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Every day, representatives from both sides of the aisle have come out to update the world on the progress (or lack of progress) on fiscal cliff deal talks.But it can be difficult to decipher the political rhetoric.
Are they really making any progress?
Art Cashin offers a proxy for fiscal cliff deal progress in this morning’s Cashin’s Comments (emphasis ours):
A Key To Watch On The Fiscal Cliff – The President’s call for contingency plans for yearend made some headlines but doesn’t tell us a great deal.
As I said yesterday, there are several mini-deadlines before January. Congress is due to adjourn on December 21 so the last day to introduce a bill is December 18th. Also, the President is due to head for Hawaii on December 17. Hard to envision that trip without some kind of deal. If he leaves without a deal – that would be a very bad omen.
Another key area to watch is payroll withholding schedules. If taxes are going to change, the Treasury will have to direct companies to prepare new withholding schedules that can be effective and implemented on January 1. That is not an overnight project. Failure to call for the preparation of new schedules hints that the Treasury believes a viable deal is still within reach. We think withholding schedules are a thing to monitor very carefully.
So, if they’re not making real progress, then companies will have to begin prepping for these new schedules.