Last Minute Chance For A Fiscal Cliff Deal?
President Obama will be meeting later this afternoon with the Republican and Democratic leaders from both the House and the Senate and, while there still doesn’t seem to be much optimism that a deal can be reached before the end of the year, word is spreading in Washington of what is likely the last chance to avoid going completely over the fiscal cliff:
WASHINGTON — Congressional leaders prepared for what was looming as a make-or-break White House meeting on the fiscal crisis Friday afternoon as top aides said they were exploring a scaled-back proposal that would prevent tax increases on household income of $400,000 or below.
The potential compromise, which was in the early stages and far from a certainty, was emerging as the top four Congressional leaders — Senator Harry Reid, the majority leader; Senator Mitch McConnell, the Republican leader; Speaker John A. Boehner; and Representative Nancy Pelosi, the Democratic leader — were set to meet with President Obama as a group for the first time in weeks to try to reach a resolution as Congress headed toward a rare New Year’s Eve session.
Congressional officials say staff-level talks between the White House and the Senate Republican leader are centering around a deal that would extend all the expiring Bush income tax cuts up to $400,000 in income. Some spending cuts would pay for a provision putting off a sudden cut in payments to medical providers treating Medicare patients. The deal would also prevent an expansion of the alternative minimum tax to keep it from hitting more of the middle class. It would extend a raft of already expired business tax cuts, like the research and development credit, and would renew tax cuts for the working poor and the middle class included in the 2009 stimulus law. The estate tax would stay at current levels.
It would not stop automatic spending cuts from hitting military and domestic programs beginning on Wednesday, nor would it raise the statutory borrowing limit, which will be reached on Monday. Congressional aides said those issues would be dealt with early next year in yet another showdown.
White House officials denied that any such offer was developing and said that the president was sticking with his insistence that household income only up to $250,000 would be protected from tax increases.
While neither side was confident of any agreement, some top lawmakers said there was still a chance of a breakthrough that could at least avoid the most far-reaching economic effects. “I am hopeful that there will be a deal that avoids the worst parts of the fiscal cliff; namely, taxes’ going up on middle-class people,” Senator Charles E. Schumer, the No. 3 Senate Democrat, said Friday on the “Today” show on NBC. “I think there can be. And I think the odds are better than people think that they could be.”
Word seems to be that Senate Republicans and Democrats are both talking positively about this plan, but the unknown factor, as always, is the House GOP. The White House meeting begins at 3pm. By the close of business today, we should know whether or not we have the beginnings of a deal here or just more of the same old same old.