“House Speaker John Boehner scrapped a plan to allow higher tax rates on annual income above $1 million, yielding to anti-tax resistance within his own party and throwing already-stalled budget talks deeper into turmoil,” Richard Rubin and James Rowley report for Bloomberg News. “Boehner said last night that President Barack Obama and Senate Majority Leader Harry Reid should come up with legislation to avoid more than $600 billion in tax-and-spending changes that would probably cause a recession in the first half of 2013 if left in place.”
“Now that Boehner has pulled his plan, House members and senators won’t vote on the end-of-year budget issues until after Christmas, giving them less than a week to reach agreement to avert tax increases and spending cuts set to take effect in January,” Rubin and Rowley report. “The partisan divide hardened yesterday, making the path to a deal more uncertain. ‘The odds go up that we go over the fiscal cliff,’ said Representative Rob Bishop of Utah, a Republican.”
Rubin and Rowley report, “Stocks sank. The Standard & Poor’s 500 Index retreated 1.1 percent to 1,428.85 at 9:33 a.m. in New York. The Dow Jones Industrial Average slid 62.51 points, or 0.5 percent, to 13,249.21. Treasuries rose, as the U.S. 10-year yield dropped five basis points, or 0.05 percentage point, to 1.75 percent at 8:44 a.m. New York time. It slid the most since Nov. 7.”
“Obama wants Boehner, 63, to allow a House vote on a Senate- passed bill that would extend tax cuts on income up to $250,000. That bill doesn’t address several parts of the so-called fiscal cliff, including the payroll tax, unemployment insurance, estate tax, spending cuts, expanded unemployment insurance and miscellaneous tax breaks,” Rubin and Rowley report. “A House leadership announcement said the chamber will hold no more votes until after the Christmas holiday and will return ‘when needed.’ Reid said yesterday that the Senate won’t address the end-of-year budget issues until Dec. 27.”
Read more in the full article here.
“Economic data today showed spending by U.S. consumers climbed in November as Americans pushed aside the threat of higher taxes next year, buying gifts for the holidays and making up for shopping lost to superstorm Sandy. Purchases increased 0.4 percent last month after a 0.1 percent drop in October, Commerce Department figures showed. The gain matched the median forecast of 80 economists surveyed by Bloomberg. Incomes rebounded after being depressed in October by lost wages due to Sandy,” Inyoung Hwang and Corinne Gretler report for Bloomberg News. “Technology, consumer discretionary and financial stocks posted the biggest losses, falling at least 1.1 percent.”
Read more in the full article here.
[Thanks to MacDailyNews readers too numerous to mention individually for the heads up.]