The powerful House Ways and Means Committee, in charge of taxes and entitlements, will have to guide America away from the fiscal cliff before January – but it remained paralyzed to do anything about it on Thursday.
The committee met for a brief 20 minutes behind closed doors, and was unable to move the ball forward at all on averting the tax increases and indiscriminate spending cuts that are due to hit around the end of the year. Analysts have said the full weight of that so-called fiscal cliff would likely lead to a recession.
“We didn’t discuss the fiscal cliff, but not because we don’t have face it. We do,” Ranking Member Sandy Levin (D-Mich.) said afterward.
Asked why the committee cannot begin work on solving the fiscal cliff, he said: “There is an election.”
Thursday's get-together marked a second consecutive day filled with meetings on year-end issues, with Treasury Secretary Timothy Geithner meeting with a number of top lawmakers, including Ways and Means Chairman Dave Camp (R-Mich.) and members of the Senate Finance Committee meeting Wednesday with Federal Reserve Chairman Ben Bernanke.
Camp appeared calm despite the looming danger, pointing out after the meeting that the deadline for action is the end of the year. The purpose of Thursday's meeting, Camp said, was for members to review their work over the last two years and the issues facing them after the election.
Those issues happen to be daunting: All the Bush-era tax rates expire – including on ordinary income and capital gains – and the Alternative Minimum Tax would also hit millions of middle-class families. Estate estate tax parameters would also skyrocket.
On the spending side, discretionary spending would face across-the-board cuts. Republicans and Democrats have discussed replacing at least some of them with cuts to mandatory spending like entitlements that are under the jurisdiction of Ways and Means. The reimbursements doctors receive under Medicare will also be cut drastically, unless Ways and Means acts.
Rep. Kevin BradyKevin BradyTrump tariff talk raises questions for GOP Tax reform: Starting place for jobs, growth Overnight Finance: Trump blasts Carrier's union leader | What's in the spending bill | Jamie Dimon gets perch for Trump era | AT&T, Time Warner execs grilled MORE (R-Texas) all but acknowledged that most of the heavy lifting on the fiscal cliff would have to be put off until after the election.
Camp told Ways and Means members, Brady said, to “have a great election, but come back Nov. 13 ready to go to work, ready to roll up your sleeves and solve these problems.”
Brady also said that he didn’t know of any discussions by top officials gaming out potential scenarios based on election results, but acknowledged those talks might be happening.
Rep. Charles Rangel (D-N.Y.), a former Ways and Means chairman, also said that the election would play a big role in whatever fiscal cliff solution was reached.
But Rangel said he urged in the meeting that lawmakers protect their right to draft tax laws and not cede their leverage to the White House – no matter who will be president next year.
“We’re talking to each other,” Rangel said. “That’s all. That’s all.”