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Here Are the Latest Must-Know Details on the ‘Fiscal Cliff’ Debate
With just hours before the United States goes over the so-called “fiscal cliff,” Republicans and Democrats are still hashing out the details of a deal to avert the potential crisis. Despite rhetoric and a plethora of debate, Business Insider’s Henry Blodget contends that the two sides are “absurdly close” on striking a deal. But being somewhat near one another on some indicators doesn’t necessarily mean the two sides will oblige and come to agreement in time.
Based on Washington Post analysis of the dialogue as it currently stands, Blodget notes some of the concessions that Democrats have made to assist in bridging the divide on taxation. Rather than commencing higher taxes on couples making $250,000, Democrats have agreed to increase that sum to $450,000 (some in the GOP are insisting that this number be $550,000).

Photo Credit: AP
On another note, though, the Democrats — despite Republican push-back — plan to raise capital gains and dividend taxes to 20 percent for those families making $250,000 or more. Some deductions will also be reduced for these households. Below, see some of Blodget’s other bullet points highlighting where the Democrats currently stand on a plethora of issues pertaining to the “fiscal cliff”:
- The Democrats’ offer would permanently protect middle-class households from the Alternative Minimum Tax. No details on how this would work.
- On the spending side, the Democrats’ offer would delay the “sequester” (automatic spending cuts) until 2015. This would cost an estimated $200 billion. But it would avoid the cuts to the military budget that the Republicans are so desperate to avoid.
- The Democrats would also extend unemployment benefits for a year, extend farm subsidies for a year, and avoid a 27% cut in Medicare payments to doctors. The Republicans say they want offsets to these spending cuts.
Despite being relatively close on some indicators, the debate continues. On Sunday, Senate Minority Leader Mitch McConnell, R-Ky., spoke repeatedly to Vice President Joe Biden, a former Senate colleague, in hopes of settling remaining differences and clinching a breakthrough that has evaded the two sides since President Barack Obama’s November re-election.
In one indication of the eleventh-hour activity, aides said the president, Biden and top administration bargainer Rob Nabors were all working late at the White House, and McConnell was making late-night phone calls as well. According to POLITICO, sources close to the discussion claim that an agreement on income level taxation could be close:
McConnell and Biden, who served in the Senate together for 23 years, are closing in on an agreement that would hike tax rates for families who earn more than $450,000, and individuals who make more than $400,000, according to sources familiar with talks.
The stakes remain high. Unless an agreement is reached and approved by Congress by the start of New Year’s Day, more than $500 billion in 2013 tax increases will begin to take effect and $109 billion will be carved from defense and domestic programs. Though the tax hikes and budget cuts would be felt gradually, economists warn that if allowed to fully take hold, their combined impact — the so-called fiscal cliff — would rekindle a recession.
Despite discussion, there was still no final agreement on the income level above which decade-old income tax cuts would be allowed to expire. While Obama has long insisted on letting the top 35 percent tax rate rise to 39.6 percent on earnings over $250,000, he’d agreed to boost that level to $400,000 in his talks with Boehner.

WASHINGTON, DC – DECEMBER 30: (L-R) Represenatives Joseph Crowley (D-NY), John Larson (D-CT), and Xavier Becerra (D-CA) hold a news conference about jobs and the ‘fiscal cliff’ on Capitol Hill, December 30, 2012 in Washington, DC. The House and Senate are both in session today to deal with the looming ‘fiscal cliff.’ issue. (Photo Credit: Getty Images)
The two sides were also apart on how to keep the alternative minimum tax from raising the tax bills of nearly 30 million middle-income families and how to extend tax breaks for research by business and other activities.
Republicans were insisting that budget cuts be found to pay for some of the spending proposals Democrats were pushing.
These included proposals to erase scheduled defense and domestic cuts exceeding $200 billion over the next two years and to extend unemployment benefits. Republicans complained that in effect, Democrats would pay for that spending with the tax boosts on the wealthy.
“We can’t use tax increases on anyone to pay for more spending,” said Sen. Kay Bailey Hutchison, R-Texas.
Both parties also want to block an immediate 27 percent cut in reimbursements to doctors who treat Medicare patients. Republicans wanted to find savings from Obama’s health care bill as well as from Medicare providers, while Democrats want to protect the health care law from cuts.
