Sign In | Create an Account | Welcome, . My Account | Logout | Subscribe | Submit News | Contact Us | Home RSS
 
 
 

Last ditch effort to avoid fiscal cliff under way

December 29, 2012
By DAVID ESPO , THE ASSOCIATED PRESS

WASHINGTON - The end game at hand, the White House and Senate leaders made a final stab at compromise Friday night to prevent middle-class tax increases from taking effect at the turn of the new year and possibly block sweeping spending cuts as well.

"I'm optimistic we may still be able to reach an agreement that can pass both houses in time," President Barack Obama said at the White House after meeting for more than an hour with top lawmakers from both houses.

Surprisingly, after weeks of postelection gridlock, Senate leaders sounded even more bullish.

Article Photos

AP PHOTO
Senate Minority Leader Mitch McConnell, R-Ky. arrives at the White House in Washington, Friday, for a closed-door meeting between President Barack Obama and Congressional leaders to negotiate the framework for a deal on the fiscal cliff. The negotiations are a last ditch effort to avoid across-the-board first of the year tax increases and deep spending cuts.

The Republican leader, Sen. Mitch McConnell of Kentucky, said he was "hopeful and optimistic" of a deal that could be presented to rank-and-file lawmakers as early as Sunday, a little more than 24 hours before the year-end deadline.

Said Majority Leader Harry Reid: "I'm going to do everything I can" to prevent the tax increases and spending cuts that threaten to send the economy into recession. He cautioned, "Whatever we come up with is going to be imperfect."

House Speaker John Boehner, a Republican who has struggled recently with anti-tax rebels inside his own party, said through an aide he would await the results of the talks between the Senate and White House.

Under a timetable sketched by congressional aides, any agreement would first go to the Senate for a vote. The House would then be asked to assent, possibly as late as Jan. 2, the final full day before a new Congress takes office.

Officials said there was a general understanding that any agreement would block scheduled income tax increases for middle class earners while letting rates rise at upper income levels.

Democrats said Obama was sticking to his campaign call for increases above $250,000 in annual income, even though in recent negotiations he said he could accept $400,000.

The two sides also confronted a divide over estate taxes.

Obama favors a higher tax than is currently in effect, but one senior Republican, Sen. Jon Kyl of Arizona, said he's "totally dead set" against it. Speaking of fellow GOP lawmakers, he said they harbor more opposition to an increase in the estate tax than to letting taxes on income and investments rise at upper levels.

Also likely to be included in the negotiations are taxes on dividends and capital gains, both of which are scheduled to rise with the new year. Also the alternative minimum tax, which, if left unchanged, could hit an estimated 28 million households for the first time with an average increase of more than $3,000.

In addition, Obama and Democrats want to prevent the expiration of unemployment benefits for about 2 million long-term jobless men and women, and there is widespread sentiment in both parties to shelter doctors from a 27 percent cut in Medicare fees.

 
 

 

I am looking for: