Yesterday at a press conference the Speaker of the House, John Boehner, punted to the President on the elephant in the room. The United States is approaching crisis status and the looming fiscal cliff may be the tip of the iceberg.
The President addressed the nation on Friday in his first appearance since election day and re-affirmed his belief the rich should pay more while leaving the back door open for entitlement reform.
This sets the stage for the next partisan showdown in Washington. It is possible that while many Americans are sipping champagne on New Years, our economy could secretly be slipping back into recession, and this means serious trouble for the nation.
President Obama invited congressional leaders to the White House and plans to extend an invitation to key stakeholders across the country.
Will this meeting be productive and lead to a grand compromise or be a waste of time like the healthcare summit in the Spring of 2009? We shall see.
The electorate desires action and the President has an opportunity to demonstrate real presidential leadership. He stated he is open to compromise but will not accept something not balanced and re-affirmed his notion that the wealthy should pay more. The markets have reacted negatively.
Citing his results of the election, you can expect President Obama to keep discussing the balanced approach promote increased taxes for higher income earners.
The true question will be how the markets react in 2013. The Affordable Care Act also known as Obamacare will also have a significant impact on the economy and challenge many state governments. As the implementation period ramps up numerous questions and compliance issues will impact small businesses making economic growth difficult and unemployment more prevalent.