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Down To The Fiscal Cliff Wire, With No Solution In Sight
By Brianna Keilar Dana Bash
and Tom Cohen
Call it a bigger, bolder version of the deadline-driven
congressional stalemates over taxes and spending that have
come to define Washington dysfunction of the past two
years.
The latest edition of political “blinksmanship” pits Pres-
ident Barack Obama and Democrats against Speaker John
Boehner and Republicans on how to avoid the fiscal cliff
— automatic tax increases for everyone and deep spending
cuts including the military that will be triggered in the new
year without an agreement.
While the focus now is on a possible agreement in com-
ing days or weeks, anti-tax crusader Grover Norquist told
CNN on Monday that the nation should gird for long-range
battle.
“This is a long fight. It’s four years of a fight. It’s not one
ing a compromise that his colleagues refused to support.
While both sides say they want to avoid the fiscal cliff,
signs are emerging that a deal would come after the new
year to blunt the harshest impacts. Under that scenario, leg-
islators would vote to lower taxes from the higher rates that
will go into effect in January when the Bush cuts expire,
with the new top rates staying intact.
The sources described to CNN three possible options for
moving ahead, all resting with Senate Majority Leader
Harry Reid of Nevada.
One would be to amend a House measure passed in July
that extends the Bush tax cuts for everyone. The changes
would return to higher rates on top brackets, which Obama
defines as family income up to $250,000, and also could
include the president’s call to extend unemployment bene-
fits and some of the fiscal cliff spending cuts.
A second possibility would involve a Senate measure that
Democrats passed in July with no Republican support. It
calls for the Obama plan of extending the cur-
rent tax cuts on family income up to $250,000.
However, the Senate version has a constitu-
tional problem because by law, measures that
raise revenue must originate in the House.
Boehner said Friday that the Senate plan has a
“blue slip” problem, which refers to an objection
that it is unconstitutional and therefore remains
lodged in the Senate.
While one Democratic source said the Senate
version could get taken up in the House if Senate Minority
Leader Mitch McConnell or Boehner don’t raise a blue slip
objection, Republican sources rejected that
scenario.
Reid also could take a different revenue-
raising bill from the House and rewrite it as
a tax and spending measure to address fiscal
cliff issues, the sources explained.
With Republicans holding filibuster
power in the Democratic-majority Senate, at
least seven GOP senators would have to join
Democrats on such a plan before the end of
the year. With McConnell up for re-election in 2014, he is
considered unlikely to risk angering the party’s conserva-
tive base by supporting a compromise or allowing one to
pass on a simple majority vote that would need no GOP
backing, sources said.
In the new Senate that will convene in early January, the
number of Republicans needed to pass a deal would be five
because of Democratic gains in November, when Obama
won re-election.
According to a Senate Republican leadership aide,
Republicans reject Obama’s $250,000 threshold for tax cut
extensions. Meanwhile, a Senate Democratic leadership
aide lamented McConnell’s apparent unwillingness to
Republicans said no to tax cuts, even
for millionaires
week of a fight,” said Norquist, who has threatened to
mount primary challenges against Republicans who violate
a pledge they signed at his behest against ever voting for a
tax increase.
With neither side showing any sign of blinking, however,
the battlefield will probably shift to the Senate this week
after GOP disarray in the House stymied any progress
before Christmas.
Congress and the president are taking a holiday break,
with plans to return to work Thursday to try to find a deal
in the final five days of the year.
Economists warn that failing to avoid the fiscal cliff
could spark recession, and stocks opened lower Monday
amid no sign of the Washington impasse ending.
According to multiple Democratic and Republican
sources, no weekend conversations occurred between the
White House and Senate leaders from either party or their
aides.
The main dispute continues to be over taxes, specifically
the demand by Obama and Democrats to extend most of
the tax cuts passed under President George W. Bush while
allowing higher rates of the 1990s to return on top income
brackets.
Republicans oppose any kind of increase in tax rates, and
Boehner suffered the political indignity last week of offer-
We honor the many
accomplishments of
African Americans.
Page 6 The Seattle Skanner December 26, 2012
negotiate.
“We’re going to be here New Year’s Eve,” retiring Sen.
Joe Lieberman said Sunday on CNN’s “State of the
Union,” adding that it was likely the nation would go over
the fiscal cliff.
Failing to meet the year-end deadline on striking a deal
would amount to “the most colossal, consequential act of
congressional irresponsibility in a long time,” said Lieber-
man, an independent from Connecticut who caucuses with
Democrats. “Maybe ever in American history, because of
the impact it will have on almost every American.”
However, Norquist called the situation part of a longer
process.
“This is not a fight that begins and ends the first week of
January,” he said, predicting “a regular fight” when Con-
gress needs to authorize more government spending and
raise the federal debt ceiling in coming months.
“There the Republicans have a lot of clout because they
can say we’ll let you run the government for the next
month, but you’ve got to make these reforms,” he
explained.
Obama spoke separately Friday with Boehner and Reid
to try to salvage a fiscal cliff deal by the end of year, then
delivered a previously unscheduled statement to reporters
at the White House.
He acknowledged what has become obvious: The broad-
er deficit reduction deal he seeks will probably come in
stages, rather than in the so-called grand bargain he and
Boehner have been trying to negotiate.
In particular, Obama called for Congress to come back
“This is not a fight that begins and
ends the first week of January,”
after Christmas and work with him on a limited agreement
to prevent tax hikes on the middle class, extend unemploy-
ment insurance and set a framework for future deficit
reduction steps.
Boehner’s spokesman said the speaker will be “ready to
find a solution that can pass both houses of Congress”
when he returns to Washington, as now planned for Thurs-
day.
The GOP opposition to any kind of tax rate increase has
stalled deficit negotiations for two years and led to unusu-
al political drama, such as McConnell recently filibustering
a proposal he introduced and Thursday night’s rebuff by
House Republicans of an alternative tax plan pushed by
Boehner, their leader.
Boehner said at a news conference Friday that his Repub-
lican colleagues refused to back his plan, which would
have extended all tax cuts except for income of more than
$1 million, because of fears of being blamed for a tax
increase.
The negotiations with Obama on a broad deficit reduc-
tion agreement hit an impasse last week when both sides
offered their “bottom line” positions, Boehner said. In what
was considered as progress just a week ago, the president
and speaker made major concessions but remained a few
hundred billion dollars apart.
Reid and other Senate Democrats say House Republicans
must accept that agreement will require support from leg-
islators in both parties. He insisted that the Senate-passed
plan with Obama’s $250,000 threshold, which polls show
is strongly supported by the public, would pass the House
if Boehner would allow a vote.
Some House Republicans have said they would join
Democrats in supporting the president’s proposal in hopes
of moving past the volatile issue to focus on the spending
cuts and entitlement reforms they seek.
The possibility of a fiscal cliff was set in motion over the
past two years as a way to force action on mounting gov-
ernment debt.
Now, legislators risk looking politically cynical by seek-
ing to weaken the measures enacted to try to force them to
confront tough questions regarding deficit reduction, such
as reforms to popular entitlement programs such as Social
Security, Medicare and Medicaid.
Polling has consistently shown most Americans back the
president, who insists wealthy Americans must pay more,
rather than Boehner and his Republican colleagues, who
have balked at tax rate hikes and demanded spending cuts
and entitlement program reforms.
A new CNN/ORC International survey last week found
that just over half of respondents believe Republicans
should give up more in any solution and consider the
party’s policies too extreme.