[The two sides were still haggling over where to set the threshold
for income tax hikes and how to handle the tax on inherited estates. On income
taxes, Obama has proposed letting tax rates rise on income over $250,000 a
year, but Republicans have in recent days expressed interest in a compromise
that would lift the threshold, allowing taxes to rise only for households
earning more than $400,000 a year -- Obama’s most recent proposal in fiscal cliffnegotiations with Boehner.]
By Lori Montgomery and Ed O’Keefe
 |
| The Senate is gridlocked and the House is vacant. Despite President Obama’s early return from Christmas vacation in Hawaii, there’s little progress on a deal to avoid the ‘fiscal cliff.’ The Fix’s Aaron Blake explains the stalemate and assesses the likelihood of a breakthrough. |
After meeting President Obama at the White House, Senate leaders
said Friday they will work through the weekend and bring senators back into
session on Sunday, in hopes of approving an agreement to protect taxpayers, the
unemployed and the nation’s economy from the worst effects of the “fiscal cliff.”
“I’m hopeful and optimistic,” said Senate Minority Leader Mitch
McConnell (R-Ky.)
In a televised statement after the meeting, Obama said he had a
“good and constructive” meeting with the four congressional leaders. “The hour
for immediate action is here. It is now,”’ Obama said. He added, “I’m modestly
optimistic that an agreement can be achieved.”
At the White House, Senate Majority Leader Harry Reid (D-Nev.) and
McConnell agreed to try to move forward with a stripped down package.
According to people briefed on the meeting, the developing package
would protect millions of taxpayers from the bite of the costly alternative
minimum tax and keep unemployment benefits flowing to 2 million people who
would otherwise be cut off in Januaary. It is also likely to protect doctors
from a steep cut in Medicare reimbursements set to hit in January.
The two sides were still haggling over where to set the threshold
for income tax hikes and how to handle the tax on inherited estates. On income
taxes, Obama has proposed letting tax rates rise on income over $250,000 a
year, but Republicans have in recent days expressed interest in a compromise
that would lift the threshold, allowing taxes to rise only for households
earning more than $400,000 a year -- Obama’s most recent proposal in fiscal cliffnegotiations with Boehner.
On the estate tax, Republicans want to maintain the current
structure, which exempts estates worth up to $5 million and taxes those at only
35 percent. Obama has proposed a $3.5 million exemption, and a tax rate above
that amount of 45 percent.
The Senate leaders’ comments came after Obama called on Republican
leaders to support his plan to let taxes rise on income over $250,000 a year or
to offer a clear alternative for averting the year-end “fiscal cliff” that
could win Democratic support.
As congressional leaders from both parties gathered for a
high-stakes meeting at the White House, Obama laid no new offers on the table,
according to people familiar with the meeting.
Instead, Obama insisted that the package he outlined in a news
conference Friday would pass both the House and the Senate if Republican
leaders would stop blocking the legislation and put it to a vote, permitting a
majority of lawmakers in both parties to work their will.
If congressional leaders cannot come to an agreement, Obama said
in his statement after the meeting that he plans to demand that they permit an
“up-or-down vote” on his proposal.
As expected, Boehner told the group assembled for the White House
meeting that the House has already acted and would be awaiting Senate action.
If the Senate amends a House-passed bill awaiting consideration, Boehner told
the group that the House would reconsider the bill “either by accepting or
amending” it, according to aides familiar with the meeting.
Those gathered around the table agreed that the next step should
be for the Senate to take bipartisan action, the aides said.
After a little more than an hour of talks, Boehner and House
Minority Leader Nancy Pelosi (D-Calif.) were seen leaving the White House
without speaking to waiting reporters. A White House official said the talks
began about 3:10 p.m. EST and ended at about 4:15 p.m.
After the meeting, Reid and McConnell returned to the Capitol,
where more than 20 senators from both parties crowded around McConnell on the
Senate floor.
Sen. Jon Kyl (R-Ariz.), the senate’s second ranking Republican,
said McConnell told fellow Republicans who gathered around him on the floor
just after his return from the White House that he was “optimistic” a deal was
developing.
However, McConnell shared with colleagues no details of the
elements of a possible agreement.
As McConnell appeared to provide them an animated briefing, Reid
swept through the hall outside the chamber. Asked about the White House
meeting, Reid said, “We have a lot of paths forward, we just have to find out
which one we can take.”
When Reid addressed the full Senate moments later, he called the
White House meeting “instructive.” He called for the Senate to complete votes
Friday night on a bill providing federal aid to states affected by Hurricane
Sandy and to reconvene Sunday for meetings and a vote on a deal.
In the meantime, Reid and McConnell vowed to work on an agreement
that could be voted on by Sunday.
“We’ll be working hard,” McConnell said at one point.
“Whatever we come up with, it’s going to be imperfect,” Reid said
as about 80 senators gathered around him on the Senate floor. Several senators
were seen nodding in agreement.
Sen. Susan Collins (R-Maine) told reporters outside the Senate
chamber that McConnell “seemed to give an optimistic report of the meeting at
the White House.”
Sen. Scott Brown (R-Mass.) -- who on Thursday jumped the gun by
incorrectly announcing that the White House had made a new fiscal cliff offer
-- was more hesitant to weigh in on Friday when asked what leaders told members
about the state of the talks.
“You heard what they said, so I’m going to take him at his word,
as I always do,” Brown told reporters as he entered a “Senators Only” elevator
off the chamber floor.
Rachel Weiner, David A. Fahrenthold, Paul Kane, Felicia Sonmez and
Rosalind S. Helderman contributed to this report.