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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 | Link to Comment WaEver
WaEver's picture

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

Fri, 11/16/2012 - 09:05 | Link to Comment 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 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

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

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

Sinsemilia???

Fri, 11/16/2012 - 09:19 | Link to Comment HurricaneSeason
HurricaneSeason's picture

The printer is in New York, not Colorado.

Fri, 11/16/2012 - 09:28 | Link to Comment BoNeSxxx
BoNeSxxx's picture

Wait, is this article about Greece?

Fri, 11/16/2012 - 09:37 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 - 09:13 | Link to Comment negative rates
negative rates's picture

Wrong on the ceiling punt. In order to never have to be held hostage to the debt ceiling again, any president can now raise the limit with out the approval of anyone. We had to pass it so you could find out what's in it type legislation. No, the cliff is the only game in town.

Fri, 11/16/2012 - 09:15 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment HurricaneSeason
HurricaneSeason's picture

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

Fri, 11/16/2012 - 09:38 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment slaughterer
slaughterer's picture

 The bear flash mob should prepare to get vaporized.

Fri, 11/16/2012 - 09:04 | Link to Comment Neethgie
Neethgie's picture

Barack kept getting on at europe now copies the tactic

Fri, 11/16/2012 - 09:05 | Link to Comment 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 | Link to Comment JPM Hater001
JPM Hater001's picture

They know the can is full right?

Fri, 11/16/2012 - 09:18 | Link to Comment 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 | Link to Comment 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 | Link to Comment DavidC
DavidC's picture

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

DavidC

Fri, 11/16/2012 - 09:08 | Link to Comment 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 | Link to Comment 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 - 09:09 | Link to Comment negative rates
negative rates's picture

That rusty old can can't be kicked any further, without an explosion. And who wants to lose their foot when rust never sleeps?

Fri, 11/16/2012 - 09:13 | Link to Comment 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 | Link to Comment youngman
youngman's picture

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

Fri, 11/16/2012 - 09:56 | Link to Comment 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 | Link to Comment inevitablecollapse
inevitablecollapse's picture

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

Fri, 11/16/2012 - 09:14 | Link to Comment 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 | Link to Comment fonzannoon
fonzannoon's picture

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

Fri, 11/16/2012 - 10:37 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment 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 | Link to Comment fonzannoon
fonzannoon's picture

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

Fri, 11/16/2012 - 09:19 | Link to Comment GetZeeGold
GetZeeGold's picture

 

 

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

Fri, 11/16/2012 - 09:33 | Link to Comment 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 | Link to Comment 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 | Link to Comment miker
miker's picture

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

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

Welcome to the last 4 years.

Fri, 11/16/2012 - 09:49 | Link to Comment 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 | Link to Comment HurricaneSeason
HurricaneSeason's picture

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

Fri, 11/16/2012 - 12:44 | Link to Comment 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.

 

Fri, 11/16/2012 - 09:19 | Link to Comment AU5K
AU5K's picture

Umm, the twilight movie is opening... congress on hold.  fiscal cliffy thing can wait.

Fri, 11/16/2012 - 09:20 | Link to Comment Kaiser Sousa
Kaiser Sousa's picture

and from this news the following should be the logical reaction....

The dow erases losses n the futures right before the open in NY...

Gold and Silver continue to decline on the phony paper exchanges....

GOT IT!!!!!

Fri, 11/16/2012 - 09:21 | Link to Comment northerngirl
northerngirl's picture

Is there really any doubt that they will find away to kick the can down the road?  This is all both parties know how to do.  We get the government we deserve. 

Fri, 11/16/2012 - 09:33 | Link to Comment lolmao500
lolmao500's picture

Obama would do an executive order and his supporters would say it's awesome.

Fri, 11/16/2012 - 09:39 | Link to Comment timbo_em
timbo_em's picture

This more or less confirms that from a politician's point of view the budget is broken beyond repair. Nobody in DC has the cojones to tell the truth (mandatory spending exceeds federal revenue and federal revenue will not improve) and risk his/her job and so they will punt every year and Benny B and his gang will try his very best to create enough paper wealth to support them.

