Senators To Make Last-Ditch 'Fiscal Cliff' Effort

By Reuters

Published December 28, 2012.
  • Print
  • Share Share
  • Single Page

President Barack Obama and U.S. congressional leaders agreed on Friday to make a final effort to prevent the United States from going over the “fiscal cliff,” setting off intense bargaining over Americans’ tax rates as a New Year’s Eve deadline looms.

With only days left to avoid steep tax hikes and spending cuts that could cause a recession, two Senate veterans will try to forge a deal that has eluded the White House and Congress for months.

Obama said he was “modestly optimistic” an agreement could be found. But neither side appeared to give much ground at a White House meeting of congressional leaders on Friday.

What they did agree on was to task Harry Reid, the Democratic Senate majority leader, and Mitch McConnell, who heads the chamber’s Republican minority, with reaching a budget agreement by Sunday at the latest.

“The hour for immediate action is here. It is now. We’re now at the point where in just four days, every American’s tax rates are scheduled to go up by law. Every American’s paycheck will get considerably smaller. And that would be the wrong thing to do,” Obama told reporters.

A total of $600 billion in tax hikes and automatic cuts to government spending will start kicking in on Tuesday - New Year’s Day - if politicians cannot reach a deal. Economists fear the measures will push the U.S. economy into a recession.

Pessimism about the fiscal cliff helped push U.S. stocks down on Friday for a fifth straight day. The Dow Jones industrial average dropped 158.20 points, or 1.21 percent. Retailers are blaming worries about the “fiscal cliff” for lackluster Christmas season shopping.

Under the plan hashed out on Friday, any agreement between McConnell and Reid would be backed by the Senate and then approved in the Republican-controlled House of Representatives before the end of the year.

But the House could well be the graveyard of any accord.

A core of fiscal conservatives there strongly opposes Obama’s efforts to raise taxes for the wealthiest as part of a plan to close America’s budget deficit. House Republicans also want to see Obama commit to major spending cuts.

Talks between Obama and Republican House Speaker John Boehner collapsed last week when several dozen Republicans defied their leader and rejected a plan to raise rates for those earning $1 million and above.

A Democratic aide said Boehner stuck mainly to “talking points” in Friday’s White House meeting, with the message that the House had acted on the budget and it was now time for the Senate to move.

TALKS ON ‘BIG NUMBERS’

The two Senate leaders and their aides will plunge into talks on Saturday that will focus mainly on the threshold for raising income taxes on households with upper-level earnings, a Democratic aide said. Analysts say both sides could agree on raising taxes for households earning more than $400,000 or $500,000 a year.


The Jewish Daily Forward welcomes reader comments in order to promote thoughtful discussion on issues of importance to the Jewish community. In the interest of maintaining a civil forum, The Jewish Daily Forwardrequires that all commenters be appropriately respectful toward our writers, other commenters and the subjects of the articles. Vigorous debate and reasoned critique are welcome; name-calling and personal invective are not. While we generally do not seek to edit or actively moderate comments, our spam filter prevents most links and certain key words from being posted and The Jewish Daily Forward reserves the right to remove comments for any reason.





Find us on Facebook!
  • Could Spider-Man be Jewish? Andrew Garfield thinks so.
  • Most tasteless video ever? A new video shows Jesus Christ dying at Auschwitz.
  • "It’s the smell that hits me first — musty, almost sweet, emanating from the green felt that cradles each piece of silver cutlery in its own place." Only one week left to submit! Tell us the story of your family's Jewish heirloom.
  • Mazel tov to Chelsea Clinton and Marc Mezvinsky!
  • If it's true, it's pretty terrifying news.
  • “My mom went to cook at the White House and all I got was this tiny piece of leftover raspberry ganache."
  • Planning on catching "Fading Gigolo" this weekend? Read our review.
  • A new initiative will spend $300 million a year towards strengthening Israel's relationship with the Diaspora. http://jd.fo/q3Iaj Is this money spent wisely?
  • Lusia Horowitz left pre-state Israel to fight fascism in Spain — and wound up being captured by the Nazis and sent to die at Auschwitz. Share her remarkable story — told in her letters.
  • Vered Guttman doesn't usually get nervous about cooking for 20 people, even for Passover. But last night was a bit different. She was cooking for the Obamas at the White House Seder.
  • A grumpy Jewish grandfather is wary of his granddaughter's celebrating Easter with the in-laws. But the Seesaw says it might just make her appreciate Judaism more. What do you think?
  • “Twist and Shout.” “Under the Boardwalk.” “Brown-Eyed Girl.” What do these great songs have in common? A forgotten Jewish songwriter. We tracked him down.
  • What can we learn from tragedies like the rampage in suburban Kansas City? For one thing, we must keep our eyes on the real threats that we as Jews face.
  • When is a legume not necessarily a legume? Philologos has the answer.
  • from-cache

Would you like to receive updates about new stories?




















We will not share your e-mail address or other personal information.

Already subscribed? Manage your subscription.