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GOP Touts Cuts to Avoid 'Fiscal Cliff'
November 27, 2012

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Congressional Republicans have asked for details from President Obama on long-term spending cuts that would coincide with any effective tax increase as a result of the "fiscal cliff."

In the wake of a White House report warning that those who suffered most if the U.S. went off the "cliff" would be middle-class Americans, some high-ranking Republicans repeated their pledge to maintain the Bush-era tax cuts for all taxpayers while also finding other ways to increase revenues and also cutting spending. A common theme from both Democrats and Republicans in recent days has been a cap on tax deductions. Many charitable organizations have sounded the alarm of reduced donations if tax deductions are capped and reduced.

Obama and other Democrats are focused on keeping the Bush-era tax cuts for taxpayers making less than $250,000 but letting the higher rates expire. Republicans want to keep all tax rates at their present level, seeing spending cuts as the way to solve the current fiscal crisis. Spokespeople for both political parties have signalled a desire to take a balanced approach, but the makeup of that "balance" remains at odds, depending on who is doing the talking.

Financial analysts have warned as well against a deal that just prolongs the tough decisions, predicting that the result would be a drop in financial markets and in American prestige abroad. Already, American markets have declined, as the "fiscal cliff" clock ticks on toward a January 1 deadline.

The non-partisan Congressional Budget Office has estimated that, if the country went over the "cliff" and the $600 billion in spending cuts and tax increases mandated by a 2011 deal went into effect, the U.S. economy would be back in recession. The mandated spending cuts would be far-reaching and deep, affecting most parts of the U.S. budget, including defense spending. The details of those cuts are known; what is not known thus far are details of what either political party would propose as an alternative.

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