Fiscal cliff countdown: No deal in sight as deadline nears
Updated: December 28, 2012 - 04:27 pm
WASHINGTON (AP) - A person familiar with the details says President Barack Obama is not making a new 'fiscal cliff' offer at his high-stakes meeting with congressional leaders at the White House.
Obama instead is spelling out again a plan he says can pass the House and Senate, said the source, who spoke on condition of anonymity because he was unauthorized to speak publicly about the private meeting. Obama wants a bill to halt looming tax increases on all families making $250,000 a year or less and would extend unemployment insurance to many people about to lose it.
His proposal would also cover other issues as the Jan. 1 deadline nears. If he does not get a counter proposal that can pass both chambers, Obama will press for a straight up-or-down vote on his idea, the source said.
Obama called for the meeting as top lawmakers alternately cast blame on each other while portraying themselves as open to a reasonable last-minute bargain.
Senate Democratic Leader Harry Reid all but conceded that any effort at this late date was a long shot. "I don't know timewise how it can happen now," he said.
For Obama, the 11th-hour scramble represented a test of how he would balance the strength derived from his re-election with his avowed commitment to compromise. Despite early talk of a grand bargain between Obama and House Speaker John Boehner that would reduce deficits by more than $2 trillion, the expectations were now far less ambitious.
Although there were no guarantees of a deal, Republicans and Democrats said privately that any agreement would likely include an extension of middle-class tax cuts with increased rates at upper incomes, an Obama priority that was central to his re-election campaign.
The deal would also likely put off the scheduled spending cuts. Such a year-end bill could also include an extension of expiring unemployment benefits, a reprieve for doctors who face a cut in Medicare payments and possibly a short-term measure to prevent dairy prices from soaring, officials said.
To get there, Obama and Reid would have to propose a package that Senate Republican Leader Mitch McConnell would agree not to block with procedural steps that require 60 votes to overcome.
Maryland congressman Chris Van Hollan is hopeful a deal can be reached by Tuesday, although it will likely be a smaller deal that addresses only the major parts of the fiscal cliff from taking effect.
“Then we've really got to get on with the larger agreement to make sure we sustain a fragile economy and try to get it moving fast,” he says. “And deal with a long-term deficit.”
If a deal were to pass the Senate, Boehner would have to agree to take it to the floor in the Republican-controlled House.
Boehner discussed the fiscal cliff with Republican members in a conference call Thursday and advised them that the House would convene Sunday evening. Rep. Tom Cole, R-Okla., an ally of the speaker, said Boehner told the lawmakers that "he didn't really intend to put on the floor something that would pass with all the Democratic votes and few of the Republican votes."
But Cole did not rule out Republican support for some increase in tax rates, noting that Boehner had amassed about 200 Republican votes for a plan last week to raise rates on Americans earning $1 million or more. Boehner ultimately did not put the plan to a House floor vote in the face of opposition from Republican conservatives and a unified Democratic caucus.
"The ultimate question is whether the Republican leaders in the House and Senate are going to push us over the cliff by blocking plans to extend tax cuts for the middle class," White House communications director Dan Pfeiffer said. "Ironically, in order to protect tax breaks for millionaires, they will be responsible for the largest tax increase in history."
By letting current tax cuts expire and rise, Bernstein and others say, Republicans would be voting to lower taxes next month, even if not for all taxpayers. Democrats - and Obama - would be in a stronger position to demand that taxpayers above the $250,000 threshold pay higher taxes, instead of the $400,000 threshold that Obama proposed in his latest offer to Boehner.
And the debate over spending cuts, including changes to politically sensitive entitlement programs such as Medicare, would have to start anew.
The tax issue in particular has been Obama's first test of muscle after his re-election in November. He ran for a new term calling for higher taxes on the wealthy, and postelection public polls show continued support for his position.
Boehner's decision to support higher rates on million-dollar earners marked a significant break with long-standing GOP orthodoxy, but the resistance among his rank and file so far has trumped him as well as any mandate the president claims.
The Tax Foundation has a tool on its website that lets you calculate your individual taxes and how your family would fare. Compare what your taxes would be under the Obama plan, the Boehner proposal or by falling off the cliff.
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