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Reid, McConnell negotiating: 2 days to the fiscal cliff

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Fiscal Cliff Notes for Dec. 29, 2012
2 days to the fiscal cliff


SPOTLIGHT ON REID AND MCCONNELL

The fiscal cliff ball Saturday is in the hands of Senate Majority Leader Harry Reid (D-Nv.) and Minority Leader Mitch McConnell (R-Ky.) who are trying to work out a compromise they can present to their members on Sunday.

It's Saturday and the Senate is at rest and House members are traveling back to Washington in order to be on the job by 6:30 p.m.Sunday.

From McConnell spokesman Don Stewart: "While the House already passed legislation in August to prevent tax hikes (a proposal Sen. McConnell supports), the President and Congressional leaders (Friday) agreed that the Senate must now act. This will require a bipartisan approach. Members of the Senate will continue to work toward producing a bipartisan package in a timely manner to protect American taxpayers and jobs from a massive tax hike in January."


Weather report: Overcast and rainy today, Sunny Sunday. An omen?

On CNN Saturday morning, former FDIC chair Shelia Blair is predicting a deal--with a heavy dose of kicking the can down the road when it comes to meaningful tax reform and deficit reduction. She also predicts Congress will mothball the payroll tax break all earners have been getting for the last two years but will make permanent the tax breaks. The breaks Congress are wrestling with now were put in place starting in 2001 under former President George W. Bush--and reluctantly extended by President Barack Obama in 2010.


As I wrote in my Friday column about the payroll tax:

"If Congress does nothing by Dec. 31, then everyone faces federal income tax hikes in 2013 and a series of spending cuts -- spread over 10 years -- kicks in. Even with a deal, by the way, paychecks will be smaller in 2013 because no one in Congress or the Obama White House is talking about extending the payroll tax cuts in place for the past two years, letting you keep more of your money because of reduced payments for Social Security."

OBAMA SATURDAY ADDRESS: MEET THE DEADLINE

Obama's Saturday address is a rewrite of the Friday statement he made after meeting with the four leaders at the White House. (click below for the entire transcript)

Excerpt:

"We just can't afford a politically self-inflicted wound to our economy. The economy is growing, but keeping it that way means that the folks you sent to Washington have to do their jobs. The housing market is healing, but that could stall if folks are seeing smaller paychecks. The unemployment rate is the lowest it's been since 2008, but already, families and businesses are starting to hold back because of the dysfunction they see in Washington.

"You meet your deadlines and your responsibilities every day. The folks you sent here to serve should do the same. We cannot let Washington politics get in the way of America's progress. We've got to do what it takes to protect the middle class, grow this economy, and move our country forward."

SEN. ROY BLOUNT DELIVERS GOP SATURDAY ADDRESS: FISCAL CLIFF FALL "AVOIDABLE"

Sen. Roy Blount (R-Mo.) in the GOP Saturday address gets to the heart of the disagreement with Obama. Obama wants to let taxes rise on top earners; Republicans do not.

From Blount: "The President's proposal to raise taxes on the top 2 percent of Americans won't even pay one-third of the annual interest that's now owed on this massive $16 trillion debt. In fact, the President's tax hike would only fund the government for eight days. Americans deserve to know: What does the President propose we do for the other 357 days of the year?

"Inaction shouldn't be an option. The problems facing our country are big, but they're not necessarily all that complicated. The President will never have more political capital than he does right now, and the next few days will begin to define his second term. He was elected to lead.

"We still can avoid going over the fiscal cliff if the President and the Democrat-controlled Senate step forward this week and work with Republicans to solve this problem and solve it now."

Click below for Blount transcript.

The White House
Office of the Press Secretary

For Immediate Release December 29, 2012
Weekly Address: Congress Must Protect the Middle Class from Income Tax Hike

Hello Everybody. For the past couple months, I've been working with people in both parties - with the help of business leaders and ordinary Americans - to come together around a plan to grow the economy and shrink our deficits.

It's a balanced plan - one that would protect the middle class, cut spending in a responsible way, and ask the wealthiest Americans to pay a little more. And I'll keep working with anybody who's serious about getting a comprehensive plan like this done - because it's the right thing to do for our economic growth.

But we're now at the point where, in just a couple days, the law says that every American's tax rates are going up. Every American's paycheck will get a lot smaller. And that would be the wrong thing to do for our economy. It would hurt middle-class families, and it would hurt the businesses that depend on your spending.

And Congress can prevent it from happening, if they act now. Leaders in Congress are working on a way to prevent this tax hike on the middle class, and I believe we may be able to reach an agreement that can pass both houses in time.

