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Fiscal Cliff Can About To Be Kicked Into 2013?

Tyler Durden's picture




 

With precisely 13 working sessions left for Congress in 2012, it is time to ratchet up the can kicking rhetoric a bit. Sure enough, here comes the White House, via the Wall Street Journal, doing just that.

  • WHITE HOUSE IN ADVANCED INTERNAL DISCUSSIONS ON PLAN TO REPLACE SEQUESTER - SOURCES - DJ
  • CONCEPT WOULD KICK MAJOR DEFICIT-REDUCTION TALKS INTO 2013 - DJ
  • CONCEPT WOULD BE PART OF BROADER NEGOTIATIONS ON TACKLING 'FISCAL CLIFF' - DJ

Because when unable to reach a compromise over anything, what is the best option? Just stick head in sand, and demand that the Mr. Chairman gets to work. As for the news above, this is largely irrelevant for the actual fiscal cliff negotiations as the news means there will be no actual consensus and the futures buying algos are once again in for a rude awakening.

From the WSJ:

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.

 

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.

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Fri, 11/16/2012 - 09:02 | 2987176 WaEver
WaEver's picture

Stick head in the sand but make sure to keep your pants on

Fri, 11/16/2012 - 09:05 | 2987185 fonzannoon
fonzannoon's picture

It's the right move. It gives the punter a chance to warm up for the debt ceiling punt.

Fri, 11/16/2012 - 09:10 | 2987200 GetZeeGold
GetZeeGold's picture

 

 

The printer is starting to smoke......is that bad?

Fri, 11/16/2012 - 09:12 | 2987205 JPM Hater001
JPM Hater001's picture

Sinsemilia???

Fri, 11/16/2012 - 09:19 | 2987251 HurricaneSeason
HurricaneSeason's picture

The printer is in New York, not Colorado.

Fri, 11/16/2012 - 09:28 | 2987285 BoNeSxxx
BoNeSxxx's picture

Wait, is this article about Greece?

Fri, 11/16/2012 - 09:37 | 2987307 GetZeeGold
GetZeeGold's picture

 

 

Naw...they have a printer but they ran out of ink a long time ago.

Fri, 11/16/2012 - 09:31 | 2987294 ZippyBananaPants
ZippyBananaPants's picture

Does anybody really think the idiots that watch Dancing with the Stars, and elected our supreme leader are going to know what the word Sequester means?  or Sequestration?  Come on people, "oh they must be doing something important, thats a big word"

 

Fri, 11/16/2012 - 09:51 | 2987368 NeedtoSecede
NeedtoSecede's picture

Gave you a green arrow just for your creative screen name.  Just be careful not to get your banana caught in your zipper.  I hear that is painful.

Fri, 11/16/2012 - 10:08 | 2987444 flattrader
flattrader's picture

Do you really think that Mittens would have ended the FED and dissolved the banking system which has been so very good to him and his real masters?

Niether party will do that.

And Ron Paul was just a Christian Reconstructionist nut case maquerading as a "Libertarian."

Let's go over the cliff and sort it out at the bottom.

Fri, 11/16/2012 - 09:15 | 2987226 fonzannoon
fonzannoon's picture

That is interesting. Are you sure about that? I thought he got away with one raise but the next one they go to war again (and then everyone folds again).

Fri, 11/16/2012 - 09:13 | 2987217 Snidley Whipsnae
Snidley Whipsnae's picture

Next year?... How about now?... "The Federal Reserve is asking 30 big banks to make sure their capital can withstand a deep recession in which the unemployment rate rises to 12%."

"In addition to considering an unemployment rate of roughly 12% — up from 7.9% in October — in the most severe recession scenario, banks must evaluate how their capital buffers would withstand real GDP declining by around 5%."

http://articles.marketwatch.com/2012-11-15/economy/35128582_1_stress-tests-suntrust-banks-central-bank

Fri, 11/16/2012 - 09:18 | 2987245 fonzannoon
fonzannoon's picture

That's just more theatre Snidley. The fed has a blank check out to all those banks. They just call the red phone every once in a while. I am guessing on a Sunday night.

Fri, 11/16/2012 - 09:21 | 2987263 HurricaneSeason
HurricaneSeason's picture

No, we are in a twinkie crisis, this is not a drill.

