President Obama remains optimistic Senate leaders can reach fiscal cliff deal:
By The Washington Post on December 28, 2012 at 6:16 PM
Obama at the White House, Senate leaders said Friday they will work through the weekend and bring senators back into session on Sunday, in hopes of approving an agreement to protect taxpayers, the unemployed and the nation’s economy from the worst effects of the “fiscal cliff.”
“I’m hopeful and optimistic,” said Senate Minority Leader Mitch McConnell (R-Ky.)
In a televised statement after the meeting, Obama said he had a “good and constructive” meeting with the four congressional leaders. “The hour for immediate action is here. It is now,”’ Obama said.
At the White House, Senate Majority Leader Harry Reid (D-Nev.) and McConnell agreed to try to move forward with a stripped down package.
According to people briefed on the meeting, the developing package would protect millions of taxpayers from the bite of the costly alternative minimum tax and keep unemployment benefits flowing to 2 million people who would otherwise be cut off in Januaary. It is also likely to protect doctors from a steep cut in Medicare reimbursements set to hit in January.
The two sides were still haggling over where to set the threshold for income tax hikes and how to handle the tax on inherited estates. On income taxes, Obama has proposed letting tax rates rise on income over $250,000 a year, but Republicans have in recent days expressed interest in a compromise that would lift the threshold, allowing taxes to rise only for households earning more than $400,000 a year — Obama’s most recent proposal in fiscal cliff negotiations with Boehner.
On the estate tax, Republicans want to maintain the current structure, which exempts estates worth up to $5 million and taxes those at only 35 percent. Obama has proposed a $3.5 million exemption, and a tax rate above that amount of 45 percent.
The Senate leaders’ comments came after Obama called on Republican leaders to support his plan to let taxes rise on income over $250,000 a year or to offer a clear alternative for averting the year-end “fiscal cliff” that could win Democratic support.
As congressional leaders from both parties gathered for a high-stakes meeting at the White House, Obama laid no new offers on the table, according to people familiar with the meeting.
Instead, Obama insisted that the package he outlined in a news conference Friday would pass both the House and the Senate if Republican leaders would stop blocking the legislation and put it to a vote, permitting a majority of lawmakers in both parties to work their will.
If congressional leaders cannot come to an agreement, Obama said in his statement after the meeting that he plans to demand that they permit an “up-or-down vote” on his proposal.
As expected, Boehner told the group assembled for the White House meeting that the House has already acted and would be awaiting Senate action. If the Senate amends a House-passed bill awaiting consideration, Boehner told the group that the House would reconsider the bill “either by accepting or amending” it, according to aides familiar with the meeting.
Those gathered around the table agreed that the next step should be for the Senate to take bipartisan action, the aides said.
After a little more than an hour of talks, Boehner and House Minority Leader Nancy Pelosi (D-Calif.) were seen leaving the White House without speaking to waiting reporters. A White House official said the talks began about 3:10 p.m. EST and ended at about 4:15 p.m.
After the meeting, Reid and McConnell returned to the Capitol, where more than 20 senators from both parties crowded around McConnell on the Senate floor.
Sen. Jon Kyl (R-Ariz.), the senate’s second ranking Republican, said McConnell told fellow Republicans who gathered around him on the floor just after his return from the White House that he was “optimistic” a deal was developing.
However, McConnell shared with colleagues no details of the elements of a possible agreement.
As McConnell appeared to provide them an animated briefing, Reid swept through the hall outside the chamber. Asked about the White House meeting, Reid said, “We have a lot of paths forward, we just have to find out which one we can take.”
When Reid addressed the full Senate moments later, he called the White House meeting “instructive.” He called for the Senate to complete votes Friday night on a bill providing federal aid to states affected by Hurricane Sandy and to reconvene Sunday for meetings and a vote on a deal.
In the meantime, Reid and McConnell vowed to work on an agreement that could be voted on by Sunday. “We’ll be working hard,” McConnell said at one point.
“Whatever we come up with, it’s going to be imperfect,” Reid said as about 80 senators gathered around him on the Senate floor. Several senators were seen nodding in agreement.