Both sides agree that a temporary 2-percentage-point cut in the Social Security payroll tax was likely to expire. That reduction — to 4.2 percent — was initiated by Obama two years ago to help spur the economy and has meant $1,000 annual savings to families earning $50,000.
A senior defense official said if the spending cuts were triggered, the Pentagon would soon begin notifying its 800,000 civilian employees to expect furloughs — mandatory unpaid leave, not layoffs. It would take time for the furloughs to be implemented, said the official, who requested anonymity because the official was not authorized to discuss the preparations.
The Associated Press contributed to this report.
(H/T: Business Insider)
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Comments (68)
schroeder123
Posted on December 31, 2012 at 11:25amD jango Unchained , A great Movie If…The bad guys were our Elected officials. Now that would be cool.
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deadb4red
Posted on December 31, 2012 at 11:17amThe Feds just spent billions of dollars on amminition for some of our domestic agencies, the economy is going back into a recession (self inflicted) because of irresponsible politicians in DC, and now the village idiot and his partners are pushing for more gun control over it’s citizens, extended warrantless wire taps on the populous,…notice how history repeats itself when liberties are the target.
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Fixer31
Posted on December 31, 2012 at 10:28amThe Republican leadership is so inept. Any “deal” they’re considering destroys the Republican brand of no taxing and gives Obama the ability to blame them when the economy does not turn around for not going “all in” on his approach to fix the economy. Here’s what needs to be done:
• Have President Obama and the Democratic Congress introduce their bill to raise taxes for the “rich” and to address their alternatives to mandatory spending cuts that are to take effect January 1st.[1]
• Show up for the vote, but do not vote on it. Instead, vote present.[2]
• The Democratic House and Senate should each have no problem passing it by a simple majority vote and 60% vote of those voting, respectively, since the vote will only be among Democrats.[3]
• Only agree to a debt ceiling increase if the Senate passes a budget first.[4] Use same present vote tactic as above.
• If they refuse when given this chance to do what they have been telling the American people is what they “know” is necessary for this country to prosper, then, and only then, do we refuse to compromise, i.e., if they are too scared to act on their principals when they will get no cover, i.e., be able to blame the Republicans, then let the Republicans act on theirs. No compromise in that event.
Why do this?
• Recognize and admit that the re-election of President Obama means we’ve already gone over the fiscal cliff.[5]
•
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darkknight91
Posted on December 31, 2012 at 11:14amThere’s really nothing the republicans can do other than take their ball and go home. Maybe send up a bill cutting middle class taxes and have the manchild reject it. Anything they do is just symbolic and theater. Whatever deal is reached, or if there isn’t one, we lose. There’s no escaping it. We go over no matter what.
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Beachmastermax
Posted on December 31, 2012 at 12:15pmGood “strategy”. But that is the problem, the GOP does not know what that word means.
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RodT82721
Posted on December 31, 2012 at 10:09amWe, as voters have built this monster in Washington DC that wants as much of your money as they can extort.
Everyone knows we have a very large debt, caused by spending money they didn’t have and had to borrow or print the excess, to keep spending. There isn’t any way to avoid that fact, unless like Congress you don’t mention it.
So now our elected protectors are getting ready to make tax payers pay for their excess spending, except that isn’t the plan today. What they are really doing, is deciding just which group of workers that still have enough income, will be paying for their new pay increase. They only make about 5X the average wage.
Unless they wait until the last minute of the last day, they might have to put it in writing for everyone to see, and that isn’t going to happen.
Ever since the got away with Obamacare, when the Speaker told the voters, they had to pass the bill to see what was in it. They set the lowest bar possible, and are sticking to it now. It’s all about “fairness” where 1% of income tax payers get to pay 50% of the taxes.
Tar & feathers, for them would be a better solution.
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darkknight91
Posted on December 31, 2012 at 11:25amYou’re right in that voters are getting what they voted for. But I also blame the 1%. For years, as tyranny has taken hold, they continued in their lifestyles, continued making money that the Feds would eventually take, and did little to nothing to combat it. I remember hearing about liberal demonstrators that hit the streets for whatever cause they were about and people would question why conservatives never did that. The answer was ‘we have jobs and have to make money’. Well now they’re paying for it. The founders pledged their lives, FORTUNES and honor to fight tyranny. Both sides are guilty of worshipping mammon. One worships their own. The other worships the other guys’. It’s just like Christians did nothing about the erosion of God and the implementation of abortion in the 60′s and 70′s and today are the biggest gripers about it today. They sat within their four walls and let it happen. We have this mess from years of doing NOTHING.
