The Clinton Herald, Clinton, Iowa

AP story section

December 27, 2012

No deal in sight as deadline for fiscal deal nears

WASHINGTON, D.C. —  A last-gasp effort Thursday to avoid automatic tax increases and spending cuts got off on the same convulsive, partisan tone that marked congressional attempts to resolve the impasse before lawmakers left Washington to go home for Christmas.

With a Dec. 31 deadline for an agreement to avert the so-called “fiscal cliff” rapidly approaching, leaders in each party demanded the other side take the initiative. The new flare-up happened despite a round of calls that President Barack Obama made to congressional leaders by phone Wednesday night from Hawaii before he boarded Air Force One to head home from vacation.

Obama’s plane landed in late morning at a suburban Maryland Air Force base, not long after Majority Leader Harry Reid took to the Senate floor to chastise House Republicans who last week opposed Speaker John Boehner’s efforts to pass a narrowly crafted bill. Boehner’s “Plan B” would have raised tax rates only on the very wealthiest Americans. But the opposition within his own party caucus forced the Ohio Republican to cancel a vote on the bill.

Reid charged Thursday that the House was “being operated with a dictatorship of the speaker.”

“John Boehner seems to care more about keeping his speakership than about keeping the nation on sound financial footing,” the Nevada Democrat said on the Senate floor.

Upon his return from a brief vacation, Obama was facing what has become a familiar 11th-hour scenario — one the GOP says is his fault — and even a stopgap solution was in doubt.

Without congressional action, current tax rates will expire on Dec. 31, resulting in a $536 billion tax increase that would touch nearly all Americans. Moreover, the military and other federal departments would have to cut $110 billion in spending.

But while economists have warned about the economic impact of tax hikes and spending cuts of that magnitude, both sides are increasingly proceeding as if Congress could still act in January in time to retroactively counter the effect on most taxpayers and government agencies without causing economic harm.

The issue has been Obama’s first test of muscle after his re-election in November. Obama ran on a theme of having the wealthy pay a greater share toward deficit reduction with a focus on raising upper tax rates for individuals earning $200,000 or more and couples making more than $250,000. In negotiations with Boehner toward a deficit reduction plan of more than $2 trillion over 10 years, he offered to increase that threshold to $400,000, but those negotiations collapsed.

House GOP leaders this week put the burden on Reid, urging him in a statement Wednesday to take up a House-passed bill that would extend current tax rates to all taxpayers, a bill Obama has vowed to veto.

Reacting to Reid’s floor remarks Thursday, Boehner spokesman Brendan Buck said: “Harry Reid should talk less and legislate more if he wants to avert the fiscal cliff. The House has already passed legislation to do so.”

The White House said Obama, before leaving Hawaii, called Boehner, Reid, Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi. The White House statement said the president got an update on the “fiscal negotiations,” but offered no detail on who, exactly, was negotiating and whether those talks were getting anywhere.

McConnell’s office said Obama’s phone call was the first from a Democrat on the fiscal cliff since Thanksgiving.

Last Friday, Obama and Reid voiced support for a proposal that would extend current rates to taxpayers with earnings up to $200,000 and families with earnings up to $250,000. Taxpayers above those thresholds would see their top rates rise. The proposal would have included extended aid to unemployed workers and some surgical cuts to avoid steeper and broader spending cuts.

For the Senate to act would require a commitment from McConnell not to demand a 60-vote margin to consider the legislation on the Senate floor. McConnell’s office says it’s too early to make such an assessment because Democrats have not put forward a specific plan and have been unclear on whether extended benefits for the unemployed would be paid for with cuts in other programs or on how it would deal with an expiring estate tax, among other issues.

The questions hanging over Washington Thursday centered on whether Reid would offer a specific piece of legislation, whether McConnell would allow it to proceed to a vote on the Senate floor and, if the Senate bill passed, whether Boehner would then call House lawmakers back to Washington to vote on it. All those issues remained unresolved, and success before the end of the year appeared a long shot at best.

