WASHINGTON (CNN) — Sometime in the next 10 days, a fiscal cliff agreement is likely, but as some analysts describe it, all Congress will really do is ‘kick the can’ down the road another six months only to face this battle again then.
Whatever Congress comes up with in the next 10 days almost certainly won’t be the grand bargain sought by President Barack Obama and House Speaker John Boehner that addresses the nation’s chronic federal deficits and debt.
It may not happen before January 1 either, the trigger date for the automatic tax increases on everyone and deep spending cuts of the fiscal cliff.
“It’s all about scoring political points,” GOP Rep. Ileana Ros-Lehtinen complained Wednesday on CNN, referring to both sides in the debate. “I know the American people are tired of all of us.”
If you are among the American people sick of this impasse, FOX 4 has provided you links below to let your senators, representatives and your President know.
President Obama headed back to Washington Wednesday night from his Hawaiian vacation, leaving behind the first family, to be ready if the Senate comes up with a plan when it returns Thursday from its own Christmas break.
Meanwhile, House Republican leaders held a conference call Wednesday afternoon but made no decision about when to bring their members back to Washington, according to a GOP source on the call. Members were told last week they would receive 48 hours’ notice if they needed to return after Christmas.
The principal dispute continues to be over taxes, specifically the demand by Obama and Democrats to extend most of the tax cuts passed under President George W. Bush while allowing higher rates of the 1990s to return on top income brackets.
Obama campaigned for re-election on keeping the current lower tax rates on family income up to $250,000, which he argues would protect 98% of Americans and 97% of small businesses from rates that increase on income above that level.
Republicans oppose any kind of increase in tax rates, and Boehner suffered the political indignity last week of offering a compromise — a $1 million threshold for the higher rates to kick in — that his colleagues refused to support because it raised taxes and had no chance of passing the Democrat-controlled Senate.
Rep. Nan Hayworth, R-New York, acknowledged Wednesday that a deal will have to include some form of higher rates on top income brackets, but she said her party would fight to make it as minimal as possible.
“If that’s where people have to go, we’ll make the threshold as high as we can,” Hayworth said on CNN, arguing that higher taxes in any form burden economic growth. “Because the more relief we provide, the better off we’ll be.”
Hayworth also made clear that a limited agreement was the most to expect for now, saying: “I don’t think we’re going to get the big plan in the next six days.”
Economists warn that failure to avoid the fiscal cliff could bring a recession, and stocks have been down since the middle of last week, when apparent progress in the talks suddenly unraveled with Boehner proposing his own “Plan B” that was rejected by fellow House Republicans.The Gallup daily tracking poll released Wednesday showed 54% of respondents support Obama’s handling of the fiscal cliff negotiations, compared with 26% who approve of Boehner’s performance.
Sen. Harry Reid, the Democratic majority leader in the Senate, had an approval rating of 34% for his role so far.
Reid is poised to assume a larger role as the focus of negotiations appears to be shifting to the Senate after last week’s GOP disarray in the House stymied any progress before Christmas.
A statement Wednesday by Boehner’s leadership team said the Democratic-controlled Senate must act first on proposals already passed by the House but rejected by Senate leaders and Obama.
“If the Senate will not approve and send them to the president to be signed into law in their current form, they must be amended and returned to the House,” the leadership statement said. “Once this has occurred, the House will then consider whether to accept the bills as amended, or to send them back to the Senate with additional amendments. The House will take this action on whatever the Senate can pass, but the Senate first must act.”
While both sides say they want to avoid the fiscal cliff, signs are emerging that a deal would come after the new year to blunt the harshest impacts.Under that scenario, the new Congress convening in early January would vote to lower taxes from the higher rates that will go into effect in January when the Bush cuts expire, with the new top rates staying intact.
According to a senior administration official, Obama continues to oppose a Republican call for extending the Bush-era tax cuts for everyone to buy time for working out a broader deficit reduction deal that would include overall tax reform.
However, a Senate Republican leadership aide told CNN that Republicans reject Obama’s $250,000 threshold for tax cut extensions.
“We’re going to be here New Year’s Eve,” retiring Sen. Joe Lieberman said Sunday on CNN’s “State of the Union,” adding that it was likely the nation would go over the fiscal cliff.
Failing to meet the year-end deadline on striking a deal would amount to “the most colossal, consequential act of congressional irresponsibility in a long time,” said Lieberman, an independent from Connecticut who caucuses with Democrats. “Maybe ever in American history, because of the impact it will have on almost every American.”
CNN’s Brianna Keilar in Hawaii and Dana Bash, Kevin Bohn and Kevin Liptak in Washington contributed reporting to this story, which was written by Tom Cohen in Washington.