U.S. President Barack Obama awards the Medal of Freedom to recipient Warren Buffett during a ceremony to present the awards at the White House in Washington February 15, 2011. (Photo : REUTERS / Ahmed Zakot)
The fight over the fiscal cliff continues, and it looks like President Obama and Republicans in Congress may have come to a standstill.
Compromise is the only way the fiscal cliff can be avoided, but compromise is in short supply.
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Republicans are bound by Grover Norquist's pledge, having promised in writing that they will never raise taxes.
But after his resounding victory in last months presidential election, Obama has the political capital required to stand his ground on tax hikes for the top 2 percent of Americans, those making more than $250,000 a year.
Indeed, many of his most vocal supporters are demanding that he not cave to Republican demands. Conservative intractability is what led to this fiscal cliff scenario anyway, when Republicans refused to raise the debt ceiling in 2011.
But not all of the 2 percenters Republicans are trying to protect agree with their efforts. Obama often trots out billionaire investor Warren Buffett, whose good-natured and practical pronouncements mesh together fiscal and social responsibility. The eponymous Buffett rule that Obama wants implemented requires that millionaires and billionaires pay at least the same tax rate in practice as the middle-class people who work for them.
"I used to pay a much higher rate," said Buffett on CNBC. "But in the last 10 years, it's true. My rate has been down there with Governor Romney's and a whole bunch of other super-rich people. And I would pay 35 percent under this [Buffett rule], and I would pay 35 percent on all the money that ever ends up in my pocket."
On "The Daily Show with Jon Stewart," Buffett took a pot shot at Romney and some of those super-rich people. Many wealthy people pay lower tax rates because they have access to good accountants, overseas banks and myriad deductions. Several people, and many corporations are able to get their tax burdens down to nothing. Buffett referred to them as "moochers," singling them out as the ones who don't pay any federal income tax, not Romney's "47 percent."
As for the cliff itself, Buffett says he's sure Obama will be able to reach a deal with Republicans, but it might not be before the end of the year.
Many economists and pundits have warned that uncertainty before a deal is reached will cause painful fluctuations in the stock market, but Buffett denies that it will have any long-term consequences, as long as there is an eventual agreement.
"Incidentally, I don't think the world will come to an end. I will guarantee you this: Berkshire has about 290,000 employees now. If there's not a deal on December 31st, there's not an employee that we're going to lay off in January 1st or 2nd or 3rd or 4th. It just won't happen."
Tomorrow: how do current tax rates compare to the boom years of the Clinton presidency?