But if an agreement isn't reached in time, then I'll urge the Senate to hold an up-or-down vote on a basic package that protects the middle class from an income tax hike, extends vital unemployment insurance for Americans looking for a job, and lays the groundwork for future progress on more economic growth and deficit reduction.

I believe such a proposal could pass both houses with bipartisan majorities - as long as these leaders allow it to come to a vote. If they still want to vote no, and let this tax hike hit the middle class, that's their prerogative - but they should let everyone vote. That's the way this is supposed to work.

We just can't afford a politically self-inflicted wound to our economy. The economy is growing, but keeping it that way means that the folks you sent to Washington have to do their jobs. The housing market is healing, but that could stall if folks are seeing smaller paychecks. The unemployment rate is the lowest it's been since 2008, but already, families and businesses are starting to hold back because of the dysfunction they see in Washington.

You meet your deadlines and your responsibilities every day. The folks you sent here to serve should do the same. We cannot let Washington politics get in the way of America's progress. We've got to do what it takes to protect the middle class, grow this economy, and move our country forward.

Thanks, everybody.
*********************************************************************************************************************


"Hi, I'm Senator Roy Blunt from Missouri. As we bring 2012 to a close, leaders in Washington have an opportunity to kick off the New Year by working together to solve some of the big challenges facing our country today.

"At a time when our federal debt's topped a record $16 trillion, it's been more than three years since the Democrat leaders in the Senate have passed a federal budget, and the Senate Majority Leader has refused to bring any appropriations bills to the floor this entire year. There's an old saying that when you fail to plan, you plan to fail, and that's exactly what they've been doing.

"Meanwhile, small businesses and farm families don't know how to deal with the unfair death tax--a tax that the President and congressional leaders have threatened to expand to include even more family farms and even more small businesses.

"More American energy means more American jobs. But unfortunately, energy projects in the United States are being held back by federal obstacles of all kinds, and the Keystone XL Pipeline been hanging in the balance because President Obama has refused to move forward on what should have been an easy decision for more energy and more jobs.

"Republicans hope to work across the aisle to solve these and other critical challenges facing America in the New Year. Divided government is a good time to solve hard problems--and in the next few days, leaders in Washington have an important responsibility to work together and do just that.

"Unless Congress and the President act immediately, every American will be forced to pay for the largest tax hike in our nation's history on January 1st. At the same time, the federal government--including our Armed Forces and defense workers--will undergo deep, across-the-board budgetary cuts. Remember, these are cuts that President Obama promised during the campaign would never take effect. And while we need to reduce spending, we can do it in a much smarter, more targeted way.

"Economists not representing either political party have continually warned that going over the so-called fiscal cliff will lead to devastating job losses at a time when American families and small business owners are still struggling to get back on their feet. In contrast, the nonpartisan Congressional Budget Office estimates that extending tax rates for all Americans would create nearly 1.8 million jobs and increase the nation's Gross Domestic Product by almost 1.5 percent next year.

"Every American taxpayer got a tax cut in 2001, and those tax cuts were good for the economy and good for families. Congress' action to make the first tax bracket 10 percent instead of 15 percent, double the child tax credit, and deal with the marriage penalty in the tax code made a real difference to a whole lot of American families.

"Fortunately, going over the fiscal cliff is avoidable. There's not much time, but there's still time to act. Both President Obama and Senate Majority Leader Harry Reid have claimed that an achievable plan is one that can pass both houses of Congress and Republicans agree.

"The Republican-controlled House has taken a step in the right direction. The House has already passed bills to protect all Americans from burdensome tax increases. In addition, they've passed legislation to replace damaging across-the-board spending cuts with responsible targeted ones, and to bring our nation's record debt under control. But instead of working across the aisle and considering the House-passed plan to protect taxpayers, Senate Democrats have spent months drawing partisan lines in the sand.

"The President's proposal to raise taxes on the top 2 percent of Americans won't even pay one-third of the annual interest that's now owed on this massive $16 trillion debt. In fact, the President's tax hike would only fund the government for eight days. Americans deserve to know: What does the President propose we do for the other 357 days of the year?

"Inaction shouldn't be an option. The problems facing our country are big, but they're not necessarily all that complicated. The President will never have more political capital than he does right now, and the next few days will begin to define his second term. He was elected to lead.

"We still can avoid going over the fiscal cliff if the President and the Democrat-controlled Senate step forward this week and work with Republicans to solve this problem and solve it now."

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Lynn Sweet

Lynn Sweet is a columnist and the Washington Bureau Chief for the Chicago Sun-Times.

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About this Entry

This page contains a single entry by Lynn Sweet published on December 29, 2012 8:03 AM.

President Obama official schedule and guidance, Dec. 29, 30, 2012. was the previous entry in this blog.

Obama Inauguration Guide: Ceremonies muted in 2013 is the next entry in this blog.

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