Tax-deal talks stall
WASHINGTON - The White House and congressional leaders worked overtime Sunday to ward off tax increases set to kick in for most Americans, with Republican leaders signaling a grudging acceptance that some taxes will go up and the two parties narrowing their differences over who should pay higher taxes.
After a midday stumble, the two sides worked in private, debating a slimmed-down package that would increase taxes for top wage earners - perhaps hitting incomes somewhere between $360,000 and $450,000 - while preserving income taxes breaks for tens of millions of other Americans.
“There is still significant distance between the two sides, but negotiations continue,” Senate Majority Leader Harry Reid, D-Nev., said on the Senate floor following a closed door meeting with fellow Democrats. “There’s still time left to reach an agreement, and we intend to continue negotiations.”
The signs of progress late Sunday came after a day of drama in which talks appeared to hit an impasse, Reid suggested he could not get the White House to sign off on a counter-offer, and Senate Minority Leader Mitch McConnell, R-Ky., made an open appeal to old Senate colleague, Vice President Joe Biden, to help get talks moving again.
The talks between Reid and McConnell had broken down early Sunday over a Republican proposal to curb the growth of benefits under entitlement programs such as Social Security and Medicare. Unable to get a response from Reid, McConnell turned to Biden, who helped broker deals over tax cuts in 2010 and the debt ceiling in 2011. Biden and McConnell spoke more than three times by phone Sunday, aides said. Republicans eventually dropped their proposal for entitlement changes as part of this potential deal.
Unless Congress acts, the country faces a one-two dose of automatic tax increases and spending cuts, affecting nearly every taxpayer and many government programs. The tax increases would come as all of the Bush-era tax cuts expire at 12:01 am Tuesday. The across-the-board spending cuts kick in days later, part of a package that Congress enacted thinking - falsely - that it would force members to enact more carefully designed cuts.
Democrats proposed extending only those Bush-era tax cuts on individual income below $200,000 and family income below $250,000, raising taxes on income above that. Republicans had been pushing to extend all of the tax cuts.
But late Sunday afternoon, Republicans offered to sign off on raising taxes on individuals earning more than $450,000 while Democrats countered with $360,000, several senators said. Other issues being considered as part of a possible package included extending unemployment benefits for 2 million Americans, preventing about 30 million Americans from having to pay the alternative minimum tax, keeping Medicare payments to doctors at the current rate and extending tax breaks offered to companies and individuals, according to a congressional aide familiar with the talks but not authorized to speak publicly.
The two sides also continued to debate the estate tax, which has been steadily dropping over the past 11 years while the amount exempt from the tax has jumped. Democrats want to raise the current 35 percent level to 45 percent and lower the exemption, now about $5.2 million per person, to $3.5 million. Republicans have indicated they want current rates to prevail.
The overall package being discussed would not stop $109 billion in federal government spending cuts, extend the payroll tax holiday, change Social Security or Medicare or increase the debt limit, which will be reached Monday.
Any agreement would still face significant hurdles with conservatives in the Senate and House complaining about raising any taxes and ignoring the nation’s escalating deficit.
“The biggest obstacle we face is that President Obama and Majority Leader Reid continue to insist on new taxes that will be used to fund more new spending, not for meaningful deficit reduction,” said Sen. Jeff Sessions, R-Ala. “The result is nearly $9 trillion in new debt accumulation over the next decade, which represents virtually no change from current projections.”
Jan 2, 2013 at 12:25 p.m.
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Ditto Fear, ditto.
Jan 1, 2013 at 8:37 p.m.
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Bowlgal you are similar in every fashion. Hiding behind a name and a keyboard, and have seen plenty of name calling from you and your cohorts. Funny to read a post where you act as if you're taking the high road. Looking back at all of your "respectful" posts I do end up laughing when I see you trying to act as an adult.
Stay on that high road. Aren't you the one wh lied about voting for Obama in 2008 just so you could justify bashing him and everythiing Democrats stand for? Very, very mature of you.
DO you think that anyone that regularly posts on these boards walks up in a store and says," Hey are you bowlgal? Man are you a crazy tea party wierdo!" Of course not!! So what on Earth are ou talking about? I have no issue with aspousing my POV to anyone in person. Much of my immediate family are conservative Republicans, I never shy away from a discussion, why should I? Why should anyone? For you or any of the FAR right wiingers on these boards to act as if you are the model of respect and honesty, is in a word HILARIOUS!!
Jan 1, 2013 at 1:19 p.m.
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Does everyone notice how mouse can't be civil with anyone of opposing view points?
Do you think if she were face to face with me or others at the local store, she would resort to such immature name calling? To my face? People like this are usually hiding behind something or someone.
In this case her keyboard.
Tick tock mouse - is this the name you are sticking with once you have to pay to be here?
Jan 1, 2013 at 6:46 a.m.
