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| Our fiscal cliff quiz explained: how did you do? | Our fiscal cliff quiz explained: how did you do? |
| (8 days later) | |
| Thanks for taking our fiscal cliff quiz. Depending on your score, you may have some questions about what's actually going on with said cliff. So here's the latest update from finance editor Heidi Moore. | Thanks for taking our fiscal cliff quiz. Depending on your score, you may have some questions about what's actually going on with said cliff. So here's the latest update from finance editor Heidi Moore. |
| Read up, then use the comments thread below to discuss the quiz. | Read up, then use the comments thread below to discuss the quiz. |
| Q: OK, it's December 18. Where are we with the fiscal cliff? | Q: OK, it's December 18. Where are we with the fiscal cliff? |
| There has been great progress in the past two days, and by "great progress" we mean: at least we now have two competing proposals. There's one from the White House and one from House speaker John Boehner, who is leading the negotiations for Republicans. | There has been great progress in the past two days, and by "great progress" we mean: at least we now have two competing proposals. There's one from the White House and one from House speaker John Boehner, who is leading the negotiations for Republicans. |
| The new White House offer, as widely reported, is this: raise tax rates for those making $400,000 and over; lower cost-of-living increases for people getting social security; and allowing the payroll tax cuts in place for the past two years to lapse. This is significantly different from the White House's previous stance, which was: raise tax rates for those making $250,000 and over; don't touch social security; and, presumably, keep the payroll tax cuts in place. | The new White House offer, as widely reported, is this: raise tax rates for those making $400,000 and over; lower cost-of-living increases for people getting social security; and allowing the payroll tax cuts in place for the past two years to lapse. This is significantly different from the White House's previous stance, which was: raise tax rates for those making $250,000 and over; don't touch social security; and, presumably, keep the payroll tax cuts in place. |
| Boehner has also changed his position considerably. A few days ago, Boehner offered to make two concessions. The first: that he would agree to tax hikes for people making over $1m. The second: that he would not prevent the US from raising its borrowing limit, or debt ceiling. These were both key points of progress, since previously Republicans had refused to hike taxes on anyone making over $250,000; Boehner himself had also suggested that it would not be a bad idea to hold back the debt ceiling vote. | Boehner has also changed his position considerably. A few days ago, Boehner offered to make two concessions. The first: that he would agree to tax hikes for people making over $1m. The second: that he would not prevent the US from raising its borrowing limit, or debt ceiling. These were both key points of progress, since previously Republicans had refused to hike taxes on anyone making over $250,000; Boehner himself had also suggested that it would not be a bad idea to hold back the debt ceiling vote. |
| This morning, Politico reported that House Republicans are moving to create their own fiscal cliff bill, which is the equivalent of tilting at windmills: even if they get it past the House, it will not pass the Senate and certainly won't be signed by the president. | This morning, Politico reported that House Republicans are moving to create their own fiscal cliff bill, which is the equivalent of tilting at windmills: even if they get it past the House, it will not pass the Senate and certainly won't be signed by the president. |
| Q: Is it time to panic? | Q: Is it time to panic? |
| No, but that's not stopping anyone. Small businesses, consumers and big businesses all have been showing less confidence in the economy, and this week, Federal Reserve chairman Ben Bernanke said the economy has already been suffering as a result of the uncertainty around the fiscal cliff. President Obama, who is scheduled to go to Hawaii, may be panicking about missing his vacation, but that's minor in the context of long-term American solvency. | No, but that's not stopping anyone. Small businesses, consumers and big businesses all have been showing less confidence in the economy, and this week, Federal Reserve chairman Ben Bernanke said the economy has already been suffering as a result of the uncertainty around the fiscal cliff. President Obama, who is scheduled to go to Hawaii, may be panicking about missing his vacation, but that's minor in the context of long-term American solvency. |
| Q: Why aren't the negotiations public? | Q: Why aren't the negotiations public? |
| Both the president and Speaker Boehner seem to feel that they will be able to speak openly without cameras around. Even so, both are in front of cameras constantly, making statements and holding press conferences to say to the public presumably what they have said to each other. | Both the president and Speaker Boehner seem to feel that they will be able to speak openly without cameras around. Even so, both are in front of cameras constantly, making statements and holding press conferences to say to the public presumably what they have said to each other. |
| Q: What are the next steps in the negotiations? | Q: What are the next steps in the negotiations? |
| Most likely, the next steps are just like the last steps: more delays. Senator Bob Corker, a Republican, said on CNBC this morning that there will be no fiscal cliff deal this week. Even though the deadline is in three short weeks, there seems to be no sense of urgency. President Obama is scheduled to go on vacation this week, returning on January 6; it's not clear if he will keep to that schedule or delay the vacation. Speaker Boehner headed to Ohio last weekend with a snarky challenge to President Obama on the negotiations: "Ohio has both cellphone service and airports – so if the president wants to talk or meet, it won't be a problem at all." | Most likely, the next steps are just like the last steps: more delays. Senator Bob Corker, a Republican, said on CNBC this morning that there will be no fiscal cliff deal this week. Even though the deadline is in three short weeks, there seems to be no sense of urgency. President Obama is scheduled to go on vacation this week, returning on January 6; it's not clear if he will keep to that schedule or delay the vacation. Speaker Boehner headed to Ohio last weekend with a snarky challenge to President Obama on the negotiations: "Ohio has both cellphone service and airports – so if the president wants to talk or meet, it won't be a problem at all." |
| Now that there are actual proposals on the table, however, there is more meat for the talks – and more than one pundit has pointed out that Boehner has every incentive to delay a deal until the last minute. That will allow him to make some concessions and look like he was forced into them. If he agrees to make concessions "too early" (and yes, three weeks before the deadline is sadly considered "early") then he will get a lot of blowback from his Republican compatriots for looking weak, and he needs them to vote for him early next year so that he can stay speaker of the House. | Now that there are actual proposals on the table, however, there is more meat for the talks – and more than one pundit has pointed out that Boehner has every incentive to delay a deal until the last minute. That will allow him to make some concessions and look like he was forced into them. If he agrees to make concessions "too early" (and yes, three weeks before the deadline is sadly considered "early") then he will get a lot of blowback from his Republican compatriots for looking weak, and he needs them to vote for him early next year so that he can stay speaker of the House. |
| Q: What does the rest of the world think of this? | Q: What does the rest of the world think of this? |
| They think we're ridiculous, and that we're playing fast and loose with not just our own economy, but that of the world. IMF chief Christine Lagarde said the US is becoming its own worst enemy by delaying a decision. Still, this is a case of pots and kettles. It's not like Europe can really look down on us: they've been delaying the same hard decisions on spending cuts for over three years and have been on the brink of a meltdown many times since. Should we be smart enough to look at their example and avoid the same troubles? Yes, technically. But this is the nature of negotiations: they go down to the wire. | They think we're ridiculous, and that we're playing fast and loose with not just our own economy, but that of the world. IMF chief Christine Lagarde said the US is becoming its own worst enemy by delaying a decision. Still, this is a case of pots and kettles. It's not like Europe can really look down on us: they've been delaying the same hard decisions on spending cuts for over three years and have been on the brink of a meltdown many times since. Should we be smart enough to look at their example and avoid the same troubles? Yes, technically. But this is the nature of negotiations: they go down to the wire. |
| Now that you've read up on the basics, why not take the test again and see if you improve? | Now that you've read up on the basics, why not take the test again and see if you improve? |
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