With No 'Fiscal Cliff' Deal In Sight, Americans Brace For Huge Tax Hikes
NEW YORK (CBSNewYork) -- They are bickering and playing the blame game -- and it's all over your money.
With less than five days to go until the deadline, President Barack Obama returned to Washington on Thursday and the head of the Senate warned that we are likely headed off the "fiscal cliff," CBS 2's Dick Brennan reported.
Tax doomsday is looming, but there is still a political standoff in D.C., with one side seemingly waiting for the other to act. Though the Senate is already in session, the House will not be back before Sunday.
WCBS 880's Ginny Kosola reports
Podcast
President Obama returned to Washington to work on a deal to avoid the fiscal cliff, which would hike taxes and cut spending.
The president spoke on the phone with the four congressional leaders on both sides of the aisle, but Senate Majority Leader Harry Reid (D-Nev.) said he was not feeling optimistic.
"The American people are waiting for the ball to drop, but it's not going to be a good drop," Sen. Reid said. "[House] Speaker [John] Boehner is unwilling to negotiate. We've not heard a word from [Senate Minority] Leader [Mitch] McConnell. Nothing is happening."
Speaker Boehner has ordered the House back in session on Sunday, but talks in the interim have gone nowhere, with plenty of finger pointing on both sides. According to Long Island Republican Peter King, compromise doesn't seem to be on the agenda.
"Part of the problem is you have people told never to vote for any tax increase, and others never make any compromise on entitlements, and they refuse to deal," Rep. King said.
"Republicans aren't about to write a blank check for anything Senate Democrats put forward just because we find ourselves at the edge of the cliff. That wouldn't be fair to the American people," said McConnell (R-Ky.). "The phone never rang, and so now here we are five days from the New Year, we might finally start talking."
Financial planner Len Hayduchok of Dedicated Financial Services in Princeton said going off the cliff could have a big impact on middle class Americans.
"The average household income of around $60,000 in New Jersey, they're talking a minimum of $3,000 per year," in additional taxes, Hayduchok told WCBS 880's Ginny Kosola. "You break it down on a monthly basis, you're talking someplace around $250 a month.
The implications are enormous. About $1.2 trillion in spending cuts kick in and taxes go WAY up. For families making between $50,000 and $75,000, the increase would be $2,400. From $75,000 to $100,000, it's about a $3,700 increase. For families making more than $150,000, it would be about a $6,000 rise. And at $250,000, it's about a $10,000 hike.
New Yorkers who were at a job fair at Roosevelt Field Mall on Thursday seem to have a mixed reaction to the impending fiscal cliff.
"I'm not worried about the fiscal cliff whatsoever. I'm quite sure they'll come to a resolution at the last possible moment and if for some reason something happens where they don't, I'm sure that things are going to be put in place where things are not going to be as dire as everyone is predicting," a woman told WCBS 880's Monica Miller on Thursday. "Everyone in the Legislature and the executive branch know that the country really can't bear anymore hard economic times, so I'm sure they're going to be able to patch something together."
WCBS 880's Monica Miller with reaction from Garden City
Podcast
But some residents said they are concerned congressional inaction could make already tough times even worse.
"I've been out [of work] eight months, the medical costs a lot to have. I'm hoping it doesn't get worse if certain things don't pass by the end of the year and I'm getting letters in the mail that they might even cut off the unemployment," an East Islip woman told Miller.
So, is there time to bang out a deal?
"Procedurally, there's still time. It certainly depends on how complicated the fix is," said Jonathan Allen of Politico.com.
There are other options. Taxes could go up on Jan. 1, but when the new Congress is sworn in on Jan. 3, lawmakers can vote to cut taxes.
But right now there are no indications of compromise.
"Everybody wants to play the blame game. The blame game is about to put us over the edge," Rep. Steve Latourette (R-Ohio) said.
"I don't know, time-wise, how it can happen now," Sen. Reid said.
"I would say it's probably slightly more than 50-50 that we will, but I was more confident two weeks ago," Rep. King said of the sides making a deal.
The White House denied that it has sent a proposal to the hill, but congressional leaders said they are waiting for one.
"The American people have a right to be very upset with this Congress, that we are not carrying out the business of this country," said Rep. Steny Hoyer (D-Md.).
Please offer your thoughts in the comments section below ...
