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Greg Valliere of Potomac Research Group talks politics, the fiscal cliff and tax reform.
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Well we may have some news soon on the bush tax cuts extension this on the heels of -- got his testimony yesterday.
-- -- fiscal cliff may happen sooner rather than later.
Potomac research groups Greg value -- here with us with more the fiscal cliff and what it means for the economy great thanks for joining us.
Breaking here rests its lawyer Melissa -- New York hi Greg all right so -- do you think that Jamie -- Given his stature reinforcing this issue area -- -- -- -- -- Well -- fiscal click on the front burner in Washington.
Always on the front -- you can be sure of that and I think one of the reasons why the economy is slowing.
Is all of this anxiety if you're a business you wanna hire people do you wanna buy new equipment if you're an ordinary consumer do you want to make big decisions.
With the paralysis we have right now in Washington.
-- -- and you agree with diamonds and that the fiscal cliff is hitting us sooner rather than later that it's not about the end of the year that.
Businesses the markets are all holding back now.
Yes that's today how do you -- -- unfolding.
I think it's right now and I agree with Bill Clinton Bill Clinton committed a cardinal -- he spoke the truth he spoke candidly -- retracted.
But his point of course is valid and that is -- economy this fragile with a president -- -- think -- the underdog.
The the idea of extending the bush tax cuts would be electrifying would be great for the market I think you could -- 2000 of the to the Dow would be great for the economy be great for Obama's reelection prospects but still the White House and Pelosi and Harry Reid refused to consider -- -- get till August I think all options will be on the table by them.
Hey rich do you -- -- -- -- did you hear -- report came right yeah or you -- -- saying that tax cuts for a year what do you think about that.
I think it makes a lot of sense Melissa -- at some point we are gonna get tax reform probably later rather than sooner.
But if that if somebody announced this in the next month or -- the the impact again would be electrifying.
And I think with the economy this week it would be a a great great positive.
At some point somebody has to tell Barack Obama if you don't do this you're gonna lose.
How tough is it go to get a deal in congress and the administration Greg -- -- talking for months about how this functional.
This government is what got happened for it for this election.
Defining moment to occur.
The White House has to realize they're trailing I don't forget really Barack Obama yeah Obama's behind Ron you right now.
Yes I do absolutely way too early to say for sure Obama is going to lose but Obama has been in free fall in the last five weeks run he's done pretty well.
One other thing on the taxes -- Barack Obama did this a year and a half ago.
He extended the bush tax cuts for two years he did not give the left got a very upset but where -- they gonna go so he's already done it once.
What do you think it's likely have been Democrats -- along -- that this time.
Slim very unlikely you know -- and there are big ideological.
Theological.
Reasons why they probably won't it makes too much sense so anytime you talk about something logically that makes sense it probably won't happen.
C and therefore issues right when we refer to the fiscal cliff you've got tax Extenders such as the R&D tax credit.
-- defense domestic spending bill extension of the debt ceiling let's talk about this for a little while term.
What are your thoughts on -- how do we do admit that think you had mentioned earlier the idea of extend the bush tax cuts in exchange for raising the debt ceiling again but.
You know could that have broader implications for economy and markets.
Sure I could see that as part of the deal would mean we all remember the debacle of last late July and early August.
Everybody was talking about government default credit rating downgrades but for the US.
We're gonna go through this all over again in December if they don't cut a deal.
And I think if we could see a package extending the bush tax cuts in exchange for.
A debt ceiling extension again I think it would be worth a couple of thousand points on the Dow.
You know getting back -- this idea of this dysfunctional congress do you think they learned something last time around though the last fight to raise the debt ceiling.
Do you think it'll be easier this time around because this fiscal -- is.
Getting so much traction.
Well as as you guys know especially -- Lewis and I've had done done a lot of work together.
Did you guys know I mean I'm very cynical and I think that.
These guys are so dysfunctional that they didn't learn their lessons what they really care about is -- sound bites.
My sound bank is better than your sound -- so its sister political posturing more than anything else.
