The phrase “fiscal cliff” refers to automatic tax hikes and spending cuts that are set to take place on January 1. They’re estimated to have an economic impact worth over $600 billion. Federal Reserve Chairman Ben Bernanke says it could send the economy “toppling back into recession.” Can President Obama and House Republicans reach an agreement before the Jan. 1 deadline?

Laura D'Andrea Tyson, S.K. and Angela Chan professor of global management at the Haas School of Business at UC Berkeley; former chair of President Bill Clinton's council of Economic Advisers (1993-1995); currently a member of the President's Council on Jobs and Competitiveness
David Wessel, economics editor at the Wall Street Journal and author of the books "Red Ink: Inside the High-Stakes Politics of the Federal Budget" and "In Fed We Trust: Ben Bernanke's War on the Great Panic"
Alan Viard, economist and resident scholar with the American Enterprise Institute; former senior economist at the Federal Reserve Bank of Dallas and a senior economist on the President's Council of Economic Advisors under George W. Bush

  • Bob Nusbaum

    2 compromise proposals to break the political deadlock on taxes and job creators:

    1) Some, but not all, high income individuals are job creators WITH THEIR PERSONAL INCOME. The ones who are own small businesses, and most of them report that income on Schedule C. So let’s let the rates go up in general on income > $250K, but exempt Schedule C income, or even lower the rate.

    2) Big companies, including my employer, Cisco Systems, are asking for tax-free repatriation of profits held overseas. But there is no guarantee that such profits will be spent in ways that benefit the economy. Compromise proposal: Measure the net increase, year over year, in US employee payroll and headcount, and in investment in US based plant and equipment. The companies can repatriate twice that amount of funds, tax-free. There may be some benefit to other repatriation, so let’s give a much more modest two-year reduction, maybe 5 percentage points, to other reductions to incent them to bring the funds back now.

    I’d like to hear the comments of your panel, since they are a mix of progressive and conservative experts.

    Bob Nusbaum, Los Gatos

  • Hugh

    Paul Krugman just had a column on the 1950s, showing how the economy grew much faster than now and with taxes on the wealthy of over 90%. This totally dispells what conservatives and pro-wealthy economists are proposing as we finish with a recession (much less taxing the middle class as your conservative guest is proposing).

    • Rhet

      Maybe he did, but Krugman remains a servant of the wealthy.

      Remember, the 1% aspire to control *both* sides of the debate. By doing so they limit the range of topics that can be talked about.

  • Bob Fry

    The fact this is called a “cliff” shows the Republicans have a significant advantage going into the negotiations. Given Obama’s history of caving in, I’m pessimistic about the outcome. If nothing were done, tax rates would merely revert to prior levels, and the Pentagon would take a long-due haircut which might reduce the worst of the bloat there.

    Instead, I’m afraid only the very top 0.1% will have a modest tax rate increase, the Pentagon will have a planned 5% increase in spending cut to 2% (for instance), and Social Security etc. will get blamed as usual for budget-busting deficits.

  • washington irving

    The deficit as % of GDP has been shrinking at the fastest pace in 50 years. Our #1 concern must be growing GDP by growing jobs, the deficit will take care of itself. The 10-year bond is at historically low yields. there is nothing wrong with running a higher deficit now to grow the economy.

    Nobody is talking about jobs, that is still the #1 short term issue for the economy. We need to keep focus.

  • cooper29

    This is a completely one sided discussion. The panel of guests is completely stacked to the right. American Enterprise institute- pro big business and on the right. Wall Street Journal- Big business and on the right. Anyone from Bill Clinton’s council of Economic Advisors is a Wall Street Democrat, which is really a Democrat in name only. Remember folks, Bill Clinton brought us the WTO & NAFTA and then deregulation of Wall Street as his last act of goodwill to big business. These people are the ones who worked too send all of our middle class jobs overseas and now they want to cut the safety net.

    If host Dave Iverson really wanted to have a balanced discussion he would have invited someone from the real left. Welcome to National Propaganda Radio, the mouthpiece for big business and the top 1 perrcent.

  • disqus_qH1kynwVAx

    Your guest Mr Wessel seems to be fully on the Left here. Debt isn’t a problem, Obama is triumphant, Republicans are cowed… etc.

    He’s been saying for at least 20 minutes how we don’t need to deal with cuts, we can just kick the can down the road, etc. It’s true, we CAN and we probably will just use inflation to get out of this by stealth taxing everyone, but it’s not something to be proud of.

  • commonsense1234

    Cap rates should be pushed back to the 1990’s level – 20%. The current rate is 15%. We should at least do that. Now if you want to encourage investment – then the govt could offer Investment tax credits to specifically spur growth and job creation in certain industries.

  • commonsense1234

    Personally, I hope your guests are right that the GOP House are going to actually meaningfully negotiate. I seem to doubt it – I don’t think Eric Cantor or any of the tea partiers have learned anything from the last election. I hope I am wrong.

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