“Viewpoint” host Eliot Spitzer and Robert Reich, professor at the University of California, Berkeley, discuss the latest fiscal cliff negotiations in Washington. Robert Reich believes Democrats have the power in the budget battle, because the Bush tax cuts for the rich — which Republicans want to extend and Democrats oppose — will expire no matter what anyone agrees on come January.

“The question is, will the Democrats actually hold firm?” Reich asks. Reich also addresses whether limiting tax deductions instad of raising marginal tax rates on the rich could generate the $1.6 trillion in new tax revenues that Obama has set as a goal: “Just by limiting deductions for the wealthy you can’t get anywhere near the $1.6 trillion. … Now if you made the tax on capital gains equal to the tax on ordinary income, maybe that preference would get you closer. But nobody is talking about doing that, unfortunately.”

Reich said that Republicans would be the losers if Congress failed to negotiate a deal to avert the so-called fiscal cliff.

“I think we are moving in the right direction and we are moving in the right direction because the Democrats are holding most of the trump cards,” he said. “If nothing is done, remember, we go back to the Clinton tax rates of the 1990s, which were not all that bad, in fact the economy did quite well under those tax rates. If nothing is done, basically the Republicans lose.”

“And, if the Republicans try to make a case that they are not going to vote for an extension of middle class tax cuts unless the rich also get a tax cut that puts the Republicans in the position of showing America that they are going to hold the middle hostage and they sure are shills for the very rich -- something that a lot of people suspect anyway, but that kind of demonstration is not going to be good for the GOP,” Reich added.

Across-the-board spending cuts are set to go into effect at the beginning of 2013 if Congress fails to pass a budget that reduces the federal deficit. The Bush tax cuts are also set to expire.

Democrats have said they won’t accept any fiscal cliff deal that doesn’t let the tax cuts for the wealthiest Americans to expire, however they want to leave tax rates for middle and lower-income Americans unchanged.

Republicans have said they will oppose any increase in tax rates, but are open to reducing tax write-offs to increase revenue.

“Just by limiting deductions for the wealthy you can’t get anywhere near the $1.6 trillion,” Reich noted.

Robert Reich has served in three national administrations, most recently as secretary of labor under President Bill Clinton. He also served on President-Elect Obama's transition advisory board. He has written twelve books, including The Work of Nations, which has been translated into 22 languages; the best-sellers The Future of Success and Locked in the Cabinet; and his most recent book, Supercapitalism. Mr. Reich is co-founding editor of The American Prospect magazine. His commentaries can be heard weekly on public radio's "Marketplace." In 2003, Reich was awarded the prestigious Vaclav Havel Vision Foundation Prize, by the former Czech president, for his pioneering work in economic and social thought. In 2008, Time Magazine named him one of the ten most successful cabinet secretaries of the century. He received his B.A. from Dartmouth College, his M.A. from Oxford University where he was a Rhodes Scholar, and his J.D. from Yale Law School.

Video courtesy of Current TV.

The long partisan battle last summer over whether to raise the debt ceiling increased the Treasury’s borrowing costs by about $1.3 billion in fiscal year 2011, and the bill is expected to climb, according to the Government Accountability Office.

In a report released on Monday, the investigative arm of Congress found that the battle between Republicans and Democrats over the conditions to increase the debt limit to its current level of $16.4 trillion led to uncertainty in the debt markets and higher borrowing costs. It said that a full accounting would be available later. “Further,” a summary of the report read, “according to Treasury officials, the increased focus on debt limit-related operations as such delays occurred required more time and Treasury resources, and diverted Treasury’s staff away from other important cash and debt management responsibilities.”

Has Congress learned its lesson about the risks of political brinksmanship? Apparently not. For starters, House Speaker John Boehner in May issued the same ultimatum on the debt ceiling that he issued in 2011. He said any debt ceiling increase must be accompanied by an even larger amount of spending cuts.

"The cost of last summer's recklessness by Republicans only continues to grow, yet they seem eager to do it all over again," said Sander Levin, the top Democrat on the House of Representatives' tax-writing committee.

Why can't we just send Mr. Boehner a nice big bill? Or, couldn't we take away his evil, government-run healthcare plan? He should have to pay for wasting money that belongs to the taxpayers.

The average health-care costs for a family of four will top $20,000 in 2012, according to an independent research group, a seven percent increase from 2011. It’s the fifth year in a row that health-care costs have increased between seven and eight percent, part of an overall health-care cost increase that has seen these expenses double since 2002, when the average family of four only paid $9,235. Employers still shoulder the burden of health-care costs, but employees have been paying a larger portion of these costs every year, analysts said.

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