Obama Says Fiscal Cliff Deal Close, Not Done

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President ObamaBy DAVID ESPO and JULIE PACE

WASHINGTON (AP) - Agonizing close to a New Year's Eve compromise, the White House and congressional Republicans agreed Monday to block across-the-board tax increases set for midnight, but held up a final deal as they haggled away the final hours of 2012 in a dispute over spending cuts.

"It appears that an agreement to prevent this New Year's tax hike is within sight," President Barack Obama said in an early-afternoon status report on negotiations. "But it's not done."

Senate Republican Leader Mitch McConnell - shepherding final talks with Vice President Joe Biden - agreed with Obama that an overall deal was near. In remarks on the Senate floor, he suggested Congress move quickly to pass tax legislation and "continue to work on finding smarter ways to cut spending" later next year.

Democrats declined the offer, at least for the time being.

While the deadline to prevent tax increases and spending cuts was technically midnight, passage of legislation within the next 72 hours - a timetable under consideration - would eliminate or minimize any inconvenience for taxpayers.

For now, more than the embarrassment of a gridlocked Congress working through New Year's Eve in the Capitol was at stake.

Economists in and out of government have warned that a combination of tax hikes and spending cuts could trigger a new recession, and the White House and Congress have spent the seven seeks since the Nov. 6 elections struggling for a compromise to protect the economy.

Even now, with time running out, partisan agendas were evident.

Obama used his appearance to chastise Congress, and to lay down a marker for the next round of negotiations early in 2013 when Republicans intend to seek spending cuts in exchange for letting the Treasury to borrow above the current debt limit of $16.4 trillion.

"Now, if Republicans think that I will finish the job of deficit reduction through spending cuts alone - and you hear that sometimes coming from them ... then they've got another thing coming. ... That's not how it's going to work at least as long as I'm President," he said.

"And I'm going to be President for the next four years, I think," he added.

Officials in both parties said agreement had been reached to prevent tax increases on most Americans, while letting rates rise on individual income over $400,000 and household earnings over $450,000 to a maximum of 39.6 percent from the current 35 percent. That marked a victory for Obama, who campaigned successfully for re-election on a platform of requiring the wealthy to pay more.

Any agreement would also raise taxes on the value of estates exceeding $5 million to 40 percent, as well as extend expiring jobless benefits for two million unemployed, prevent a 27 percent cut in fees for doctors who treat Medicare patients and likely avoid a near-doubling of milk prices.

Much or all of the revenue to be raised through higher taxes on the wealthy would help hold down the amount paid to the Internal Revenue Service by the middle class.

In addition to preventing higher rates for most, any agreement would retain existing breaks for families with children, for low-earning taxpayers and for those with a child in college.

In addition, the two sides agreed to prevent the Alternative Minimum Tax from expanding to affect an estimated 28 million households for the first time in 2013, with an average increase of more than $3,000. The law was originally designed to make sure millionaires did not escape taxes, but inflation has gradually exposed more and more households with lower earnings to its impact.

To help businesses, the two sides also agreed to extend an existing research and development tax credit as well as other breaks designed to boost renewable energy production. Details on those provisions were sketchy.

Obama's remarks irritated some Republicans.

Sen. John McCain of Arizona they would "clearly antagonize members of the House."

There was no response from Speaker John Boehner, who has been content to remain in the background while McConnell did the negotiating.

Some Democratic officials said that with his comments, he was hoping to ease the concerns of liberals in his own party who feared he had given away too much in the current round of talks over taxes.

Obama campaigned on a call for higher tax rates on income over $200,000 for individuals and $250,000 for couples, far lower than the $400,000 and $450,000 that Biden and McConnell have set.

Similarly, the pending agreement on the estate tax would allow more large estates to escape taxation than many Democrats prefer.

By late afternoon, the two sides remained separated by a stubborn dispute over spending cuts scheduled to take effect on the Pentagon and domestic programs alike.

Officials familiar with the talks said the White House has been seeking agreement to stop the cuts from taking effect, either for a period of months or a year, and wanted to count higher taxes created elsewhere in the legislation to offset the cost.

Republicans have said they are willing to delay the across-the-board cuts, but only if Obama and Democrats agree to targeted savings from government programs to take their place.

_____

Associated Press writers Andrew Taylor, Alan Fram and Ben Feller contributed to this report.

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Leonard

there is hope for stupid people but we have a lot of crazy folks making post here. Lets wait and see how they do

December 31 2012 at 8:23 PM Report abuse +1 rate up rate down Reply
mrspelosi

Happy New Year darlings!

Me, President Obama, and Harry Reid have all agreed that our new years resolution will be to continue to not compromise on anything.

See you later dearest darlings. Be safe tonight.

December 31 2012 at 6:30 PM Report abuse rate up rate down Reply
ragtopdaz

Let the Champaign corks pop tonight, all in Congress got their wish, cuts on people who paid into the system. More money to spend in new tax revenue on those who never paid into the system

Let the insider trading begin for Congress in the new year.

There is money to be made out there.. Ask Nancy. She has a stack of new bills she wants to pass as well as others she wants to block.


Nancy Pelosi never read the health care bill but she sure read all the insider trading stock tips sent to her..
Nancy Pelosi Blocked Credit Card Reform While Investing Millions in Exclusive Visa Stock Offering


Former Speaker of the House–and current Minority Leader–Nancy Pelosi apparently bought $1 million to $5 million of Visa stock in one of the most sought-after and profitable initial public offerings (IPO) in American history, thwarted serious credit card reform for two years, and then watched her investment skyrocket 203%.
Her response to a reporter when asked about this was " What's your point? I did nothing wrong."

December 31 2012 at 6:21 PM Report abuse rate up rate down Reply
democrackso

Obama and the democrats got their new years wish. Taxes will go up on everyone. That was their plan all along.

December 31 2012 at 6:08 PM Report abuse -2 rate up rate down Reply
ragtopdaz

Most of the Democrats in office now are a prime example of what happened when the Government cut most of the funding to the mental health agencies. Instead of being locked up now they are running this country..
Just like Evan who has 10 or more screen names and likes responding to his own comments.


Evan why don't you just go and eat the hot pockets and drink the Obama kool aid that you paid for with your food stamps..
That and there are services out there to help get you off of that crack pipe...
Your vision of the anointed one are flawed as are his plans for destroying this country..

December 31 2012 at 5:43 PM Report abuse rate up rate down Reply
coochiescooter

Hey Somey you can bait the hooks for night fishin, y'all can be the master baiter !

December 31 2012 at 5:35 PM Report abuse -2 rate up rate down Reply
ragtopdaz

Obama needs to spend some time with Dr. Phil to work on his God complex, he still thinks that all of his followers still believe that he is their anointed one who can walk on water and provide Manna From Heaven
in the form of more food stamps and section 8 housing.

December 31 2012 at 5:13 PM Report abuse -1 rate up rate down Reply
coochiescooter

Hey Somey are you sure you all don't want to come down Gator huntin tonight ? Good vittles on the grill with all the fixins.

December 31 2012 at 4:54 PM Report abuse +2 rate up rate down Reply
coochiescooter

BOAHICA

December 31 2012 at 4:52 PM Report abuse rate up rate down Reply
democrackso

democrackso1
END BOOZE!!!! PROHIBITION AGAIN!!!!
++++++++++++++++++++++++++++++++++++++++++

Just for you. You really shoudn't be selling your foodstamps to buy that anyway.

December 31 2012 at 4:26 PM Report abuse -3 rate up rate down Reply