If Cut, Fiscal Deal Will Pale Against Expectations
That means Obama and the Congress are already on a new collision path. Republicans say they intend to use the debt ceiling as leverage to extract more spending cuts from the president. Obama has been adamant that unlike 2011, when the country came close to defaulting on its debts, he will not yield to those Republican demands.
As the day ended Saturday, there were few signs of success on a scaled-back deal. But no one was declaring a stalemate either.
Lawmakers have until the new Congress convenes to pass any compromise, and even the calendar mattered. Democrats said they had been told House Republicans might reject a deal until after Jan. 1, to avoid a vote to raise taxes before they had technically gone up, and then vote to cut taxes after they had risen.
Republicans said they were willing to bow to Obama's call for higher taxes on the wealthy as part of a deal to prevent them from rising on those less well-off.Democrats said Obama was sticking to his campaign call for tax increases above $250,000 in annual income, even though he said in recent negotiations he said he could accept $400,000. There was no evidence of agreement even at the higher level. Obama, who once proposed nearly $1.6 trillion in tax revenue over 10 years, would get about half of that if he succeeded in getting a $250,000 threshold over 10 years. At a $400,000 level, the revenue figure drops to about $600 billion over a decade. Republicans want to leave the estate tax at 35% after exempting the first $5 million in estate value. Officials said the White House wants a 45% tax after a $3.5 million exemption. Without any action by Congress, it would climb to a 55% tax after a $1 million exemption on Jan. 1. Obama's proposal would generate more than $100 billion in additional revenue over 10 years. Democrats stressed their unwillingness to make concessions on both income taxes and the estate tax, and hoped Republicans would choose which mattered more to them. Associated Press writer David Espo contributed to this article Follow Jim Kuhnhenn on Twitter: http://twitter.com/jkuhnhenn ___ Associated Press writer David Espo contributed to this article. ___ Follow Jim Kuhnhenn on Twitter: http://twitter.com/jkuhnhenn
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