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  1. #1
    Senior Member JohnDoe2's Avatar
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    G.O.P. Yields on Fiscal Point, Clearing Way for More Talks

    G.O.P. Yields on Fiscal Point, Clearing Way for More Talks

    By JONATHAN WEISMAN and JOHN M. BRODER
    Published: December 30, 2012

    WASHINGTON — Negotiations over a last-ditch agreement to head off large tax increases and sweeping spending cuts in the new year appeared to resume Sunday afternoon after Republican senators withdrew their demand that a deal must include a new way of calculating inflation that would lower payments to beneficiaries programs like Social Security and slow their growth.

    Senate Republicans emerged from a closed-door meeting to say they agreed with Democrats that the request — which had temporarily brought talks to a standstill — was not appropriate for a quick deal to avert the tax increases and spending cuts starting Jan. 1.

    To hold the line against raising taxes on high-income households while fighting for cuts to Social Security was “not a winning hand,” Senator John McCain, Republican of Arizona, said.

    The concession could be a breakthrough, but Senate Republicans were still balking at an agreement on Sunday, adopting a new talking point that Democrats want to raise taxes just to increase spending, not to cut the deficit. That concern appears to center on a Democratic proposal to temporarily suspend across-the-board spending cuts to military and domestic programs as talks resume on a larger deficit deal.

    The demand for the new way of calculating inflation, known as “chained CPI,” issued at 7:10 p.m. on Saturday, had stopped talks cold. Senator Mitch McConnell, the Republican leader, went to the Senate floor a little after 2 p.m. Sunday to say that Republicans had made their last offer and had yet to receive a reply.

    “I’m concerned about the lack of urgency. I think we all know we’re running out of time,” Mr. McConnell said.

    Senator Harry Reid, the majority leader, responded that “at this stage, we’re not able to make a counter offer.” He said that Mr. McConnell had negotiated in good faith but that “we’re apart on some pretty big issues.”

    Mr. McConnell said he had made an emergency call to Vice President Joseph R. Biden Jr. to get the talks started again. The two spoke twice, and the White House dispatched the president’s chief legislative negotiator, Rob Nabors, to the Capitol to meet with Senate Democrats.

    Talks foundered after Republicans dug in in an effort to get the largest deficit reduction deal in the time remaining, according to numerous Republican and Democratic officials familiar with the negotiations. Republicans told Democrats that they were willing to put off scheduled cuts in payments to health care providers who treat Medicare patients but that they wanted spending cuts elsewhere.

    But it was the inflation calculation that forced Democrats from the negotiating table. President Obama has said that in a “grand bargain” on deficit reduction, he would go along with the change, which would slow the growth of programs whose outlays rise with consumer prices, and would raise more revenue by pushing people into higher tax brackets.

    Democrats said that Mr. Obama and Congressional Democrats would accept that change, called “chained C.P.I.,” only as part of a larger deal that included locking in well more than $1 trillion in revenue over 10 years, along with other Republican concessions. Democrats fear that any such concessions now would only increase demands for addition concessions in the coming weeks, when talks resume on a “grand bargain” to reduce the deficit.

    They point to the $1 trillion in spending cuts agreed to last year in the Budget Control Act. Democrats say those should be included in a $4 trillion “grand bargain” package, but Republicans say those cuts should not be part of future negotiations. Republicans would likely do the same if Democrats agree now to concessions on the inflation calculation, Democratic aides said Sunday.

    Mr. Reid made clear that Democrats did not intend to include Social Security in any stopgap package. Doing so would make it hard for him to round up votes from his own party, and he has resisted touching Social Security.

    “We’re not going to have any Social Security cuts,” Mr. Reid said on the floor.
    The breakdown came after Mr. Obama appeared on the NBC program “Meet the Press” on Sunday and implored Congress to act.

    “We have been talking to the Republicans ever since the election was over,” Mr. Obama said in the interview, which was taped on Saturday. “They have had trouble saying yes to a number of repeated offers. Yesterday I had another meeting with the leadership, and I suggested to them if they can’t do a comprehensive package of smart deficit reductions, let’s at minimum make sure that people’s taxes don’t go up and that two million people don’t lose their unemployment insurance.”

    “And I was modestly optimistic yesterday, but we don’t yet see an agreement,” Mr. Obama said. “And now the pressure’s on Congress to produce.”

