WASHINGTON, DC-With exactly two weeks before the Bush era tax rates are scheduled to end and draconian spending cuts put in place, Democrats and Republicans are showing signs of forging some kind of consensus to avoid the worst. The White House stepped away from its earlier position that tax relief should be limited to families with incomes of $250,000. Now that ceiling has risen to $400,000. President Obama also included in his offer some $1.2 trillion in spending cuts, along with the $1.2 trillion he expects to realize in revenues. This offer followed an offer from the Speaker of the House John Boehner, which was based on $1 trillion in spending cuts and $1 trillion in revenues. Those numbers suggest the two camps are not that far off from an agreement.
Of course, in reality there are many sticking points that could easily derail the process. One is the debt ceiling, which President Obama wants to have taken off the table completely. The U.S. is scheduled to hit the ceiling in a matter of weeks, and will find it necessary for Congress to raise it in February or March. The Republicans, not surprisingly, are unwilling to give up the little leverage they have with the debt ceiling. Then there is the matter of entitlement spending and the changes that will be made in how Social Security and Medicare are applied. Even if those thorny issues are successfully addressed by Obama and Boehner, each has to bring his respective party in line. In short, a compromise on these issues will be anathema to both conservatives and liberals and it is no small matter of debate whether enough will sign on to any agreement Obama and Boehner forge.
Even with the outlines of a possible fiscal cliff solution taking shape, people in the commercial real estate industry are still rushing to close deals before the end of the year, Lawrence J. Selevan, CEO of Chesterfield Faring Ltd., tells GlobeSt.com. Besides the end of certainty in tax and spending issues, next year threatens to usher in a period of interest rate instability, he says. “Perhaps more importantly, consumer confidence and corporate confidence is likely to decrease and push back on outlays for consumer goods and equipment.”