GOP Moving Toward Compromise on Cliff

Friday, 28 Dec 2012 09:42 PM

By Todd Beamon

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As the focus shifted on Friday to the Senate’s top two leaders to hammer out a deal to avert the pending fiscal cliff, many Capitol Hill Republicans feel resigned to accepting whatever is reached to avoid being blamed if the deal fails.

"There's actually been no discussions today about blocking things on the Senate floor," Sen. Bob Corker of Tennessee told the Wall Street Journal earlier on Friday.

Senators, he said, spent Friday morning discussing how they could move a deal forward in Congress — not how to potentially hold one up, the Journal reports.

Sen. Pat Toomey of Pennsylvania posed this scenario, according to the Journal: The Senate could take up a House-passed bill, amend it to extend tax rates for all but the top earners and then pass it with just 51 votes — "at which point, I think it's very likely — frankly — that the House would take it up and pass it."

But anti-tax advocate Grover Norquist was quick to blast those Republicans thinking of moving to a deal, saying tax increases do not represent compromise.

"If you put tax increases on the table, there is never any spending restraint," Norquist said on CNBC's Closing Bell.

Editor's Note: Should Obama and Congress Raise Taxes? Vote Now.

Norquist claimed President Barack Obama's $1 trillion cuts largely came by not occupying Iraq for the next decade. "He wanted to count that like not continuing the War of 1812."


But Norquist's voice seemed to be increasingly isolated as elected representatives fear the GOP will be blamed if taxes go up for the vast majority of Americans.

Instead they were pinning their hopes on  Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell to come up with a compromise in their last-ditch talks to reach an agreement to prevent about $600 billion in spending cuts and tax hikes from taking effect on Jan. 2.

The senior legislators, Democrat Reid of Nevada and Republican McConnell of Kentucky, continued their talks following a meeting with Obama and top congressional leaders — including House Speaker John Boehner and Minority Leader Nancy Pelosi — at the White House.

The move effectively took Obama and Boehner out as primary negotiators in the fiscal cliff talks, which began shortly after the November election. Negotiations between the two broke down last week.

Obama presented no new proposal in the Friday session, but asked for an up-and-down vote on his longstanding plan — which includes raising taxes on those making above $250,000 but offering no major spending reductions — should Reid and McConnell not reach a deal.

"At President Obama's request, I am readying a bill for a vote by Monday that will prevent a tax hike on middle-class families making up to $250,000, and that will include the additional, critical provisions outlined by President Obama," Reid said in a statement after the session.

"In the next 24 hours, I look forward to hearing any good-faith proposals Sen. McConnell has for altering this bill."

Meanwhile, on the Senate floor, McConnell said, "We are engaged in discussions, the majority leader and myself and the White House, in the hopes that we can come forward as early as Sunday and have a recommendation that I can make to my conference and the majority leader can make to his conference.

"So we'll be working hard to try to see if we can get there in the next 24 hours,” he added. “So I'm hopeful and optimistic."

McConnell, however, offered no specifics on what he might include in such a plan.

Senate Republicans have indicated that they could accept a compromise that would raise the tax-increase threshold to $400,000, which is what Obama had agreed to in the broader budget talks with Boehner that broke down last week, the Journal reports.

A senior administration official, however, said on Friday that Obama did not rule out the possibility for moving up to that higher amount.

"We don't want to be proposed something that's lower than what's on the table already," North Carolina GOP Sen. Richard Burr told the Journal.

Raising tax rates on income above $250,000 would bring in roughly $950 billion over 10 years, according to White House estimates — but another estimate suggested that a $500,000 level would only bring in around $740 billion over the next decade because fewer taxpayers would be taxed, the Journal reports.

That $210 billion difference represents 0.5 percent of the $39.77 trillion the White House estimates will be collected in taxes over 10 years, according to the Journal.

Despite the many variables in any potential deal, several conservative observers said they believed McConnell and Reid could reach an agreement.

“Reid and McConnell are good at this,” Fred Barnes of the Weekly Standard, told Fox News anchor Bret Baier. “But in the end, Obama’s going to win this.”

Kirsten Powers of the Daily Beast agreed. “The Democrats are going to get everything they want,” she told Baier. “There’s not going to be some grand bargain on entitlements or anything.

“The Republicans are going to be left holding the bag,” she said.

Editor's Note: Should Obama and Congress Raise Taxes? Vote Now.

Syndicated columnist Charles Krauthammer said “the Republicans have been so recalcitrant because there is the feeling that the Democrats are going to win.”

He, too, praised McConnell’s negotiating prowess — saying that the Minority Leader can work out a deal with Reid.

“With McConnell involved, something is going to come out,” Krauthammer said. “I expect that he and Reid will come up with something that involves raising some taxes on those with higher incomes.”

But if the Senate approves a fiscal cliff plan, and it moves to the House, Boehner faces a dilemma, Krauthammer said.

“If he won’t allow a vote in the House, then he will be seen as the scapegoat,” he said. But if a vote occurs — with 180 Democrats and at least 25 Republicans supporting the plan — “that gives Boehner the upper hand in the debt-ceiling talks.”

The U.S. government will hit its debt limit on Dec. 31. Those talks are to begin once the fiscal cliff issue is resolved.

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