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Wolf
Posted on December 31, 2012 at 6:58pmAh, yes, Darknight… and when was the last time you turned down a raise at work? Every time? Or none? Seems to me the one percent you’re complaining about just did better than you- or you’d be among them and most likely not complaining the least bit about them making money and not letting the fed have it in taxes.
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TheGreatMan
Posted on December 31, 2012 at 10:06amWhat happened to my previous comment????????????????????
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1776freedomofspeech
Posted on December 31, 2012 at 10:06amPeter Pan ( Harry Reid) and Wendy (Nancy Pelosi) want us to live in Never Never Land forever………..
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Advection
Posted on December 31, 2012 at 9:56amI heard a Democrat in the news today claiming that Republicans aren’t negotiating with Obama “in good faith”.
And now for something completely different…THE TRUTH!
The reason they made the “cliff deal” in the first place was that Obama didnt negotiate in good faith in 2011. After sending a fake budget to the Congress, which got ZERO votes, the actual budget negotiations got under way, but Obama didnt offer any economic plan. He merely gave campaign speeches, excoriating Republicans and making vague references to some plan.
The media quoted the fake details of “Obama’s plan”. Then after months of getting trashed in campaign speeches and the press, Republicans explained that they’d never seen a plan and challenged Obama to release one. Charles krauthammer even put a PBS panel of liberal media elites to shame by challenging them to show him Obama’s plan. They couldn’t because there wasn’t one.
Then Congress formed an extra-constitutional “super committe” which resulted in the cliff deal, which both sides claimed neither wanted. BS! That deal was the Democrat’s dream. It raised taxes sky high and slashed nation defense to the bone. What could Republicans ever offer Democrats that could be “better” than that?
This month Republicans even gave Obama everything he had asked for, but Obama rejected that then quadrupled his demands.
This whole thing was a political scheme to weaken the US economically, militarily and politically. Congratulations on
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Advection
Posted on December 31, 2012 at 10:03amMy post was cutoff at the end. It should have ended with…
“Congratulations on electing a psychopath.”
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rangerskippy
Posted on December 31, 2012 at 10:04amAdvection
Do you hear that? Listen close. It is the black helicopters heading your way. You have spoken truth, and it will not be tolerated. You will be hearing a knock on the door very soon.
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Advection
Posted on December 31, 2012 at 10:13am@RANGER,
You replied to my post, which means you read my post, which means that you are now implicated with me as an unindicted co-conspirator!
I hear the coppers! (whump..whump..whump..whump)
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AvengerK
Posted on December 31, 2012 at 11:09amADVECTION….
Gracchus: And where does my name appear on the list of disloyal enemies of the state?
Marcus Licinius Crassus: First.
You can count me in…..
It’s clear that Obama’s end game is not fiscal responsibility and addressing spending and debt. It is turning the house Democrat in 2014. This is why Obama won’t stop campaigning (that and the fact that Obama can’t really do anything else). In fact Obama would love a tax hike on everyone right now.
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Flakeyone
Posted on December 31, 2012 at 9:55amReally? Does any right-thinking, somewhat sane person really think that ANY kind of deal from any of the politicians running this country will amount to anything productive? Will it pay down one lousy penny of the MASSIVE debt we have? Will it do an darn thing to ward off the pending financial crisis? Will it even come remotely close to a BALANCED budget? HMMM? No chance. No way. So it just does not matter what kind of deal those crooks come up with. They ALL have new pay raises, they ALL have lifetime benefits, lifetime INSURANCE, they ALL are exempt from OBAMA-CARE. It just does not matter what happens people, we are headed off a financial cliff no matter what they do. We may as well just get it over with. Everyone had better be buying long-term food stores and water because you’ll need them sooner, rather than later.
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sickofdagov
Posted on December 31, 2012 at 9:52amSame garbage, new year. These politicians know exactly how this ends. It is their intent to up the drama for the oblivious American people. Democrats and Republicans are on the same team. Their team. Again, the cost to the American people will go up while there will be no spending cuts. We will deal with spending cuts later…we have to get this deal done….oh my God……BS! I would love to just go off the cliff and get it over with. Better to do that than to keep making the cliff taller. And….we will if that is the way the government wants this play to end. We need to fire them all. They ALL make me sick.
