Economists say the country will fall into another recession if it goes over the so-called fiscal cliff on January first. That is when Bush-era tax cuts expire and spending cuts kick in. That is unless the president and lawmakers agree on a new plan.
U.S. Senator Bernie Sanders (I-Vt.) on Monday downplayed the cliff crisis scenario. "So it is not that on a certain day the world collapses. That is not the case. We are talking about a ten year -- what the sequestration is over ten years -- and Congress can in fact address it. So to reiterate, I would prefer to address it in the next session of Congress to get a good solution than have a bad agreement this session of Congress," Sen Sanders said.
Sanders believes corporations and the wealthy should pay more taxes and there should be cuts in military spending as a way to reduce the deficit. But cuts to Social Security should not even be considered. "Because Social Security has not contributed a nickel to the deficit, because it is independently funded by the payroll tax and has a $2.7 trillion surplus. so lets get Social Security off the table," he said.
House Speaker John Boehner (R-Ohio) has reportedly said Republicans are ready to compromise when it comes to eliminating some tax loopholes and deductions, but raising taxes is still off the table. U.S. Rep Peter Welch (D-Vt) is not confident that compromise can be reached in this lame duck session and he said that is ok. What is most important, he said, is that the voters have spoken. "They clearly want a balanced approach and that means something that is going to be beneficial to the middle class. In the long run those are two things that give us opportunity to come out with a better resolution. And whether we do that before or after January , it's much more important that what we do it being solid and substantial, then whether it's before or after that fiscal cliff date," he said.
Rep. Welch said, after all, the current Congress had plenty of time to agree on a budget, but chose gridlock instead. And until the new members are sworn in, there is little hope a deal will be reached before the first of the year.