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Measuring potential for 'fiscal cliff' deal

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    WSJ's Kim Strassel weighs in on talks

  • Duration 7:22
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Now for more on this is Kimberly stressful -- columnist.

For the Wall Street Journal as Mike alluded to they have about what 72 hours really to get something concrete done here.

That's right because when you think about this everyone keeps talking about -- January 1 deadline but the reality is is that most people are looking at next Friday as the real deadline in -- assuming.

But that's -- the markets consider there to be a deadline that if something isn't done by then.

Then maybe panic ensues so when you work back from that you have to leave at least a week.

For the Republicans to put something up in the house give those requisite three days for members to read it for the public to see it.

Go back and forth -- the senate a little bit if there's going to be a deal so things are not shaking loose here for a big deal in the next few days.

I think there has to be an assumption that maybe there isn't going to be that big deal and then you start looking for whether or not Republicans go for a plan B.

Or whether or not we just continue motoring along toward the cliff.

If you boil it down Republicans are saying we want less government spending the president and most Democrats seem to be saying we've got to have higher taxes.

More revenue.

Which side has the upper hand.

Look I think one of the problems here in this stalemate is it John Boehner has made a good point the president.

People -- well this is Republicans negotiating against Democrats actually this is a Republican House negotiate against the president.

What the president comes out for in the end it will probably get the votes it needs from Democrats.

The problem is what John Boehner faces on his side is coalescing his Republican coalition -- -- something that can sell.

And so when he says of the present not look.

You've got to come forward and tell us what you're willing to do on entitlements.

And only when you do that can we even talk about what we're giving -- were willing to give you want tax revenue because.

Until he starts from that baseline he can't begin to understand what Republicans.

Will go for what he can get them behind and so as long as the White House continues to refuse to be specific on that.

Then the potential for a deal is very slam.

Well there were some specifics on Tuesday when the White House told your paper -- the Wall Street Journal that hey we are willing to consider corporate tax reform.

Seem to be some kind of an all and all of branch to Republicans but you say it actually may have.

Hurt the process walk yeah because I don't think the Republicans viewed at that -- -- that assumption all along.

By the Republicans and and I think their belief that all parties understood this was -- if we had a two step process.

Something in terms of taxes and spending cuts upfront working toward a big tax reform deal next year.

That obviously that means that tax reform next year with going to deal with people the individual tax rates and corporate tax -- Republicans have always argued.

That there's a big problem that in the fact that there is a different higher personal individual tax rate and a corporate tax rate and that that needs to be narrowed or equalize.

So in the white has -- out and said hey we're willing to give you corporate tax reform that really wait a minute that was already part of the deal.

They felt I think that that was a pressure tactic that the White House put out there to make them look as though they were being reasonable offering something more when Republicans felt as though that was something that was always -- baseline.

I just want to let you know it appears that speaker Boehner is about to take to the podium so when he does.

Do that I'm gonna have to interrupt your thoughts but I just want to get your.

Get your.

Your take on how we got here I mean when this fiscal cliff plan.

Was put together a year and a half ago or so it was seen as so absurd so.

Threatening.

That no sane politician would actually let it happen and yet here we are you know a few days or.

You know ten days away from the deadline and it looks very possible how did how did that happen.

Well the fact that we have this situation in the first place is obviously a failure of congress to deal would put this super committee together they were supposed to come up with cuts -- they didn't manage to do -- we got the sequester.

There is a hope that they would deal with tax reform that didn't happen.

And then basically ever -- sat back and decided to be on hold through the election and I think that there was some sort of hope.

Maybe on the Republican side that something dramatic would shift in terms of governance and that that would change the spectrum.

That's not what's actually happening we're back with the Washington that looks exactly the way it looked prior to this election.

A Republican House -- democratic senate democratic presidency.

And so in some -- it's not necessarily surprises there has been progress on this because none of the actors have changed and the stalemate that we're facing now is exactly the stalemate that we were facing last year we had the debt ceiling hike.

Democrats want more spending.

Republicans want more cuts and I don't know how you find a middle ground in there.

You started that off -- that answer out by saying you know the failure of the congress to pass a budget but the president obviously has a role here too.

-- I think that's true and in one of the things that I think this is frustrating for many Americans who watches.

You know the president is out there saying just passes the senate bill.

That extends the tax rates for 98% of Americans -- those top two tax rates expire.

And this will go a long way toward a balanced approach in solving our problem.

The reality is -- you to pass that senate bill it's 800 billion dollars in revenue that's eighty billion dollars a year to put that in context the president last year.

Ran a deficit of one point one trillion dollars.

So you had eighty billion more a year in tax revenue it would have reduce that for one point one trillion to one point oh to -- and it's not exactly the prom so.

Spending is the issue here but there has been such a reticence in particular among Democrats.

To do any of the sort of big hard reforms it's going to be necessary to really drop those numbers down.

By the trillions.

That we're not making any progress but it seems to.

Me and maybe you disagree with is that the president is winning the PR battle but he can't because when you look at you know his approval ratings vs those of congress.

His is much higher.

Well he's certainly winning the PR battle in the regard that and he's he's got a better -- here look.

The reality is that have nothing happens he gives us tax hikes.

You know if nothing happens there's a sequester.

On the Defense Department which most Republicans disagree with.

And so they're in the position of having to come up with a pro active move.

That he will agree with and that's a very tough hand to be dealt and something to get through.

You know -- -- it always sounds good when you go out there are many Americans say tax the wealthy.

I think -- you are not in that category it is easier for you to say that that's a good idea.

But the reality is and I think what has not sunk in -- -- Republicans maybe have not done adequately enough is explain.

This point that you -- tax everybody you good -- all of these tax rates disappear.

Which everyone is talking about the worst case -- are you still wouldn't even take away half of the deficits that we've been running for the last years you've got to have spending reform.

Very good point Kimberly straw so we always enjoy reading your columns and -- -- Wall Street Journal and I know this whole -- is gonna give you a lot more to write about in the unfortunately yes thanks thanks for being with us and -- we are continuing to keep an eye on the podium there outside speaker Boehner -- office where.

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