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Strong

Senate leaders offer a pessimistic assessment of cliff talks Sunday

The top Senate negotiators on the effort to prevent the government from going over the "fiscal cliff" offered a pessimistic assessment Sunday barely 24 hours before a deadline to avert tax hikes on virtually every worker.

Senate Republican leader Mitch McConnell said he's yet to receive a response to an offer he made on Saturday evening to Majority Leader Harry Reid, D-Nev., the top Democratic negotiator. The Kentucky Republican said he's reached out to Vice President Joe Biden in hopes of breaking the impasse.

Despite indications of progress in the negotiations, Democrats said Republicans were proposing to slow future cost of living increases for Social Security recipients as part of a compromise to avoid the cliff. Democrats rejected the idea. Republicans declined to confirm the assertion _ and one GOP official disputed it _ but noted that President Barack Obama said in a television interview broadcast earlier in the day he had advanced such a proposal in earlier talks with Republicans.

"I'm concerned with the lack of urgency here. There's far too much at stake," McConnell said. "There is no single issue that remains an impossible sticking point _ the sticking point appears to be a willingness, an interest or courage to close the deal."

Reid said he has been trying to come up with a counteroffer but has been unable to do so. He said he's been in frequent contact with Obama, who in a televised interview blamed Republicans for putting the nation's shaky economy at risk.

"We have been talking to the Republicans ever since the election was over," Obama said in the interview on NBC's "Meet the Press" that aired Sunday. "They have had trouble saying yes to a number of repeated offers."

The pessimistic turn came as the House and Senate returned to the Capitol for a rare Sunday session. The fate of the negotiations remained in doubt, two days before the beginning of a new year that would trigger across-the-board tax increases and spending cuts that leaders in both parties have said they want to avoid.

Reid said he is not "overly optimistic but I am cautiously optimistic" but reiterated that any agreement would not include the less generous inflation adjustment for Social Security.

"We're willing to make difficult concessions as part of a balanced, comprehensive agreement, but we'll not agree to cut social security benefits as part of a small or short-term agreement," Reid said.

McConnell and Reid were hoping for a deal that would prevent higher taxes for most Americans while letting rates rise at higher income levels, although the precise point at which that would occur was a major sticking point.

Also at issue were the estate tax, taxes on investment income and dividends, continued benefits for the long-term unemployed and a pending 27.5 percent cut in payment levels for doctors who treat Medicare patients.

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As the Senate opened a rare Sunday session, Chaplain Barry Black offered a timely prayer for lawmakers.

"Lord show them the right thing to do and give them the courage to do it," Black said. "Look with favor on our nation and save us from self-inflicted wounds."

Senate negotiators were haggling over what threshold of income to set as the demarcation between current tax rates and higher tax rates. They were negotiating over estate limits and tax levels, how to extend unemployment benefits, how to prevent cuts in Medicare payments to doctors and how to keep a minimum income tax payment designed for the rich from hitting about 28 million middle class taxpayers.

Hopes for blocking across-the-board spending cuts were fading and Obama's proposal to renew the two percentage point payroll tax cut wasn't even part of the discussion.

Obama pressed lawmakers to start where both sides say they agree _ sparing middle-class families from looming tax hikes.

"If we can get that done, that takes a big bite out of the fiscal cliff. It avoids the worst outcomes. And we're then going to have some tough negotiations in terms of how we continue to reduce the deficit, grow the economy, create jobs," Obama said in the NBC interview.

Gone, however, is the talk of a grand deal that would tackle broad spending and revenue demands and set the nation on a course to lower deficits. Obama and Republican House Speaker John Boehner were once a couple hundred billion dollars apart of a deal that would have reduced the deficit by more than $2 trillion over ten years.

Republicans have complained that Obama has demanded too much in tax revenue and hasn't proposed sufficient cuts or savings in the nation's massive health care programs.

Obama upped the pressure on Republicans to negotiate a fiscal deal, arguing that GOP leaders have rejected his past attempts to strike a bigger and more comprehensive bargain.

"The offers that I've made to them have been so fair that a lot of Democrats get mad at me," Obama said.

Boehner disagreed, saying Sunday that the president had been unwilling to agree to anything "that would require him to stand up to his own party."

Don Stewart, a spokesman for McConnell, said Sunday: "While the president was taping those discordant remarks yesterday, Sen. McConnell was in the office working to bring Republicans and Democrats together on a solution."

The trimmed ambitions of today are a far cry from the upbeat bipartisan rhetoric of just six weeks ago, when the leadership of Congress went to the White House to set the stage for negotiations to come.

"I outlined a framework that deals with reforming our tax code and reforming our spending," Boehner said as the leaders gathered on the White House driveway on Nov. 16.