Sen. Susan Collins (R-Maine) told reporters outside the Senate chamber that McConnell “seemed to give an optimistic report of the meeting at the White House.”
Sen. Scott Brown (R-Mass.) — who on Thursday jumped the gun by incorrectly announcing that the White House had made a new fiscal cliff offer — was more hesitant to weigh in on Friday when asked what leaders told members about the state of the talks.
“You heard what they said, so I’m going to take him at his word, as I always do,” Brown told reporters as he entered a “Senators Only” elevator off the chamber floor.
President Obama to outline new proposal at last-ditch White House meeting this afternoon:
By The Associated Press on December 28, 2012 at 2:28 PM, updated
Obama was preparing to present a limited fiscal proposal to congressional leaders at a White House meeting Friday, a make-or-break moment for negotiations to avoid across-the-board tax increases and deep spending cuts at the first of the year.
Lawmakers and White House officials held out a slim hope for a deal before the new year, but it remained unclear whether congressional passage of legislation palatable to both sides was even possible.
The Friday afternoon meeting among congressional leaders and the president — their first since Nov. 16 — was likely to center on which income thresholds would face higher tax rates, extending unemployment insurance, and preventing a cut in Medicare payments to doctors, among other issues.
For Obama, the eleventh-hour scramble represented a test of how he would balance strength derived from his re-election against an avowed commitment to compromise in the face of divided government. 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.
A key question was whether Obama would agree to abandon his insistence during the campaign on raising taxes on households earning more than $250,000 a year and instead accept a $400,000 threshold like the one he offered in negotiations with Boehner. Another was whether Republicans would seek a higher income threshold.
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.
If a deal was not possible, it would become evident at Friday’s White House meeting, and Obama and the leaders would leave a resolution for the next Congress to address in January.
Such a delay could unnerve the stock market, which edged lower for a fifth day Friday amid worries that lawmakers would fail to reach a budget deal. Economists say that if the tax increases are allowed to hit most Americans and if the spending cuts aren’t scaled back, the recovering but fragile economy could sustain a traumatizing shock.
Obama called for the meeting as top lawmakers on Thursday 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.
The No. 2 Senate GOP leader, Jon Kyl of Arizona, said it is “pretty unlikely” that Senate Republicans would agree to legislation averting the fiscal cliff if it wouldn’t pass muster in the House. “If you know the House isn’t going to do something, why go through the charade?” he told reporters. “That becomes political gamesmanship.”
Obama and Reid, D-Nev., 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.
Sen. Chuck Schumer of New York said he still thinks a deal could be struck. The Democrat told NBC’s “Today” show Friday that he believes the “odds are better than people think.” Schumer said he based his optimism on indications that McConnell has gotten “actively engaged” in the talks.
Appearing on the same show, Republican Sen. John Thune noted the meeting scheduled later Friday at the White House, saying “it’s encouraging that people are talking.”
But Sen. Bob Corker, R-Tenn., predicted that “the worst-case scenario” could emerge from Friday’s talks. “We will kick the can down the road,” he said on “CBS This Morning.” “We’ll do some small deal and we’ll create another fiscal cliff to deal with the fiscal cliff,” he said. Corker complained that there has been “a total lack of courage, lack of leadership,” in Washington.
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.”
Boehner, McConnell, Reid and House Democratic Leader Nancy Pelosi are all scheduled to attend Friday’s White House meeting with Obama. Vice President Joe Biden will also participate in the meeting, the White House said.
Related stories from syracuse.com:
- Fiscal deal gets closer; Senate leaders to work over next 48 hours (thehill.com)
- ‘Optimistic’ Obama asks Senate to forge fiscal cliff deal (firstread.nbcnews.com)
- Fiscal Cliff Negotiations Continue (huffingtonpost.com)
- Fiscal talks continue in Senate with agreement far from certain (thehill.com)
- Senator Reid issues stern warning about fiscal cliff (watchertimes.wordpress.com)
- Lawmakers to Hold Weekend Talks on Averting Budget Change – Businessweek (businessweek.com)
- How A Last-Ditch Fiscal Cliff Deal Could Pass (huffingtonpost.com)