The outlook for a deal to avert the "fiscal cliff" by Christmas is increasingly grim, though lawmakers and the White House still have hope for a deficit-reduction compromise by the end of the year.
Republicans will move forward tonight with a vote to pass House Speaker John Boehner's so-called "Plan B option" – an extension of current tax rates for Americans making up to $1 million a year while replacing some pending automatic cuts to defense and domestic programs with other measures.
The step seeks to show Republicans acting to avoid an income tax hike on 99 percent of Americans in 2013, and leverage new pressure on President Obama in the ongoing talks for a broader "cliff" deal.
"Absent a balanced offer from the president, this is our nation's best option and Senate Democrats should take up both of these measures immediately," House Majority Leader Eric Cantor said today.
Obama has threatened to veto the legislation, calling it counterproductive and the cuts burdensome for the middle class. If the Senate were to consider the bill to stave off a looming tax hike, Democrats would surely amend it to enact more amicable terms.
Jacquelyn Martin/AP Photo
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The posturing over "plan B" has drawn focus away from a broad deficit-reduction bargain to address taxes, spending, entitlement reforms and other measures that had begun coming into focus earlier this week.
Obama and Boehner have not spoken since Monday, though staff-level talks have continued behind the scenes.
Senate Majority Leader Harry Reid said lawmakers would break for the Christmas holiday but return to Washington one week from today.
"If you look at Speaker Boehner's proposal and you look at my proposal, they're actually pretty close," Obama said Wednesday, appealing for a big "fair deal."
"It is a deal that can get done," he said. "But it cannot be done if every side wants 100 percent. And part of what voters were looking for is some compromise up here."
The latest offers exchanged by Obama and Boehner are roughly $450 billion apart, largely differing on where to draw the line for an income tax hike at the end of the year.
Obama wants to see rates rise on incomes above $400,000 a year; Boehner wants the threshold to be $1 million.
Both sides also disagree about the size of spending cuts and changes to entitlement programs.
Obama's plan would trim spending by $800 billion over a decade with half coming from Medicare and Medicaid. He has also agreed to limits on future cost-of-living increases for Social Security beneficiaries, something anathema to many Democrats.
Boehner wants $1 trillion or more in spending cuts, citing entitlement programs as the primary drivers of U.S. deficits and debt. "The real issue here is spending," Boehner said today. "I don't think the White House has gotten serious."
Merry 'Cliffmas'! Chances for a Deficit Deal Dim
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Merry 'Cliffmas'! Chances for a Deficit Deal Dim
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Merry 'Cliffmas'! Chances for a Deficit Deal Dim