    Unless Congress acts by midnight Monday, a broad set of tax increases and federal spending cuts will be automatically imposed on Jan. 1, affecting virtually every taxpayer and government program. The spending cuts were put in place earlier this year as draconian incentives that would force the president and lawmakers to confront the nation’s growing debt. Now, lawmakers are trying to keep them from happening, though it seemed likely that the cuts, known as sequestration, would be left for the next Congress, to be sworn in this week.

    Both sides worry that the confrontational tone that the president took on “Meet the Press” was not helpful.

    Don Stewart, a spokesman for Mr. McConnell, issued a statement criticizing Mr. Obama’s remarks. “While the president was taping those discordant remarks yesterday,” Mr. Stewart said, “Senator McConnell was in the office working to bring Republicans and Democrats together on a solution. Discussions continue today.”

    House Speaker John A. Boehner of Ohio, in his comments, pointed to the president as the problem. Republicans have tried to reach an agreement, Mr. Boehner said, but “the president has continued to insist on a package skewed dramatically in favor of higher taxes that would destroy jobs.”

    Republicans have blamed Mr. Obama for seeking to punish the wealthy with large tax increases and have accused him of not negotiating in good faith. They say his approach would worsen the deficit by protecting Democratic constituency groups from tax increases and benefit reductions while imposing sharp penalties on farmers and small business owners.

    Senator John Barrasso of Wyoming, a member of the Republican leadership, said Sunday on the CNN program “State of the Union” that Mr. Obama was not dealing with the real issue imperiling the economy — the Democrats’ “addiction to spending.”

    The president and party leaders in the House and Senate have been seeking a compromise measure that would protect middle-income families from the worst of the tax increases, but there has been no agreement on where to draw the line. With the Bush-era tax cuts expiring, Mr. Obama and Democrats have said they want tax rates to rise on incomes over $250,000 a year; Republicans want a higher threshold, at perhaps $400,000.

    As part of the last-minute negotiations, the lawmakers have haggled over unemployment benefits, cuts in Medicare payments to doctors, taxes on large inheritances and limits on the impact of the alternative minimum tax, a parallel income tax system that is intended to ensure that the rich pay a fair share but that is increasingly encroaching on the middle class.

    Mr. Obama has said that if talks between the Senate leaders break down, he wants the Senate to schedule an up-or-down vote on a narrower measure that would extend only the middle-class tax breaks and unemployment benefits. Mr. Reid said he would schedule such a vote on Monday absent a deal.

    In his comments, Mr. Obama singled out the top Republican leaders — Senator McConnell and Speaker Boehner — for threatening to derail any deal in order to protect the wealthiest Americans.

    Under questioning from David Gregory, the host of “Meet the Press,” Mr. Obama would not accept any responsibility for the impasse. He blamed Republican intransigence and political “dysfunction” in Washington, and said he had offered multiple reasonable compromises.

    “What is it about you, Mr. President,” Mr. Gregory asked, “that you think is so hard to say yes to?”

    “That’s something you’re probably going to have to ask them,” the president responded, “because, David, you follow this stuff pretty carefully. The offers that I’ve made to them have been so fair that a lot of Democrats get mad at me.”
    Mr. Obama said the priority for Republicans seemed to be “making sure that tax breaks for the wealthiest Americans are protected.”

    At some point, he said, “I think what’s going to be important is that they listen to the American people.”

    Another issue dividing Democrats and Republicans is the tax on inherited estates, which currently hits inheritances over $5 million at 35 percent. On Jan. 1, it is scheduled to rise to 55 percent, beginning with inheritances exceeding $1 million.

    http://www.nytimes.com/2012/12/31/us/politics/obama-accuses-republicans-of-blocking-tax-deal.html?_r=0
    Last edited by JohnDoe2; 01-02-2013 at 12:49 AM.
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  2. #2
    Senior Member JohnDoe2's Avatar
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    No fiscal deal Sunday; Senate to return for dramatic New Year's Eve


    J. Scott Applewhite / AP
    Senate Minority Leader Mitch McConnell of Kentucky, center, arrives at his office in the Capitol as he and Senate Majority Leader Harry Reid of Nevada, try to negotiate a legislative solution to avoid the so-called "fiscal cliff" in Washington, Sunday, Dec. 30, 2012.

    By Michael O'Brien, NBC News

    After a day of talks that were expected to yield some sort of compromise on the so-called fiscal cliff, Senate leaders called off any further votes until Monday morning, just hours before the deadline that will trigger across-the-board tax increases and dramatic cuts in military and domestic spending.

