The federal fiscal cliff is looming closer. If some type of budget agreement isn't reached between the president and Republican congressional leaders within the next five weeks....January first will mean an increase in payroll taxes for all of us and a massive decrease in military spending. We were able to speak with Senator John Thune and he told us Republicans are ready to work...but they say so far, the president hasn't come to the table.
So what if no agreement is reached? What if, on January first, defense spending is cut and the amount we pay in federal tax goes up? It would be more than a personal hardship, says South Dakota Senator John Thune...who tells us if the U-S goes over that financial cliff...it would be a horrible bumpy ride. "This is a very important issue to our economy. All the experts tell us that if we go over the fiscal cliff it could plunge us into a recession. It could drive unemployment up over 9% and reduce the take home pay for a lot of Americans."
Those fears of a newer, deeper recession and more people out of work is a nightmare scenario for leaders on both sides of the aisle. In recent days, several Republicans have signaled a willingness to increase the tax rate for Americans making more than 250-thousand a year....something they dug their heels in on during the presidential campaign. Thune says in return for that proposed compromise...Republicans want the president to reform Social Security, Medicare and Medicaid...to bring those programs costs in line. "We've got to reform them today or they will take us into a train wreck in the not too distant future."
And Thune re-iterated his call for compromise during an appearance with Wolf Blitzer on CNN. "Our members want to see spending reductions. They want to see a commitment on entitlement reform and so far we haven't seen that from the president."
It will be interesting to see if there is any movement from the White House after tomorrow....when President Obama is scheduled to have lunch with the man he defeated for the presidency this month....Republican Mitt Romney.