White House, GOP reach deal on 'fiscal cliff'
Posted: December 31, 2012 at 8:41 a.m.
Updated: December 31, 2012 at 8:14 p.m.
WASHINGTON 8:15 p.m. update
A Democratic aide says the White House and congressional Republicans have reached an agreement to avert the so-called fiscal cliff.
The measure would extend Bush-era tax cuts for family incomes below $450,000 and briefly avert across-the-board spending cuts set to strike the Pentagon and domestic agencies this week.
Vice President Joe Biden was set to sell the agreement to Senate Democrats at a meeting at the Capitol on Monday night.
The aide required anonymity because he wasn’t authorized to speak publicly.
3:30 p.m. update
The House will miss the midnight Monday deadline lawmakers set for voting to avoid the “fiscal cliff.”
House Republicans notified lawmakers that the chamber will vote Monday evening on other bills. They say that will be their only votes of the day.
President Barack Obama and Senate Republican leader Mitch McConnell said Monday they are near a deal to avoid wide-ranging tax increases and spending cuts — the fiscal cliff — that take effect with the new year.
Both men said they were still bargaining over whether — and how — to avoid $109 billion in cuts to defense and domestic programs that take effect on Wednesday.
It remained unclear whether the Senate would vote Monday.
Congress could pass later legislation retroactively blocking the tax hikes and spending cuts.
11:30 a.m. update
The contours of a deal to avert the ‘fiscal cliff’ are emerging that would raise tax rates on couples making over $450,000 a year, raise the estate tax rate and extend unemployment benefits for one year.
That’s according to officials familiar with the negotiations.
The deal in the works would return tax rates on families making over $450,000 to 39.6 percent. The tax on estates worth more than $5 million would increase to 40 percent. And unemployment benefits would continue for one year.
The officials requested anonymity in order to discuss the internal negotiations.
With taxes set to increase for almost every U.S. worker at midnight, there is still no agreement yet and gaps between the two parties remain, according to people familiar with the talks who requested anonymity. Republicans and Democrats were narrowing the threshold for tax increases to between $400,000 and $500,000 in annual income.
“My sense is progress is being made,” Rep. Chris Van Hollen of Maryland, the top Democrat on the House Budget Committee, told Bloomberg Television. “It’s not a done deal. I think it’s a little better than 50 percent that we’re going to be able to avoid going over the fiscal cliff by midnight tonight.”
Talks between Senate Majority Leader Harry Reid and Minority Leader Mitch McConnell stalled Sunday because of disputes over income-tax rates, the estate tax and other issues. McConnell reached out to Vice President Joe Biden in an effort to break the impasse, while staff members worked into the night trading and reviewing offers. The two made progress, according to a person familiar with the negotiations.
Read tomorrow's Arkansas Democrat-Gazette for full details.