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Jerry Seib, WSJ Washington bureau chief, weighs in on the fiscal cliff and why he believes a deal will be reached.
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-- -- enjoyed it -- Wall Street Journal Washington bureau chief Jerry side Jack take a look conservative cut commentator Bill Kristol.
Said on that same show quote it won't kill the country if we raise taxes on millionaires.
Are we seeing the first signs of actual compromise to the Democrats start -- -- Republicans start to soften.
Well I think -- the Republicans have softened a little bit and you might be seeing the beginnings of a compromise -- but you know there's leadership and -- -- follower ship you know I think what that.
Republican leadership is doing -- sort of signaling look.
There's a way out of this box we now want a way out of this box and it is by coming to an agreement.
That says we're rich people wealthy Americans will pay more in taxes without saying their tax rates will be raised that's always been the deal that was there to be had just couldn't make it happen last year.
I think he -- -- two issues -- one is the Republicans are gonna look leaders -- look over their shoulders and see whether.
People in the house caucus in particular are willing to follow along or whether they're gonna consider that to be just a back -- tax increase.
And I think on the democratic side the president has to look over his shoulder and find out whether the people in his party will say to themselves look.
You won the election President Obama with a pretty strong majority in the Electoral College we picked up two seats in the senate.
We campaigned on a -- and a platform that said tax rates should be raised for the wealthy not just Texas.
So that's organized dig and demand so we'll see but as you say first signs are pretty good.
Get out much of the focus is on this raise tax rates on the rich over 250 K.
That would bring in an extra eighty billion dollars or so a year and -- spending -- one point one trillion dollars more.
In a year than we take -- tax revenue why so much focus on eighty dollars on 11100 aren't we kind of get.
I'm missing the point.
Well I think you're the point is being missed a lot of ways frankly I think that's one way to port which the point is being next.
I think that the bigger point is you know you gotta move beyond just resolving this particular dispute about what the tap top tax rate ought to be.
And get on -- serious tax reform next year everybody will tell you that the question how you get there.
That's one thing the second thing is you do have to deal with entitlements as well as taxes you know this is -- a two part deal and I think is what got lost last year was -- there was probably more agreement on doing some things some potentially tough things on entitlements like for example.
Raising the eligibility age for Medicare.
Then was commonly realized you gotta get back to that now and make that part of a package as well where they could do all of that before the first of the year or just make a down payment that's -- real question.
Congressional Budget Office says if we let all those tax rates go up in January the economy shrinks zero point 5% the first quarter if we let the tax cuts continue.
The economy grows one point 5% so this really about the economic growth or is it more macho vs -- -- Well I think ultimately it's gotta be about economic growth for both parties you know did you get an economic growth they -- -- deficit reduction you gotta convince the markets that your interest in doing both of those and -- found that magic formula.
That allows you to do both of those things that that's what's tricky about this.
I think everybody that's why I don't think we're gonna go off the fiscal cliff by the way I think everybody will get to the point where they realize they don't wanna be in the first quarter of next year taking responsibility for creating a double dip recession.
That's a pretty scary prospect for anybody but predicted for a politician in Washington so.
That's why I think some of this optimism is not that badly placed -- -- our reason for hope good job thanks a lot Jerry side loaded up -- guys.