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whywonder
Posted on December 31, 2012 at 9:47amEven a liberal like me hates this federal pay raise….we need term limits. I think all of us could get behind that idea but we all love our individual congresspeoe and senators.
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term limits for congress
Posted on December 31, 2012 at 9:55amAgreed.
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SpankDaMonkey
Posted on December 31, 2012 at 9:44am.
Here Are the Latest Must-Know Details on the ‘Fiscal Cliff’ Debate
They voted free KY for everybody!!!!!!!!!!!!!!!!!!!!!!!!!!
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BODYBAG
Posted on December 31, 2012 at 10:05amYes. And they’re “getting closer” to the BEND OVER part ——-
NOT ONE MORE DIME is the position that should be taken [and is by the Tea Party].
Let’s go over the cliff.
I didnt vote for this tyrannical narcissist dictator. He’s not my King.
Nor did I irresponsibly blow the $16.5 Trillion.
I will not pay one more dime toward the incompetent mistakes of this gaggle of monkeys.
Fiscal cliff: Major progress toward deal
http://www.politico.com/story/2012/12/fiscal-cliff-hanger-as-deal-in-limbo-85599.html?hp=t1
“Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden engaged in furious overnight negotiations to avert the fiscal cliff and made major progress toward a year-end tax deal, giving sudden hope to high-stakes talks that had been on the brink of collapse, according to sources familiar with the discussion.
McConnell and Biden, who served in the Senate together for 23 years, are closing in on an agreement that would hike tax rates for families who earn more than $450,000, and individuals who make more than $400,000, according to sources familiar with talks.”
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Hotconchick
Posted on December 31, 2012 at 2:33pmMc Connell and Biden- a real meeting of the minds. LOL
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LIBSALWAYSLIE
Posted on December 31, 2012 at 9:41amThe land of the free and the home of the brave has turned into the land of the sheep and the home of the blind. Socialism is barreling down the road, straight at us, and too many people are blind to that reality. We are screwed, it will not be a happy new year for our once great country. Progressives have destroyed our future. If you think that’s an over exaggeration, you’re one of the blind.
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BODYBAG
Posted on December 31, 2012 at 10:07am@LIBSALWAYSLIE
Posted on December 31, 2012 at 9:41am
If you think that’s an over exaggeration, you’re one of the blind.
—————————————–
Bullseye.
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niterider
Posted on December 31, 2012 at 10:31amBingo. This newsy stuff is all smoke and mirrors. The truth is the fix is in, Repub and Dem alike are in on it, and we are all COMRADES now. The flag may look the same but it has a hammer and sickle on its backside.
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Hotconchick
Posted on December 31, 2012 at 2:36pmSocialism isn’t barreling down the road- it’s already here.
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Cavallo
Posted on December 31, 2012 at 9:31amHouse needs to pass three bills today.
One, Kick the can: Amend the legislative agreement to put off the “cliff” until June 30th or Jan 1 2014.
Two, Pass their own bill of the way they want it.
Three, Pass their own bill with most of what they want in it.
Go Home. Let the Dems kill it in the Senate or Veto it in the Executive. Then they own the cliff. Republicans always try and negotiate from the middle, the Dems from the Extreme which is why the Republicans always cave into the vast majority of what the Dems want. Their haggling skills suck, save for the Tea Party Representatives who ran on extreme fiscal responsibility. Regardless of whatever else the various “Tea Party” Representatives may have in their platform, what defines them as Tea Party is: Don’t spend more than you take in, low taxes, economic growth.
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BSdetector
Posted on December 31, 2012 at 9:43amRepubs could walk up to mcdonalds dollar menu, pay $2 for a 1$ burger, and that would be the pinnacle of their negotiating ability.
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SamIamTwo
Posted on December 31, 2012 at 9:23amThen the price of milk won’t go up. LOL
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Cavallo
Posted on December 31, 2012 at 9:21amAMT solution. Revisit original bill, add adjustment for inflation.