Fri, 11/16/2012 - 09:50 | Link to Comment TwoHoot
TwoHoot's picture

What Budget?

Fri, 11/16/2012 - 09:56 | Link to Comment timbo_em
timbo_em's picture

You're right. When I wrote budget, actually I meant "budget".

Fri, 11/16/2012 - 09:59 | Link to Comment NeedtoSecede
NeedtoSecede's picture

"Budget? We don't need no sticking budget!"

As pods has said so eloquently before, the nation has turned into a "fucking clown circus."

 

Fri, 11/16/2012 - 10:03 | Link to Comment Vince Clortho
Vince Clortho's picture

Budget?  What Budget?

We don't need no stinkin Budget.

We got Printers!

The whole budget drama is theater for the muppets.

Fri, 11/16/2012 - 10:08 | Link to Comment Ignorance is bliss
Ignorance is bliss's picture

The trick is to get close to one of the Gov't money spickets. As long as Washington is printing they release funds to their crony capitalist business supporters. You need to be in the following sectors: Defense, Obamacare, big pharma, big agriculture, among others. If you're in one of the favored sectors then you have a chance at converting fiat into tangible before the dollar inflates into double digits.

Fri, 11/16/2012 - 10:13 | Link to Comment XitSam
XitSam's picture

What did I tell you?

Fri, 11/16/2012 - 10:18 | Link to Comment Gimp
Gimp's picture

No different than the Greeks - duck and dive, dodge and weave, pretend and extend, dance the floor, spin the bottle....let's not solve a thing until out of office..Yipeee

Fri, 11/16/2012 - 10:50 | Link to Comment vote_libertaria...
vote_libertarian_party's picture

No updates from the credit agencies?  It would be interesting if any of them slap the politicians in the next few days.

 

"Mr.!  If you push this back I''m going to give you such a spanking..."

Fri, 11/16/2012 - 10:59 | Link to Comment venturen
venturen's picture

Taxpayers won't be kicked in the can....they will be kicked in the Balls!

Fri, 11/16/2012 - 11:11 | Link to Comment zebrasquid
zebrasquid's picture

Kick the can right down Pennsylvania Avenue, right past the opulent inaugural coronation that we will no doubt see in January, and keep kicking until the King and his Queen and their hundreds of 

best friends have returned from their tax-payer paid 5-Star vacation in Monaco or wherever they are heading for their much deserved R&R.

Michelle is good and tired of starving herself, so just be patient.  They'll get around to this cliffy thing in their sweet time.. After all, they won, right? You lost.  To the victor goes the Twinkies.

Fri, 11/16/2012 - 12:12 | Link to Comment Rick Blaine
Rick Blaine's picture

Of course their going to kick the can down the road again...

This whole is thing a big F-ing joke.

Isn't Obama only talking about raising like $40B per year in tax revenue from the rich?

$40B?

...like 3% of the current deficit?

Anyone who thinks that's going to make a difference (assuming my numbers are right) is out of their F-ing mind.

And there is no way that either of these clowns, Obama or Boehner, REALLY want to cut any spending...

They should just raise the debt ceiling right now and get it over with.

 

Fri, 11/16/2012 - 12:52 | Link to Comment odatruf
odatruf's picture

During the Clinton years, the President would submit a budget to Congress in January, the GOP controlled House would make a big show of stamping it Dead on Arrival (no joke, they even had an actual rubber stamp make up that they used for a photo op) and calling it fiscally irresponsible.  Hahaha, good time and much merriment were had.

Then the House would start work on a budget and the GOP members would start to demand their pound of flesh and the Dem members would demand their half pound (they were in the minority, afterall) and then the Senate would do the same (each gets their pound plus, they're Senators afterall) and during the whole time, they'd negotiate it all with the White House.

In the end, the final plan would end up being higher than what Clinton sent in the first place.

Just take whatever Obama puts on paper and pass it now; we'll save money in the long run.

Fri, 11/16/2012 - 12:28 | Link to Comment LooseLee
LooseLee's picture

Ratings downgrade, Anyone? Sure hope so. Shorts performing nicely as they should have since 2008....

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