"There is no more 'let's do it some other time,'" said Senate Majority Leader Harry Reid, D-Nev. "We're going to do it now. ... We feel very comfortable with each other, and this isn't something we're going to wait until the last day of December to get it done."
Obama favors $1.6 trillion in higher taxes over the next decade, in part by allowing existing cuts to expire on Dec. 31 on higher incomes.
White House officials claim an overall deficit reduction package totaling more than $4 trillion, although that includes $1 trillion in spending cuts agreed to last year, and an additional $1 trillion in spending no longer needed for the wars in Iraq and Afghanistan. Republicans and independent fact checkers dispute the claimed savings from the two wars, since the money was borrowed in the first place.
Whatever the obstacles to a deal, there is little dispute about the cost of failure.Under current law, tax cuts that took effect more than a decade ago will expire at all income levels at the end of the year, as will Bush-era reductions for investors, married couples, families with children and others. The 2 percent payroll tax cut would end, and an additional 26 million taxpayers would come under the alternative minimum tax. As well, the defense budget would be cut by $55 billion, and domestic programs would incur a reduction of the same size. Unemployment benefits for some of the longest-term jobless also expire at the end of the year. Boehner has said previously that any agreement should include an increase in the national debt limit, now $16.4 trillion. The Treasury is expected to hit that cap sometime in the next few months. ___ Associated Press writers Ben Feller and Andrew Taylor contributed to this story.