Reid said the GOP-controlled House easily could have passed a White House-approved plan with a majority of Democratic votes and a few dozen Republican votes. But House leaders generally avoid such tactics, because they might alienate the Republican caucus and jeopardize the speaker’s job.

The House has passed a Republican plan to avert the fiscal cliff, and the Senate has passed a Democratic version. Their deficit-reduction projections differ by hundreds of billions of dollars over 10 years.

Adding to the mix of developments pushing toward a “fiscal cliff,” Treasury Secretary Timothy Geithner on Wednesday informed Congress that the government was on track to hit its borrowing limit on Monday and said he would take “extraordinary measures as authorized by law” to postpone a government default.

Still, he added, uncertainty about the outcome of negotiations over taxes and spending made it difficult to determine how much time those measures would buy

Text Only
AP story section
  • Bridge collapse Wash. I-5 bridge collapse caused by oversize load

    A truck carrying an oversize load struck a bridge on the major thoroughfare between Seattle and Canada, sending a section of the span and two vehicles into the Skagit River below, though all three occupants suffered only minor injuries.

    May 24, 2013 1 Photo

  • Oklahoma Tornado-3 $2B in tornado damage means hard recovery MOORE, Okla. -- All that is left of Shayne Patterson's three-bedroom home is the tiny area where his wife hunkered down under a mattress to protect their three children when a tornado packing winds of at least 200 mph slammed through his neighborhood

    May 23, 2013 3 Photos

  • Iowa lawmakers have deal on low-income health care

    After staunchly opposing an expansion of Iowa's Medicaid program using federal funds, Gov. Terry Branstad has agreed to seek the funding for an alternate health plan for low-income residents.

    May 23, 2013

  • Oklahoma Tornado Residents come home to pick up the pieces MOORE, Okla. (AP) -- With her son holding her elbow, Colleen Arvin walked up her driveway to what was left of her house for 40 years. It was the 83-year-old grandmother's first time back at her home since a monstrous and deadly tornado ravaged her ne

    May 22, 2013 3 Photos

  • Iowa lawmakers look to end legislative session

    Iowa lawmakers are expected back in the state Capitol on Wednesday and legislative leaders say they are close to concluding the 2013 session.

    May 22, 2013

  • Gas Prices Gas prices up 11 cents over past 2 weeks CAMARILLO, Calif. (AP) -- The average U.S. price of a gallon of gasoline has jumped 11 cents over the past two weeks. The Lundberg Survey of fuel prices released Sunday says the price of a gallon of regular is $3.66. Midgrade costs an average of $3.8

    May 20, 2013 1 Photo

  • HIV Teacher Assault HIV-infected teacher's aide accused of molestation ST. LOUIS -- An Illinois special-needs teaching assistant accused of molesting a teenage student in school while knowingly infected with HIV remained jailed Tuesday as police investigated another claim of similar misconduct by the man involving a dif

    May 15, 2013 1 Photo

  • Drunken Driving Zero Deaths Tougher threshold recommended WASHINGTON, D.C. -- States should cut their threshold for drunken driving by nearly half -- from .08 blood alcohol level to 0.5 -- matching a standard that has substantially reduced highway deaths in other countries, a U.S. safety board recommends. T

    May 15, 2013 1 Photo

  • 5-10-13 Office Wrap party photo Scranton shared close bond SCRANTON, Pa. -- NBC's long-running "The Office" was a faux documentary about cubicle life. The Scranton branch of Dunder Mifflin Paper Co. didn't exist. Try telling that to merchants, tourism officials and regular folks here in the real-world city

    May 10, 2013 1 Photo

  • Baby Names King, Messiah: New baby names suggest high hopes WASHINGTON — Talk about high expectations for a newborn: King and Messiah are among the fastest-rising baby names for American boys. They're just a little behind Major, the boy's name that jumped the most spots on the Social Security Administration

    May 10, 2013 1 Photo

AP Video
Facebook
News Digest