Most recent report on U.S. efforts to address its budget or fiscal cliff shows continued hardship, despite irrational market optimism. For a couple of weeks, President and Speaker of the House John Boehner have been discussing differences in desired fiscal direction. In so doing, both have realized mostly differences, and not common ground.
Boehner announced a Plan B. He took it to a vote in the House tonight and it failed. Obviously Boehner was looking for strength in his own majority party to push a lead on fiscal policy in the House of Representatives.
Revenue bills must originate and be passed in the House of Representatives. They can't come from the Senate. Revenue bills, or budget setting, are essentially between House of Representatives by passing a bill, and the President by signing it into law. Senate can make changes, but the idea must pass the House of Representatives first.
What's more, President of the U.S. can't dictate to the House of Representatives a revenue bill. Rather, game starts in the House of Representatives, with all knowing that President has veto power. Typically, as a result, negotiations start with the House and President, certainly when the current Democrat Senate is inclined to follow their Democrat President.
When U.S. has a Democrat President and Senate, but a Republican House of Representatives, the obvious negotiation is between the House and the President.
Leader of the House of Representatives is Speaker of the House, John Boehner. Mr. Boehner was elected by a majority of the House, being Republicans.
Though Mr. Boehner's vote failed in the House, ball is now completely and squarely in President Obama's court to propose something that can pass a first hurdle, being the House of Representatives. Even Boehner's plan B didn't pass the House. Suggested is a substantial width of chasm between House and President expectations.
Looks like President Obama must now realize power over national purse strings held by House of Representatives. To move government requires such realization of balance of power. Election is over, now its governing.
What is degrading to processes of governing is media characterizing an act of compromise as an act of "caving". Recalls base talk shows with lots of violent behavior displayed on set, which only excites crowds to finally encourage self-perceived protagonists, or martyrs.
But how long will it take to close this balance of power chasm, especially given a Christmas recess in the House. Checks and balances were intended to slow action, but more so with social policy as opposed to budgets. Budgets historically haven't proven this difficult.
Continued negotiations remain invited and open among all parties.
Obviously, past market confidence will fail and show declines in equities and an increasing dollar, with suspected correlations. If not, market sees a ghost in fog.
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