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Spendthrift obalmy would like nothing better than to go over the "fiscal cliff".
Dec 31, 2012 at 8:57 p.m.
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Tenative ‘fiscal cliff’ deal reached in Senate.
http://news.yahoo.com/blogs/ticket/last-...
Nothing like waiting until the final hour. Tax increases for those making $400K and households $450K and very very little spending cuts (of course). Tax crisis averted for the time being, or so it seems, but what will we do about that nasty debt ceiling?? If it keeps being raised without Government spending cuts, the interest payments will be more than we as a country can make, and that's when the stuff hits the fan. America needs to get back to work, period! When America is working, payroll taxes can help bridge the gap, but when almost 35% of Americans who are able to work, yet can't find jobs, you run into spending problems like we have now. You can NOT tax yourself into prosperity, there's just no way it will work.
Dec 31, 2012 at 5:53 p.m.
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What an embarrassment to our great nation.
Bunch of babies mad because they didn't win something for themselves, so ruin it for everyone else.
These guys and gals just proved once again what a bunch of Morons they really are..
Come election time, remember this, and vote against them all.
And I am talking BOTH parties.
Dec 31, 2012 at 2:11 p.m.
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Just watched the Obama speech. It is obvious to me that he does not want an agreement. His way or no way. Why would you tape an interview for Meet The Press slamming Republicans while Reid and McConnell are trying to negoitiate an agreement? Why would you come out this afternoon and give a speech while delicate negotiations are taking place and basically dare the Republicans to try to do spending control in the future without more tax hikes? I think he is trying to sabotage the prospective deal. That way taxes go up for everyone. He blames the Republicans. In a few months, they lower taxes for some and he takes credit. He uses the extra taxes from those few months to fund his pet projects. I had really hoped for some change after the election from his my way or the highway. Sadly I do not see it. And for those avid supporters of him, are you aware that the Alternative Minimum Tax will now hit any family that is over 45000 income for 2012. He is not taking care of the middle class. He can not get enough money from the rich to fund his projects let alone address the deficit. So the middle class is where the money is to be found. He said he was going to let Congress take care of the issue. So either get behind closed doors and negotiate like a true President would do or keep your mouth shut. Stay off your bully pulpit. IMHO
Dec 31, 2012 at 2:09 p.m.
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No garyprimer: that is the congressional pay raises that were done by executive order
Dec 31, 2012 at 1:19 p.m.
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Was the tax cut extension done by executive order?
Dec 31, 2012 at 12:20 p.m.
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None of them are doing the job they were sent there to do
Just filling their pockets
Dec 31, 2012 at 12:07 p.m.
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Yes, they were bush tax cuts,but Obama extended them instead of letting them expire.Obama owns them.
Dec 31, 2012 at 9:54 a.m.
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Congress and the President are not required to pass anything.
This is the law as it was passed under Bush.
This should be no surprise to anyone.
If you wanted permanent tax cuts, they could have passed them in the original bill,
or they have had ten years to secure them.
Dec 31, 2012 at 9:35 a.m.
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HighRoad is right. When this was passed under Bush, they all knew it would blow a hole in the budget large enough to drive a fleet of semi trucks through. That is why they put a time limit on it. Pathetic way to run a country.
Dec 31, 2012 at 9:11 a.m.
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Well guess what democrats and republicans currently in office. I warned you if there was no deal done you would have a problem. Mess with my paycheck and you have a problem Well now you have a problem you lost my vote no deal no vote. Enjoy your time in office you days are numbered see you at the polls.
Dec 31, 2012 at 9:08 a.m.
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"New Taxes"? Are these actually new taxes? Or, are they spinning not extending tax cuts and loop hole closings as new taxes? To me it is more like the end of the discount.
Dec 31, 2012 at 8:10 a.m.
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congress and senate leaders need to draw more money from you so they can get there raise starting the first of the yr. I am sure the raises will be in the billions to the tax payers.
Dec 31, 2012 at 6:29 a.m.
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They are all a waste of money That is both partys
Even on the state level
All any of them are good for is flap the jaw
Dec 31, 2012 at 5:56 a.m.
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More spending which will negate the tax increases. What a loser POTUS. Do you know Obama's home state of Illinois has more people on welfare than employed? And that doesn't count soc sec. See where we are headed with this doofus?
Dec 30, 2012 at 9:44 p.m.
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I still insist none of them had a right to go on vacation,the country is at stake,and they all go and party,they all should be fired!!
Dec 30, 2012 at 8:57 p.m.
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It is very amazing how this sorry excuse for a president can have the congressional majority for two years and do nothing about the budget. Now that he has won re-election for another tortuous four years he claims to have a plan.
His plan consists of nothing but spending us into oblivion and taxing every american out of house and home and blaming republicans for it. I wonder when or if he will start making our country free instead of fair.
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