though they have called for terminating the cuts to defense programs only and haven't accepted a deal to include tax increases as part of any package.

A White House spokeswoman declined to comment.

The "sequester" is part of the so-called "fiscal cliff," roughly $500 billion in spending cuts and tax increases set to begin in 2013 unless policy makers act by the end of the year. A short-term plan to temporarily terminate the sequester cuts is part of a framework the White House is pursuing, which also includes allowing the Bush-era tax cuts for the top two income brackets to expire at the end of this year.

Similarly, policy makers must reach agreement on a number of other tax measures by the end of this year, particularly what to do about the already expired alternative-minimum tax, which lapsed in 2011 and could lead to large tax increases on many Americans if not addressed.

Write to Damian Paletta at damian.paletta at wsj.com and Carol E. Lee at carol.lee at wsj.com

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Just because i'm near the punchbowl doesn't mean I'm also drinking from it.