    The Senate will meet again on New Year's Eve, the last full day before the "cliff" takes effect on Jan. 1. Negotiations were expected to continue in the meanwhile.

    A day of wrangling in the Senate came and went without an accord to avoid the fiscal cliff, leaving lawmakers just a matter of hours to sort through thorny issues of taxes and spending that have beguiled Congress for the better part of the past two years.

    Significant distance remains between the two sides and negotiations continue, although the clock continues to tick. Even a simple deal appears far from certain.

    Six proposals for avoiding the fiscal cliff have shuttled between Democrats and Republicans as they debate how government money should be used. NBC's Kelly O'Donnell reports.

    "There is still time left to reach an agreement, and we intend to continue negotiations," Senate Majority Leader Harry Reid, D-Nev., announced early Sunday evening. "We're going to come in at 11 a.m. tomorrow morning. We'll have further announcements, perhaps, at 11 in the morning. I certainly hope so."

    As the Senate struggles to reach an agreement, House members — who were back in Washington on Sunday — were left awaiting any potential legislation from the upper chamber.

    Reid and Senate GOP Leader Mitch McConnell had been tasked by President Barack Obama with developing a bare-bones deal to stave off the automatic tax hikes following the expiration of the 2001 Bush tax cuts at the end of the day on Monday.

    But discussions between the leaders and their staff failed to produce an agreement. Democrats said that a main hangup involved what's known as "chained CPI," a re-calculation of how Social Security benefits grow in outlying years. Democrats regard that proposal, which Obama had previously offered to Republicans in the context of a broader bargain, as a "poison pill" if included in these last-ditch efforts.

    The impasse prompted McConnell to reach out to Vice President Joe Biden, a former senator who's previously helped navigate congressional standoffs, in hopes of jump-starting negotiations. Biden was at the White House on Sunday afternoon.

    But after each leader huddled with his respective party on Sunday, there were few indications of the type of breakthrough needed to end the stalemate in the Senate. Republicans, though, did appear to relent on any demand to include chained CPI in a final deal (though GOP officials denied they had ever seriously proposed it in the first place).

    CNBC's John Harwood says that those who stand to benefit the most from a fiscal cliff deal are the two million Americans who would lose extended unemployment benefits of $300 a month if there is no deal.

    "We have as a conference have come out and said, if that's a show-stopper for the majority leader, we take that off the table," New Hampshire Sen. Kelly Ayotte said following the meeting with fellow Republicans.

    The breakdown in negotiations sets the stage for one of the most dramatic days of political deal-making on Monday, the final day of 2012 and just three days before the next Congress — which won't affect control of either chamber but is slightly more Democratic — is sworn into office on Jan. 3.

    House Speaker John Boehner, R-Ohio, had recalled House members to Washington for a series of rare weekend evening votes on Sunday. Those lawmakers had conceivably been asked to return to vote on whatever agreement Senate leaders might be able to forge. But absent any legislation, which would not come before Monday morning, House members' presence was largely superfluous.

    Obama had asked Reid to prepare a vote on fallback legislation to preserve tax rates on income under $250,000 and extend expiring unemployment benefits in case Senate talks fell through. Democrats showed no signs of backing off that intention, though it is unclear whether Boehner would allow that legislation to even come to a vote in the House.

    The President has repeatedly blamed Republicans for the fiscal cliff stalemate -- and he doubled down on that criticism during an exclusive interview with David Gregory. NBC's Kristen Welker has more.

    "Now the pressure's on Congress to produce," Obama said in an interview on NBC's "Meet the Press," which aired Sunday.

    The hold-up on Capitol Hill appeared, though, to involve several unresolved issues. First, lawmakers must reach an agreement on the threshold of income beneath which current tax rates would be extended. Second, they must resolve what elements of spending — unemployment benefits, for instance — or commensurate cuts (to offset the cancellation of the automatic spending cuts, known as the sequester) to include in a final package.

    "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," Sen. Jeff Sessions, R-Ala., Republicans' budget chief, said in a statement.

    http://firstread.nbcnews.com/_news/2012/12/30/16254655-no-fiscal-deal-sunday-senate-to-return-for-dramatic-new-years-eve?lite
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  3. #3
    Senior Member JohnDoe2's Avatar
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    Senior Member JohnDoe2's Avatar
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