Driving the Day: 12/10/12

Dec 10, 2012

Need to know…

  • Christine Lagarde: ‘Zero’ Growth for U.S. Without Fiscal Cliff Deal. Christina Lagarde, managing director of the International Monetary Fund (IMF), said on Sunday that the United States risks a severe economic downturn if Congress and President Obama can’t avoid going over the fiscal cliff next year. More specifically, she said that without a deal, the U.S. economy could experience zero growth next year. Lagarde also said that the fiscal cliff is a bigger threat to U.S. economic security than the debt crises in Greece and other European countries.
  • Obamacare Fees to Increase Taxes, Even with Fiscal Cliff Deal. Even if lawmakers somehow stop the Bush-era tax rates from expiring, taxes are still expected to rise on January 1. The IRS this past week published rules for some of the first major taxes meant to help pay for Obamacare. Together, they will raise investment and income taxes on top earners and impose a separate -- and controversial -- tax on medical devices. The bundle of fees has been largely overlooked as lawmakers and the White House bicker over the Bush tax rates.
  • Robert Zoellick: Obama Must Focus On a Pro-Growth Budget Package. Robert Zoellick, former president of the World Bank, wrote in a Wall Street Journal op-ed this weekend, “Since the election, President Obama has focused … on taxes. This tactical political positioning is putting at risk ... a pro-growth budget package to reduce U.S. debt. Unless the president pushes to slow the growth of spending, he will fail to strike a deal, undermine U.S. growth prospects, and ultimately erode America’s safety-net programs.” Zoellick concludes, “All major legislative accomplishments require the president to lead in shaping the deal. ... The president needs to represent the country, not just a party.”
  • Shell’s U.S. Chief Expects Green Light for Expanded Natural-Gas Exports. Marvin Odum, the head of Royal Dutch Shell’s U.S. arm, predicts the federal government will provide a green light for expanded exports of natural gas. Odum expects “phased” approvals, and that more exports will be approved as the U.S. gas production boom continues, which will provide a “stronger belief in the resilience and the duration of these resources.” The Energy Department is weighing 15 politically controversial applications to export over 21 billion cubic feet of liquefied natural gas per day to nations that don’t have free-trade agreements with the United States.

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