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soybomb315_II
Posted on December 31, 2012 at 9:21am“On the spending side, the Democrats’ offer would delay the “sequester” (automatic spending cuts) until 2015. This would cost an estimated $200 billion. But it would avoid the cuts to the military budget that the Republicans are so desperate to avoid.”
Why are the republicans willing to avoid cuts in order to protect military budget. Our current military budget is higher than 2007 levels, even adjusting for inflation
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Cavallo
Posted on December 31, 2012 at 9:34amHow much you want to bet quite a bit of that “military spending” is nation building BS. The second you suggest that crap be cut, you’re accused of stripping off a soldier’s body armor. Which might be likely, since the powers that be would rather screw over the soldiers than stop the bribery payments to various corrupt and incompetent governments and factions.
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seek.the.truth
Posted on December 31, 2012 at 9:04amAargh! Can anyone say ” no spending”? C’mon tea party Republicans — stay strong!
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lynnissmart
Posted on December 31, 2012 at 9:01amI wonder if the collapse of America will go as planned…..or will in backfire in someone’s face? Let’s hope so!
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progressiveslayer
Posted on December 31, 2012 at 8:56am7.00 a gallon milk will be a bargain by the time Barry and the lawbreakers in DC get through trashing the dollar. There’s no stopping this train wreck and it’s all being done by design,to collapse our system and to reset,the fundamental transformation of America and it won’t be pretty.
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DadRocked
Posted on December 31, 2012 at 9:05amWhat’s really holding them up?
Fighting each other for their ‘share of pork’ being injected into the bill…
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progressiveslayer
Posted on December 31, 2012 at 9:20amIt’s all theater really,they know a great portion of the public has low intelligence and they want to be told everything’s going to be okay.Technically we can’t go bankrupt because the fed will continue printing money until it’s worthless,we’ll still get paid but we won’t be able to buy anything with it.
This is an odd thing for me to say considering what I’ve just written but try and have a Happy New Year!!!!
BTW Buy some silver,gold and lead! ;)
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Cavallo
Posted on December 31, 2012 at 9:39amYup, the math doesn’t work. They keep printing and spending hoping for some Super Steve Jobs Messiah on economic growth crack to create some kind of growth bubble to bail them out. That and there are some that just hope to be out of office and securely away before the whole system collapses. The “fiscal cliff” is nothing compared to the abyss awaiting just a hop skip and a jump past this minor pot hole. Greece on steroids, crack, meth, and twenty times as crazy as James Holmes.
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DadRocked
Posted on December 31, 2012 at 10:21amLook, here’s another example/proof… The mint is preparing by changing metal composition of coins and the paper/cotton currency to a polymer like Australia…
To avoid panic, they claim it as cost effective but in reality they know that even they will have trouble obtaining the raw materials if they don’t change their process.
As a numismatist I’ll supply you with two examples:
Color Changes Possible For Some U.S. Coins – Of the current top three contenders for a change in composition for the copper-nickel Jefferson 5-cent coin, two exhibit a yellowish hue and the third is golden in color, according to a report to Congress submitted Dec. 13 by the U.S. Mint. http://www.coinworld.com/Articles/ViewArticle/color-changes-possible-for-some-u-s-coins
U.S. Mint’s Metals Testing Will Continue – While two years of initial research and development by the U.S. Mint into coinage metals and alloys offer some promising composition alternatives, some factors have to be examined further to ensure a seamless transition should changes be approved, says Deputy U.S. Mint Director Richard A. Peterson. http://www.coinworld.com/articles/viewarticle/metals-testing-will-continue
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NoMoMrNiceGuy
Posted on December 31, 2012 at 8:54amJust keep driving and go over the so called freekin cliff already – let’s drop till we hit bottom. Weed out the weak and rebuild with the strong – Ready set GO !
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BODYBAG
Posted on December 31, 2012 at 9:06amYup.
I vote for massive uprising in order that WE THE PEOPLE recover what was once OUR country.
A place where citizens can live in peace, pursue & achieve their dreams and have the rights to
LIFE, LIBERTY, and THE PURSUIT OF HAPPINESS ——-
All WITHOUT massive government interference in our lives and being taxed into debt serfdom for life.
It will require FORCE. Make no mistake.
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term limits for congress
Posted on December 31, 2012 at 8:53ammore taxes, more spending – we know how this will end.
