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Senate negotiators remain short of a fiscal deal

 President Barack Obama pauses during a statement on the fiscal cliff negotiations with congressional leaders in the briefing room of the White House ...

Obama Fiscal Cliff

President Barack Obama pauses during a statement on the fiscal cliff negotiations with congressional leaders in the briefing room of the White House ...

Senate negotiators remained short of an agreement Sunday as a year-end deadline looms to prevent tax increases for nearly all Americans. President Barack Obama blamed Republicans for putting the shaky U.S. economy at risk.
Senate Republican leader Mitch McConnell said he has asked Vice President Joe Biden to become involved in a last-minute effort to reach an agreement. Senate Majority Leader Harry Reid acknowledged McConnell had made an offer last night but said "at this point we are unable to make a counter-offer."
The public exchange between the top negotiators on averting the so-called fiscal cliff injected a note of pessimism little more than 24 hours before taxes are set to go up.
Democrats said Republicans were seeking to slow future cost of living increases for Social Security recipients as part of a compromise to avoid the so-called fiscal cliff of impending tax hikes and across-the-board spending cuts. Republicans declined to confirm the assertion _ and one Republican official disputed it _ but noted that Obama said in a television interview broadcast earlier in the day he had advanced such a proposal in earlier talks with Republicans.
The fate of the negotiations remained in doubt, with both the House and Senate meeting during the day, two days before the beginning of a new year that would trigger across-the-board tax increases and spending cuts that leaders in both parties have said they want to avoid.
Democrats said the Republican proposal called for changing the formula for calculating Social Security benefits increases.
McConnell said there is no single issue blocking an agreement but that "the sticking point appears to be a willingness, an interest, or courage to close the deal."
The U.S. faces the so-called "fiscal cliff" in January because tax rate cuts dating back to President George W. Bush's tenure expire on Dec. 31. The pending across-the-board reductions in government spending, which will slice money out of everything from social programs to the military, were put in place last year as an incentive to both parties to find ways to cut spending. That solution grew out of the two parties' inability in 2011 to agree to a grand bargain that would have taken a big bite out of the deficit.
Unless Obama and Congress act to stop them, about $536 billion in tax increases, touching nearly all Americans, will begin to take effect in January. That will be coupled with about $110 billion in spending cuts, about 8 percent of the annual budgets for most federal departments. Economists predict that if allowed to unfold over 2013 this double whammy would result in a big jump in unemployment, financial market turmoil and a slide back into recession.
"We have been talking to the Republicans ever since the election was over," Obama said in an interview on NBC television's "Meet the Press" that aired Sunday. "They have had trouble saying yes to a number of repeated offers."
McConnell and Reid were hoping for a deal that would prevent higher taxes for most Americans while letting rates rise at higher income levels, although the precise point at which that would occur was a major sticking point.
Also at issue were the estate tax, taxes on investment income and dividends, extending benefits for the long-term unemployed, how to keep a minimum income tax payment designed for the rich from hitting about 28 million middle-class taxpayers, and a pending 27.5 percent cut in payment levels for doctors who treat Medicare patients. Medicare is the government program that provides health care coverage to the elderly.
Obama, in the NBC interview that was taped Saturday, said that while he had been "modestly optimistic" late last week, "we don't yet see an agreement."
As the Senate opened a rare Sunday session, Chaplain Barry Black offered a timely prayer for lawmakers.
"Lord show them the right thing to do and give them the courage to do it," Black said. "Look with favor on our nation and save us from self-inflicted wounds."
Obama pressed lawmakers to start where both sides say they agree _ sparing middle-class families from looming tax hikes.
"If we can get that done, that takes a big bite out of the fiscal cliff. It avoids the worst outcomes. And we're then going to have some tough negotiations in terms of how we continue to reduce the deficit, grow the economy, create jobs," Obama said in the NBC interview.
Gone, however, is the talk of a grand deal that would tackle broad spending and revenue demands and set the nation on a course to lower deficits. Obama and Republican House Speaker John Boehner were once a couple of hundred billion dollars apart on a deal that would have reduced the deficit by more than $2 trillion over ten years.
Republicans have complained that Obama has demanded too much in tax revenue and hasn't proposed sufficient cuts or savings in the nation's massive health care programs.
Obama upped the pressure on Republicans to negotiate a fiscal deal, arguing that Republican leaders have rejected his past attempts to strike a bigger and more comprehensive bargain.
"The offers that I've made to them have been so fair that a lot of Democrats get mad at me," Obama said.
Boehner disagreed, saying Sunday that the president had been unwilling to agree to anything "that would require him to stand up to his own party."
Don Stewart, a spokesman for McConnell, said Sunday: "While the president was taping those discordant remarks yesterday, Sen. McConnell was in the office working to bring Republicans and Democrats together on a solution."
The trimmed ambitions of today are a far cry from the upbeat bipartisan rhetoric of just six weeks ago, when the leadership of Congress went to the White House on Nov. 16 to set the stage for negotiations to come.
"I outlined a framework that deals with reforming our tax code and reforming our spending," Boehner said as the leaders gathered on the White House driveway on Nov. 16.
"We understand that it has to be about cuts, it has to be about revenue, it has to be about growth, it has to be about the future," House Democratic leader Nancy Pelosi said at the time. "I feel confident that a solution may be in sight."
South Carolina Republican Sen. Lindsey Graham is predicting that without at least 28 of the 47 Republican senators on board with any given proposal, Boehner wouldn't be able to get the votes to pass it in the Republican-controlled House of Representatives.
If McConnell "can't get 60 percent of us to vote for this deal, it will be hard for Boehner to get it through the House. And I want to vote for it even though I won't like it because the country's got a lot at stake here," Graham said on "Fox News Sunday".
Democratic Sen. Dianne Feinstein of California said the 2.1 million Americans whose extended unemployment benefits ran out on Saturday are already feeling the pain of Congress' inaction.
"From this point on, it's lose-lose. My big worry is a contraction of the economy, the loss of jobs, which could be well over 2 million in addition to the people already on unemployment. I think contraction of the economy would be just terrible for this nation. I think we need a deal, we should do a deal," Feinstein said on "Fox News Sunday."
But the deal was not meant to settle other outstanding issues, including more than $1 trillion in cuts over 10 years, divided equally between the Pentagon and other government spending. The deal also would not address an extension of the nation's borrowing limit, which the government is on track to reach any day but which the Treasury can put off through accounting measures for about two months.
That means Obama and the Congress are already on a new collision path. Republicans say they intend to use the debt ceiling as leverage to extract more spending cuts from the president. Obama has been adamant that unlike 2011, when the country came close to defaulting on its debts, he will not yield to those Republican demands.
Lawmakers have until the new Congress convenes to pass any compromise, and even the calendar mattered. Democrats said they had been told House Republicans might reject a deal until after Jan. 1, to avoid a vote to raise taxes before they had technically gone up, and then vote to cut taxes after they had risen.
Associated Press writers Andy Taylor, Alan Fram, David Espo, Alan Fram and Michele Salcedo contributed to this report.

Updated : 2021-06-20 22:16 GMT+08:00