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Diving Off the 'Cliff'?

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    FOX News contributor Monica Crowley gives her outlook for the fiscal cliff.

  • Duration 5:21
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-- -- -- -- As -- of now a full -- ride over the cliff looks a lot more likely.

The Republicans will not raise tax rates the president he's not gonna -- spending cuts and if you -- the media this morning it is the Republicans who are getting the blame.

Joining us now Monica Crowley -- news of Bermuda and Monica why do you think that the president won't -- to go over the -- fixed.

Like yes yes well first it looks like the house GOP leadership actually went through the Mayan apocalypse for the rest of us from -- last night.

From the president wants to go over the fiscal cliff he always has for two reasons -- number one.

He wants all of the rates to grow up not just on the one or 2%.

Top earners he wants everybody's tax rates to go up points.

Even if you were to confiscate 100% of all of the assets of that's -- -- why does the government for blindness and -- days.

Because he -- -- everybody usually -- started to -- revenue to pay for his monstrous ever growing ever -- and his government Stuart.

And he knows that the real money is with the middle class snout with a 1% again confiscate a 100% of the top 1% assets and income.

You fund the government for about eleven days the real money is with the middle class and their rates to go up.

The second part of this is he wants the defense sequester.

500 billion dollars taken -- -- defense over the next ten years that's in addition to the already 500 billion that's been taken -- -- defense.

He wants that part of the equations as well that's getting no ink.

He wants to go over the cliff so if -- John Boehner and your negotiating partner wants to go over the -- you're going over the cliff OK.

Let's advances let's take this little foot thought okay -- saying that the also -- going over the cliff that will be massive tax increases and huge spending cuts generally the first the odds on how very very high.

And the president wants -- to go over the -- OK got it now fastball.

December 27 the senate comes back into session.

Harry Reid may propose a series of measures.

Misspoke but the the president wants a put it to a vote.

He may well get the votes and yes we're gonna raise taxes on everybody over 250000.

Then walked.

He may he may not remember this is senate under Harry Reid that is not proposed budget in about three and a half years going on for years so we -- -- that he may not.

What ever he does put in place should he do that -- is exactly what the president would want.

So that means to act as an installment -- This weekend -- to their house Republicans reject -- house they rejected over the cliff OK now.

I'm -- collect my -- -- is this is moving really really quickly.

If that happened because the senate has a measure.

The Republicans in the house defeated at that point the stock market recently.

Takes a -- I mean really when wade at we're starting to see some the -- we are warning it could that not forced the hand of the politicians on both sides of the -- When Wall Street sells off hundreds of points politicians take notice couldn't back.

Prompt some compromise.

It's -- here we have this massive.

Debt bomb that is clicking away every single day sixteen point three trillion dollars in the national debt.

In annual deficits over -- dollars.

That doesn't get their attention but you're exactly right the stock market.

It's the most politically toxic element of this entire equation.

Because it affects every single American -- whether you're invested directly in the market or 401K.

Yet the pension.

You're in the market and some white back those found that -- capture their attention.

So so we may get compromise and it got to be the catalyst maybe appraising a big sum up as a catalyst and it was in September of 2008.

When the Republicans in the house rejected the first edition of -- The Dow Jones average went down 780.

Points I think it was in a matter of -- He immediately they resubmitted -- and it passed and up what the market yes you could see that happen again.

But I'm glad to raise the -- example because what usually happens -- not all of our politicians and up in this position and this is no way to run a super -- -- but here we are.

Would they -- this position where they're running around with their hair on fire.

You went up with a lousy deal.

Yes a lot of people say TARP wasn't necessary or should not have been done -- that particular way you end up with the bad deal that only postpones the inevitable and here we are again.

I just want to make sure all our viewers are investors that looking in the market very carefully.

And I'm saying hold on a second if we get a big stock sell off.

That could be the catalyst for some kind of compromise -- a lousy deal I'm with you on that but it will be a compromised and the market would rebound -- go up by.

Limit until awesome enough story and here's -- question when I was joining you on this program on Wednesday we were reporting that six.

Had said look if you go over the cliff.

You're facing another downgrade.

If you -- lousy deal that doesn't deal with the long term issues of spending.

Cuts and entitlement reform we might get downgraded any -- -- -- -- deal.

May just end up being a lousy deal and you've got a fiscal apocalypse anyway it just kicks the can.

And I think a lousy deal is still possible but it will be a lousy deal and you just kick it down the road -- maybe another band David again this is no way to rent superpower in fact Stuart.

It's a way to turn a superpower into a former -- Monica Crowley everyone's -- this on this Friday morning thanks very much like overkill here yes -- on fiscal apocalypse for the actual.

Anyway day's not over.

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