Economy & Budget

Fiscal cliff update Dec. 12: More plans traded

Fiscal cliff update Dec. 12: More plans traded

It’s off the cliff in 19 days, and with Senate Majority Leader Harry Reid (D-Nev.) admitting Tuesday that there’s little chance of a deal before Christmas, time and tensions are growing shorter.

Likewise, as time seems short on a grand bipartisan, big package plan to avert the expiration of the Bush-era tax cuts, President Obama stated in an interview with Barbara Walters of ABC News that he’s “pretty confident that Republicans would not hold middle class taxes hostage to trying to protect tax cuts for high-income individuals.” The pressure in the final week and a half before Christmas once again — as it has for the past four years — focuses on supposed “hostage takers” in the Congressional GOP. Time to turn up the rhetoric, despite the fact that what Speaker of the House John Boehner is asking for in his proposals is not nearly drastic enough to cut government spending sufficiently to give private enterprise the legroom it needs to grow.

Today, however, we learn that the White House and Congress have traded more proposals. The Obama plan has reduced the amount it will take in from revenues, going from $1.6 trillion to $1.4 trillion; yet the House Speaker’s counteroffer remained where it was, seeking $800 billion in new tax revenue generated by the closing of deductions and loopholes.

Developments below, and more throughout the day:

Republicans are preparing to come back to Washington after Christmas to deal with ‘fiscal cliff’
As the logjam over the ‘fiscal cliff’ negotiations continue, it appears that Congressional leaders are increasingly pessimistic that a deal will be reached before Christmas. A senior Republican aide revealed to the National Journal that the House Ways and Means staff told lawmakers to be prepared to come back the week between Christmas and New Year’s.

Politico: Fiscal cliff talks may go past Christmas
Congressional leaders warned lawmakers Wednesday to hunker down for Christmas in Washington, as the fiscal cliff negotiations basically stuck in neutral ahead of a fast-approaching Dec. 31 deadline. The warning followed a phone call Tuesday night between President Barack Obama and House Speaker John Boehner that was described as tense by sources familiar with the call.

National Journal: House GOP Leaders Not Preparing Ground Ahead of Fiscal Cliff Deal
It’s no secret in Washington that Democrats and Republicans are starting to come to grips with the “contours of a deal” that avoids the fiscal cliff. But despite an emerging consensus, House Republican leaders have not yet begun taking the temperature of their rank and file or gaming out the vote.  GOP leadership aides say that neither Speaker John Boehner, Majority Leader Eric Cantor nor Majority Whip Kevin McCarthy have begun to run scenarios or take a preliminary accounting of where the votes might lay for a deal.

WSJ: Corporate Taxes on Table in Cliff Talks
The White House has told Republicans it would include an overhaul of the corporate-tax code as part of any deal to reduce the deficit, people familiar with the talks said, a move to court business groups as budget negotiations intensify. Corporate taxes hadn’t until now been part of budget talks aimed at averting spending cuts and tax increases set for January. Much of the focus has instead been on the expiring individual income-tax rates.

WaPo: Obama, Boehner trade ‘fiscal cliff’ proposals but appear no closer to a deal
President Obama and House Speaker John A. Boehner were struggling late Tuesday to prevent negotiations from breaking down after they traded dueling proposals for averting the year-end “fiscal cliff” that made no progress toward an agreement. Obama telephoned Boehner (R-Ohio) on Tuesday, hours after receiving the speaker’s latest proposal for a deal on taxes and spending. The offer was virtually identical to the document Obama summarily rejected just one week ago, according to Republican aides.

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