Fri, 11/16/2012 - 09:38 | 2987316 youngman
youngman's picture

It only matters if you know whose unemployment rate they use.......the DNC´s .....or the BLS´s.....or the real one....

Fri, 11/16/2012 - 09:15 | 2987225 insanelysane
insanelysane's picture

That can will be kicked till at least 2015 and more likely 2017 till O is out of office.  

He never can be blamed.  Notice he has never challenged Congress to come up with a budget during his first term and I haven't heard anything for the 2nd.  This guy doesn't know what a budget is.

Fri, 11/16/2012 - 09:40 | 2987325 narnia
narnia's picture

No way this global Keynesian folly lasts that long. Even if they did everything responsibly, there are too many ticking time bombs on the road over the next couple of years.

The great reset is not something to fight, it's something to embrace. It's going to happen matter what they do.

Fri, 11/16/2012 - 12:39 | 2988212 odatruf
odatruf's picture

Half the time I read "Keynesian" I have to go back to make sure it isn't "Kenyan".  Fucked up times...

Fri, 11/16/2012 - 09:16 | 2987239 The Master
The Master's picture

Ah the European Summit for a Summit for a Summit for a Summit has finally arrived to our shores! Change!

Fri, 11/16/2012 - 09:19 | 2987254 slaughterer
slaughterer's picture

 The bear flash mob should prepare to get vaporized.

Fri, 11/16/2012 - 09:04 | 2987183 Neethgie
Neethgie's picture

Barack kept getting on at europe now copies the tactic

Fri, 11/16/2012 - 09:05 | 2987186 the not so migh...
the not so mighty maximiza's picture

They can kick it but they sure can't lick it.

Fri, 11/16/2012 - 09:12 | 2987210 JPM Hater001
JPM Hater001's picture

They know the can is full right?

Fri, 11/16/2012 - 09:18 | 2987249 the not so migh...
the not so mighty maximiza's picture

I don't think they even know how to balance a equation let alone knowing what level the can is full.  Goverment employees trying to figure out how to keep spending when there is no money left.  That is hillarious.

Fri, 11/16/2012 - 09:57 | 2987392 freedogger
freedogger's picture

Problem is, the can is full of pooh this time. If they try to kick it and aren't careful, they're liable to get covered in an epic blizzard of shit. A virtual shitnami will ensue. Its time to haul in the jib boys, we's about to enter the eye of the shiticane (apologies to the TPB)

Fri, 11/16/2012 - 09:06 | 2987188 DavidC
DavidC's picture

Yes, but Tyler, they're in DISCUSSIONS over CONCEPTS...

DavidC

Fri, 11/16/2012 - 09:08 | 2987195 swissaustrian
swissaustrian's picture

+ 200 Points on the DOW during the last 30 minutes of trading when this news item is gonna be recycled...

Fri, 11/16/2012 - 09:18 | 2987244 GetZeeGold
GetZeeGold's picture

 

 

They flipped the turbocharge to full tilt on the printer....what did you think was going to happen?

Fri, 11/16/2012 - 09:13 | 2987215 fonzannoon
fonzannoon's picture

I don't know NR I feel like this can still has a ways to go. My guess is 20 trillion is the time bomb.

Fri, 11/16/2012 - 09:40 | 2987324 youngman
youngman's picture

I think its when China hits 10,000 tonnes....of gold

Fri, 11/16/2012 - 09:56 | 2987396 a growing concern
a growing concern's picture

When China finally updates their gold holdings status and rolls out some sort of partially gold-backed currency.  US Treasuries will be worth pennies on the dollar overnight and the US will implode and dissolve within a few years.  IMHO.

Fri, 11/16/2012 - 09:12 | 2987207 inevitablecollapse
inevitablecollapse's picture

was there any real doubt that these bozos weren't going to do this?

Fri, 11/16/2012 - 09:14 | 2987218 Quinvarius
Quinvarius's picture

Sysyphean goalpost of the shorts once again moved.  Who would have thought the government would choose not to implode itself, the economy, and the currency?  Oh yeah.  Kaminsky.  Come back in 12 months.  Lucy will have another football for you to kick.

