US Politics Special: A 6-Point Guide to the "Fiscal Cliff"

President Obama calls on Friday for a resolution to avoid the "fiscal cliff"

See also US Audio Feature: So How Serious is This "Fiscal Cliff"? --- Scott Lucas with the BBC

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Editor's Note: As 2012 comes to a close, the emergency story in the US press is the "fiscal cliff". If there is no agreement by midnight, then tax cuts introduced by George W. Bush almost a decade ago will lapse, and funding of Federal programmes --- such as benefits for long-term unemployment and farm subsidies --- will be in jeopardy.

Discussions on Sunday were adjourned without agreement between the Obama Administration and Democratic and Republican leaders in Congress, despite Democratic concessions such as the raising of tax rates only on those making more than $450,000 a year and on an escalation of estate tax.

But as the haggling over details continues to the last minute, what are the basic economic issues? What happens if the clock strikes 12 and there is no dramatic resolution? EA's Lee Haddigan explains....

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US Politics Analysis: Pushing Obama and Congress Towards the "Fiscal Cliff"

Federal Reserve Chairman Ben Bernanke talks on Tuesday about the "fiscal cliff"

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America's politicians are wrestling with a basic problem --- raise taxes or cut welfare spending --- and the interested and influential advocacy groups are unlikely to be accommodating. Thought organisations supporting Obama are shouting loudest now there is little doubt that, once Republicans have come to terms with their electoral defeat, conservatives will push back hard. This is a game which is only beginning and in which the President and members of Congress are far from the only players.

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US Politics: A Beginner's Guide to Reform of Social Security

Social Security and reform. Mention the two together, throw in references to "looming fiscal crisis" or deficit reduction, and just sit back and watch the hackles rise on various concerned parties. And understandably so; Social Security is the bedrock principle of a society that does not abandon the disadvantaged, the unlucky, and, yes, the profligate or irresponsible to an old age of absolute deprivation. Reform, especially when uttered by Republicans, conjures visions of soup kitchens for the retired, a fate that should await no citizen of a civilised society.

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EA's US Politics and Economy Special: A Half-Time Reality Check on the Federal Budget

It may be that those who are arguing the debt is unsustainable are just doommongers, panicked needlessly by deficits caused by this relatively short-term blip in the economy. Undoubtedly the present deficit numbers have been made worse by more people receiving benefits from the entitlement programs, and less people paying taxes. But, even recognising that possibility, the numbers being presented in various reports on America's fiscal future are sobering reading.

The issue is only going to grow in importance over the next few months, and the partisan extremes in both parties are readying themselves for the mammoth struggle ahead. What we have seen recently are petty squabbles compared to the brouhaha that will erupt when the Americans from The New York Times poll finally realise what is actually at stake in the forthcoming discussions on the debt crisis.

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US Politics Special: The Conservative Way Forward on Social Security

Last week's quiet in Congress was broken when the House of Representatives debated the spending levels to keep the government in operation through 30 September, the end of the current Fiscal Year.On Tuesday, Wednesday and Thursday the House did not adjourn until past midnight. Members can presumably catch up on sleep this week when Congress is in recess for President's Day.

Meanwhile, President Obama released his budget for Fiscal Year 2012, which starts on 1 October.Some sympathetic commentators, i.e., those who didn't castigate the President for cowardice or a lack of statesmanship, argued that this was a credible political strategy. Ignore the subject of this year's budget and let the Republicans raise it; with the consequence they become labelled as the party that wants to tear apart America's welfare system. That is not a badge you want to wear as you enter a 2012 election campaign that, as always, will be decided by moderate Independents.

Entitlement reform will be the political battleground for the foreseeable future. The current struggles over cutting government spending are only the initial skirmishes in a long campaign ahead. Momentum is growing for the budget summit called for two week ago by Sen. Kent Conrad (D-North Dakota), Chairman of the Senate Budget Committee, and Republicans are intimating their leadership will only attend if entitlement reform is on the agenda for discussion.

That brings up to a final look at the Conservative Roadmap put forward by Rep. Paul Ryan's (R-Wisconson), with its recommendations for Social Security and Tax Reform.

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US Politics Special: The Conservative Way Forward on Medicaid and Medicare

The conservative Roadmap's guiding philosophy is the vaunted economic efficiency of the free market,with hundreds of millions of individual choices in the health insurance market driving down the overall cost of health care provision.

Both Medicare and Medicaid began in 1965 as part of President Lyndon Johnson's "Great Society". Medicare is funded solely by federal dollars, partly through an employee payroll tax, and provides health care coverage for participants who are over 65. Medicaid is a joint state-federal enterprise, with states generally receiving a dollar of federal money for each dollar they spend, allowing low-income families to receive medical treatment.

The highlight of Rep. Ryan's recommendations for Medicaid is the issuing of a debit card to low-income families, loaded with a set amount of funds that can be paid to approved health care insurers.

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US Politics, Obama, and Congress: Tax Cut Deal Opens Up Splits among Democrats...and Republicans

President Obama; Senate Republican Leader Mitch McConnellThe only coherent story emerging after a chaotic week in Washington is that no one is happy with recent events in Congress. Against the backdrop of a recent Gallup poll showing that 83% of Americans disapprove of the way Congress is working --- a 30-year historic low ---, Steny Hoyer, the Democrat Majority Leader in the House of Representatives, announced on Friday: “There are at least 434 of my colleagues who are not happy about anything right now.” Then, noting that there are 435 members of the House, he added, "I want you to know I will make that a unanimous judgment. I'm not happy, either."

There is similar discontent in the Senate, where members sat in a rare weekend session to attempt to settle the contentious issues of the DREAM Act, supporting education for the children of illegal aliens, and the repeal of the "Don’t Ask, Don’t Tell" restriction on gays and lesbians in the US military. While there was some resolution --- the DADT provision was overturned, while the DREAM Act failed to pass ---unhappiness inside and outside of Washington with the current political process is sure to continue.

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