Congressional leaders on both sides of the aisle seem to think they can reach a deal to avoid the fiscal cliff coming at the end of the year:
(Reuters) – Leading U.S. lawmakers expressed confidence on Sunday that they could reach a deal to avert the “fiscal cliff” even as they laid down markers on taxes and spending that may make any agreement more difficult.
Republicans and Democratic leaders have agreed on a framework to reform the tax code and government benefit programs next year, but first need to prevent across-the-board tax increases and spending cuts due to begin in January that could push the economy back into recession.
That toxic $600 billion combination, known as the fiscal cliff, is the legacy of earlier failed budget deals. Both sides say they see greater willingness to compromise this time.
“What I hear is a perceptible change in rhetoric from the other side,” Dick Durbin, the No. 2 Senate Democrat, said on CNN’s “State of the Union” program. “And what it is is an invitation for our side to basically sit down and say, ‘What can we do for this country?’”
Taxes are the biggest hurdle.
President Barack Obama campaigned on a promise to raise tax rates on the wealthiest 2 percent of households, who have benefited more than the rest of the population over the past several decades as globalization and technology have transformed the U.S. economy. He wants to extend low tax rates for the bottom 98 percent of the population, but said he will not sign a budget deal that keeps low rates for the wealthiest in place.
Nancy Pelosi, the top Democrat in the House of Representatives, echoed this view. Though Republicans control the House, they will probably need Democratic votes to get any deal passed.
“If it’s going to bring in revenue, the president has been very clear that the higher-income people have to pay their fair share,” she said on ABC’s “This Week.”
A top Republican, Representative Tom Price, said his colleagues recognize the need to generate more tax revenue even as he said any tax-rate increase on the wealthy would lead to job losses.
Frankly, I can’t say that I have as much confidence as these leaders do. The best that I can see coming out of the lame duck session is something that kicks the can down the road at this point.