Fri, 11/16/2012 - 09:34 | 2987303 fonzannoon
fonzannoon's picture

the government, the economy and the currency are imploding. the markets are another story.

Fri, 11/16/2012 - 10:37 | 2987552 Taffy Lewis
Taffy Lewis's picture

The mantra before was that the cuts would hit teachers, police, and firemen.

 

Now it's "military programs, embassy security and state aid."

 

Scary but clever.

Fri, 11/16/2012 - 12:42 | 2988226 odatruf
odatruf's picture

Don't forget natural disaster relief.

You'd think efforts that are this transparent and predictable would be laughed at, but they are gobbled up solemnly and without question. Where is the emergency eject lever?

Fri, 11/16/2012 - 09:15 | 2987227 riphowardkatz
riphowardkatz's picture

This isnt about reaching a compromise its about finding a decent solution. This whole f'ing debacle started as a result of years and years of them comprimising. To think that a compromise would do anything but delay and exacerbate the problem is wishful thinking.

Fri, 11/16/2012 - 09:15 | 2987231 youngman
youngman's picture

absolutly no guts.....none at all..no balls...we have elected a bunch of pantie waists..."getting SOMETHING done"..I have heard that ten times now....today..that is the sound bite...something..we just need to give the sheeple something...I said it years ago..I said it six months ago...if you are a corporation..time to move out of this country...HQ elsewhere...growth is elsewhere...sorry...but that is how I feel

Fri, 11/16/2012 - 09:31 | 2987295 HurricaneSeason
HurricaneSeason's picture

An American corporation that can leave the country and hasn't? Too late for that now. Republicans, Democrats and the Bernank all beg China to double the value of their currency and China is coming around by buying gold and asking the BRICs, and any other country that will listen, to not use the dollar for international trade or anything else. The corporations that have already left are holding their profits(probably untaxed) in foreign currency waiting for them to double. The late leavers wont have a chance when cost of moving to China double.

Fri, 11/16/2012 - 09:42 | 2987331 youngman
youngman's picture

They are not holding their cash offshore because it will douple in USA dollars...they are holding it offshore because that is where the growth is....you build a factory in India...not Michigan....in Asia...not California...in South America...not Chicago.....

Fri, 11/16/2012 - 10:23 | 2987496 Oldwood
Oldwood's picture

Anyone who acts responsibly in government will shortly be joining Ron Paul in his retirement community.

Fri, 11/16/2012 - 09:16 | 2987234 fonzannoon
fonzannoon's picture

PM's I assume are skyrocketing on this news right?

Fri, 11/16/2012 - 09:19 | 2987257 GetZeeGold
GetZeeGold's picture

 

 

Not just yet.....we can't have panic.

Fri, 11/16/2012 - 09:33 | 2987301 HurricaneSeason
HurricaneSeason's picture

No, but gold is up 9% for the year and will close higher while the DOW will show negative returns for the pension plans as we head into the debt ceiling. Gold usually sells off into a stock market drop initially, it really hasn't done that much this time.

Fri, 11/16/2012 - 09:45 | 2987344 youngman
youngman's picture

I agree..the Vanguard funds have to sell as people bail on the totalmarket funds...there are many of them.....but the individual is not selling I think..I am buying....

Fri, 11/16/2012 - 09:16 | 2987237 miker
miker's picture

Everything is pointing towards a signficant contraction leading to depression conditions.  Everything.

Fri, 11/16/2012 - 09:33 | 2987300 Water Is Wet
Water Is Wet's picture

Welcome to the last 4 years.

Fri, 11/16/2012 - 09:49 | 2987362 Offthebeach
Offthebeach's picture

It's not the new normal anymore, it is just normal. In a few years, today's normal will be thought of as that good old normal days.

Wait until Hussein's forth emergency term when on your windup radio you listen to him talk about the top 1% can bean owners, toilet paper roll boarders and flaunters of newish bicycle tires.

Fri, 11/16/2012 - 09:18 | 2987243 HurricaneSeason
HurricaneSeason's picture

The debt ceiling wont be kicked. Tick tock, tick tock.

Fri, 11/16/2012 - 12:44 | 2988239 odatruf
odatruf's picture

I wish I had your faith. Even if the Tea Party members hold the line, the establishment GOP will join with a majority of Democrats in the House to extend and pretend.

 

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