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Business Forum Wall Street cuts gains on "fiscal cliff" worry at News Forum - NEW YORK - Stocks cut early gains in a volatile start to the session on Thursday as investors looked to ...

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Old 11-29-2012, 11:41 AM   #1
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Default Wall Street cuts gains on "fiscal cliff" worry

NEW YORK - Stocks cut early gains in a volatile start to the session on Thursday as investors looked to lawmakers in Washington to resolve the budget impasse that has been unsettling markets. The Dow Jones industrial average gained 42.04 points, or 0.32 percent, to 13,027.15. The Standard & Poor's 500 Index gained 5.63 points, or 0.40 percent, to 1,415.56. The Nasdaq Composite Index gained 16.64 points, or 0.56 percent, to 3,008.42. (Reporting By Edward Krudy; Editing by Kenneth Barry)




Wall Street cuts gains on "fiscal cliff" worry
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Old 12-07-2012, 09:02 PM   #2
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Reid: Tax Rates Go Up or No Deal on Fiscal Cliff Despite Recession Threat
December 6, 2012 – Senate Majority Leader Harry Reid said that tax rates on wealthier Americans must go up or the country will go over the fiscal cliff, a move that could cause a recession next year.
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“We have kicked the can down the road for far too long, we’re not going to do it anymore,” Reid said at a Capitol Hill press conference Thursday after CNSNews.com asked him whether he would accept a recession if Republicans refused to raise taxes. “The American people need certainty, [and] the only way to have that certainty is to make sure that we start paying for things – and one way to do that is to have the richest of the rich pay a little bit more.”

Both the Federal Reserve and the Congressional Budget Office have said that if Congress allows the fiscal cliff scenario to occur – a combination of higher taxes on all Americans and about a $1 trillion spending cut – the resulting economic shock will likely result in a recession early next year, followed by rising unemployment. Reid said that both President Obama and Democrats had been “very clear” that unless Republicans agree to raise taxes on those making more than $250,000 per year, there would be no deal, and the fiscal cliff scenario would occur – with all of its intended results.

“The president’s been very clear. He’s been very clear, I’ve been very clear. Republicans have to make sure that they allow the rate increase to take place.” The White House has said repeatedly that it would not accept anything less than a tax increase on wealthier Americans, stating that they would allow the fiscal cliff to happen if a tax increase is not agreed to. “Again, there's no prospect in an agreement that doesn't involve the rates going up on the top two percent of the wealthiest,” Treasury Secretary Timothy Geithner told CNBC Sunday.

Geithner said if that happened, the pain of the fiscal cliff would be felt by all. “To – to go over this fiscal cliff, and because Republicans won’t raise taxes, tax rates on the wealthiest two percent of Americans, would subject the average American to big tax increase and enormous damage from the other cuts that would happen in that context.”

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McConnell: Permanent Debt Limit Increase ‘Not Going to Happen’
December 6, 2012 – Senate Minority Leader Mitch McConnell (R-Ky.) said that the permanent debt limit increase sought by the White House is “not going to happen,” because using the debt limit as leverage is the only way to force President Obama to cut spending.
Quote:
“Look, the only way we ever cut spending around here is by using the debate over the debt limit to do it. Now the president wants to remove that spur to cut altogether. It gets in the way of his spending plans,” McConnell said on the Senate floor Thursday. “I assure you: it’s not going to happen. The American people want Washington to get spending under control. And the debt limit is the best tool we have to make the president take that demand seriously.”

The White House has said that it wants a permanent extension of the debt limit, offering that Congress should simply allow the administration to borrow whatever money it might need to meet the nation’s spending obligations. McConnell said that Obama’s desire to effectively remove the debt limit showed that his “true intent” was the power to spend unlimited amounts of money.

“What the president’s really interested in, as we all learned yesterday, is getting as much taxpayer money as he can — first by raising taxes on small businesses that he thinks make too much money, and then on everybody else— not so he can lower the debt or the deficit, but so he can spend to his heart’s content,” McConnell said. Obama’s proposal would allow the administration to borrow at will whenever the government’s spending needs required it. Currently, Congress permits the administration to have a maximum amount of debt outstanding – the debt limit. Currently, that limit is $16.394 trillion.

The debt limit does not control federal spending; only the amount of debt the government can carry. Allowing Obama to raise the limit unilaterally would simply allow the government to borrow money as needed. It would not allow the administration to spend any more than Congress has already authorized because federal spending is authorized separately from federal borrowing. The government is expected to reach the current debt limit some time in late December or early January, depending on government cash flows and other accounting measures taken by the Treasury.

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