"We understand that it has to be about cuts, it has to be about revenue, it has to be about growth, it has to be about the future," House Democratic leader Nancy Pelosi said at the time. "I feel confident that a solution may be in sight."

Sen. Dianne Feinstein, D-Calif., said the 2.1 million Americans whose extended unemployment benefits ran out on Saturday are already feeling the pain of Congress' inaction.

"From this point on, it's lose-lose. My big worry is a contraction of the economy, the loss of jobs, which could be well over 2 million in addition to the people already on unemployment. I think contraction of the economy would be just terrible for this nation. I think we need a deal, we should do a deal," Feinstein said on "Fox News Sunday."

But the deal was not meant to settle other outstanding issues, including more than $1 trillion in cuts over 10 years, divided equally between the Pentagon and other government spending. The deal also would not address an extension of the nation's borrowing limit, which the government is on track to reach any day but which the Treasury can put off through accounting measures for about two months.

That means Obama and the Congress are already on a new collision path. Republicans say they intend to use the debt ceiling as leverage to extract more spending cuts from the president. Obama has been adamant that unlike 2011, when the country came close to defaulting on its debts, he will not yield to those Republican demands.

Lawmakers have until the new Congress convenes to pass any compromise, and even the calendar mattered. Democrats said they had been told House Republicans might reject a deal until after Jan. 1, to avoid a vote to raise taxes before they had technically gone up, and then vote to cut taxes after they had risen. (AP:WASHINGTON)

By ANDREW TAYLOR and ALAN FRAM
Associated Press

 

Comments

  1. Sparrows345 says:

    OT political comment:

    The left always squawks about "those wars."

    They still cannot place an amount of military spending that was increased for troop pay, dependent benefits, housing allowances, health care, education expenses. You know..... WELFARE. Something the left is supposed to be in favor of... as long as their program of choice. It's not as if a few trillion of paper money was printed up, put on a barge and taken overseas to be set on fire.

    And it's not if the "right" is any better, for they absolutely are not. All of the chasing of tails while the debt bomb continues to tick down is just a big symptom of denial.

  2. Sparrows345 says:

    It stopped mattering a long time ago "which side" is right.

    Parabolic and exponential increases in debt can no longer be "fixed", blaming this and that is falling into the trap. We know or should anyways, how it's all going to wind up. It won't be pretty. NO amount of cutting spending or raising taxes matters, it's well beyond that.

    That does not automatically mean gold and silver will benefit by the way, they can collapse along with everything else, not like it hasn't happened before.

  3. Will says:

    If you look up the word pathetic in the dictionary on of the listed definitions will be United States Congress.

  4. Steve Starr says:

    We already went off the cliff. The industrial base and manufacturing jobs have been exported and we have watched while our government has eliminated our Constitutional rights and liberties. Wages have been frozen, houses have been foreclosed upon, and the middle class has evaporated.

    Plus our nation owes $16,000,000,000,000+++ (much of which comes from endless military expenditures and war) and we continue to print trillion$$ to purchase our bonds that foreign buyers no longer want. The Weimar solution combined with zero percent interest rates IS the abyss, and we all well on our way to the bottom.

    • Dennis King says:

      The figure owed, including unfunded liabilities (Social Security, Medicare, but not including Obama Care), that was reported is $87 trillion, more than the US assets of $60 trillion, per information from Trim Tabs Investment Research.

      • Gary says:

        I don't understand why people keep referring to Social Security and Medicare as unfunded liabilities. What was all that money I paid in for Social Security and Medicare? Where did it go? Why is it now called unfunded?

  5. dennis king says:

    Obama wants the cliff which he thinks will get him a democrat controlled House in 2014. Everything else is just smoke and mirrors. He insists upon being a non-leader leader and thinks we can't see through him. He actually thinks he can fool most of the people most of the time. We'll see...

    • Gary says:

      Since so many people seem to keep re-electing the jokers that keep us in this mess... maybe he's right. The democrats and Republicans basically do nothing except to vote themselves raises. There's not a shred of leadership in any of them.

  6. Will Harden says:

    Obama is so in love with spending our money that he refuses to back off on it.
    And so as we all gather out on the frozen lake of debt, no one notices that the ice is melting.

  7. Vic says:

    By gosh and by golly even our VP is joining the dance party.

  8. chuck steaks says:

    these guys r screwin wit theus/ the american people~! i havnt reads yet anywers wat to do 2 amk any monies off dis tax increase or its assundry provisions. an wer r da billionairs runin2? wat r dey saelin? i wana buy alibaba? how do i do it? kant beetum,mais as wel join um. hapi neu year? NOT!

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