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RIGHTHOOK
Posted on December 31, 2012 at 8:49amFolks this is Obama and his handlers “theater”. They never intended resolution. They get their tax increase, their spending and pit Republican’s against one another. Pretty simple strategy and he isn’t done yet..
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DougHuffman
Posted on December 31, 2012 at 8:58amIf there is anyone – particularly here – still Repugnican, then we deserve the government that we have.
The GOP is the progressive right-wing of America’s Ruling Class.
μολων λαβέ molṑn labé ΜΟΛΩΝ ΛΑΒE “From my cold, dead hands” works for me.
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DadRocked
Posted on December 31, 2012 at 9:27amDoug – I don’t think that many here are party line but conservative, Constitutional Americans…
We don’t like nor want to be labeled as any one thing except being an individual and American.
But you already knew that because we’ve read your posts for some time now and this has defined you as well…
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RIGHTHOOK
Posted on December 31, 2012 at 9:40amDoug – There are obviously representatives in office that operate under the harbinger of “Republican” albeit a garden variety of those. Regardless of how well or how poorly they represent our Constitution and our country in general they remain the antithesis and arch enemy of Obama and his supporting cast (media) thus he will do all he can to crush their existence. And they themselves have done a remarkable job of doing themselves in anyway. They don’t need a lot of help at this juncture.
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DougHuffman
Posted on December 31, 2012 at 9:47amI disagree with them representing antithesis. The only political party remaining that is not progressive in principle is The Constitution Party. Y’all have spend too much time having your brains sucked by the boob tube.
μολων λαβέ molṑn labé ΜΟΛΩΝ ΛΑΒE “From my cold, dead hands” works for me.
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RIGHTHOOK
Posted on December 31, 2012 at 10:07amDoug – You okay??? Antithesis definition – OPPOSITION, CONTRAST. Call the current Republican’s whatever you wish to label them as. They are elected “conservative’s” which in today’s world is a loose term in itself. In any case and for the last time; Obama and his handlers detest anyone and any group not aligned with their Socialist/ Commie agenda. That means Libertarian too……….and whatever else is hanging around out there.
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DougHuffman
Posted on December 31, 2012 at 12:28pmYa gotta move beyond particularly on-line dictionaries that are rewritten by the victors. The dialectic originated in Ancient Greece that also practiced sortition, election of volunteers by lottery.
Libertarians, democrats and the GOP are all progressives. Conservative and conservatism are social and political schema that you, that can’t stand the truth, hate.
μολων λαβέ molṑn labé ΜΟΛΩΝ ΛΑΒE “From my cold, dead hands” works for me.
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truckingoff
Posted on December 31, 2012 at 8:46amLucy pulls the football away agin.No spending cuts no deal.
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oldguy49
Posted on December 31, 2012 at 8:48amTERM LIMITS…………..please!!!
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DougHuffman
Posted on December 31, 2012 at 8:42amTake the fiscal-cliff pill now, it’s better than the suppository that will be administered by Obama’s masters and financiers, the Chinese, at the point of their bayonet/sword/pen is mightier than the sword.
μολων λαβέ molṑn labé ΜΟΛΩΝ ΛΑΒE “From my cold, dead hands” works for me.
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dublinthewagons
Posted on December 31, 2012 at 8:41amI’ll gladly pay you Tuesday for a hamburger today.
Throw these morons of the cliff physically.
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LIBSALWAYSLIE
Posted on December 31, 2012 at 8:52amIts a good thing obama just gave congress a pay raise. The people were so sad that they only made $174,000 a year. And considering how happy everyone is with the wonderful job they’re doing, the deserve a raise, right?
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BODYBAG
Posted on December 31, 2012 at 9:24amNotice their raises were by executive fiat.
Barry has rendered Congress irrelevant.
In case anyone has forgotten, congress was supposed to be the voice of the people.
He’s basically told WE THE PEOPLE to STFU.
Thats why the TEA PARTY is so vociferously demonized by the Progressive Nazi Party.
The tea party is the last stop-gap we have.
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LIBSALWAYSLIE
Posted on December 31, 2012 at 9:35amThe land of the free and the home of the brave has turned into the land of the sheep and the home of the blind. Socialism is barreling down the road, straight at us, and too many people are blind to that reality. We are screwed, it will not be a happy new year for our once great country. Progressives have destroyed our future. If you think that’s an over exaggeration, you’re one of the blind.
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