McConnell and Reid Called in to Come up With Fiscal Cliff Deal
December 28, 2012
Senate leaders are working to craft legislation by Sunday that averts the year-end "fiscal cliff" of tax hikes and spending cuts, but many details needed to be worked out after a crucial meeting with President Barack Obama on Friday.
Senate Democratic leader Harry Reid and his Republican counterpart Mitch McConnell, termed the meeting "constructive" and "positive" and said they would keep working on trying to find a solution over the weekend.
However shortly afterwards Reid said he would be sending a bill to the Senate calling for an end to the Bush-era tax cuts for households earning more than $250,000, a figure that Republicans have repeatedly said they will not accept.
"At President Obama's request, I am readying a bill for a vote by Monday that will prevent a tax hike on middle-class families making up to $250,000, and that will include the additional, critical provisions outlined by President Obama," Reid said in a statement.
"In the next 24 hours, I look forward to hearing any good-faith proposals Senator McConnell has for altering this bill."
After adjourning on Friday, Reid he would probably not call the Senate back into session until about 1 p.m. on Sunday to give leaders time to hash out a deal.
On the Senate floor, McConnell said, "We are engaged in discussions, the majority leader and myself and the White House, in the hopes that we can come forward as early as Sunday and have a recommendation that I can make to my conference and the majority leader can make to his conference."
"So we'll be working hard to try to see if we can get there in the next 24 hours. So I'm hopeful and optimistic," he added.
An aide to House of Representatives Speaker John Boehner said it was agreed at the White House meeting that the Senate should act first.
"The speaker told the president that if the Senate amends the House-passed legislation and sends back a plan, the House will consider it — either by accepting or amending," the aide said.
However, Reid said it would be difficult to craft a solution that can win passage in both the House and Senate, adding that it involves "big numbers."
"Whatever we come up with is going to be imperfect," Reid said. "Some people aren't going to like it. Some people will like it less. But that's where we are and I feel confident that we have an obligation to do the best we can."
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Senate Approves $60.4 Billion Sandy Aid Bill
by AP News
December 29, 2012
WASHINGTON (AP) — The Senate on Friday approved a $60.4 billion emergency spending aid package for victims of Hurricane Sandy that had been backed by Senate Democrats.
Democrats had to turn back Republican efforts to cut programs such as $150 million in fisheries aid that Republican lawmakers said was unrelated to the storm that hammered the East Coast late in October. The measure cleared the Senate on a 62-32 vote, with 12 Republicans supporting the bill. Sen. Mark Pryor, D-Ark., was the only Democrat to vote against the bill, but he later switched his vote to support the measure.
The bill faces uncertain prospects in the House, where GOP leaders appear reluctant to move quickly on a big spending bill in the final days of a lame duck session. Congress' attention is focused on talks over the so-called fiscal cliff of tax hikes and automatic spending cuts.
Sandy was blamed for at least 120 deaths and battered coastline areas from North Carolina to Maine. New York, New Jersey and Connecticut were the hardest hit states and suffered high winds, flooding and storm surges. Sandy damaged or destroyed more than 72,000 homes and businesses in New Jersey. In New York, 305,000 housing units were damaged or destroyed and more than 265,000 businesses were affected.
Senate Republicans failed on an amendment for a smaller package of about $24 billion in aid for Sandy, which was the most costly natural disaster since Hurricane Katrina in 2005 and one of the worst storms ever in the Northeast.
House GOP leaders have not said how they plan to proceed. But House Appropriations Committee Chairman Hal Rogers of Kentucky has said Congress should probably begin with a smaller aid package for immediate recovery needs and wait until more data can be collected about storm damage before approving additional money next year.
Rep. Paul Ryan, the 2012 GOP vice presidential nominee and a leading House fiscal conservative, has criticized the Democratic bill as "packed with funding for unrelated items, such as commercial fisheries in American Samoa and roof repair of museums in Washington, D.C."
Sen. Charles Schumer, D-N.Y., urged House leaders to "put this bill on the floor quickly and allow a vote." If the House balks, Schumer said, the Senate bill provides "very good groundwork" for seeking Sandy aid next year.
The measure includes $11.5 billion for the Federal Emergency Management Agency's chief disaster relief fund and $17 billion for community development block grants, much of which would help homeowners repair or replace their homes. Another $11.7 billion would help repair New York City's subways and other mass transit damage and protect them from future storms. Some $9.7 billion would go toward the government's flood insurance program. The Army Corps of Engineers would receive $5.3 billion to mitigate flood future risks and rebuild damaged projects.
Senate Republicans said much of the spending in the Democratic bill was for projects unrelated to Sandy, such as $150 million for fisheries disasters that could go to Alaska as well as Gulf Coast and New England states. Sen. Tom Coburn, R-Okla., sought to strip the fisheries funding, but his amendment failed.
To court votes, Democrats last week broadened some of their bill's provisions to cover damage from Hurricane Isaac, which struck the Gulf Coast earlier this year. A provision was added to the $2.9 billion allotted to Army Corps of Engineers projects to reduce future flooding risks; the coverage area for that program will now include areas hit by Isaac in addition to Sandy. Democrats also shifted $400 million into a community development program for regions suffering disasters, beyond areas struck by Sandy.
A Coburn amendment to reduce the federal share of costs for the Army Corps of Engineer projects to reduce future flooding risks also failed.
Read more: http://goo.gl/dQevo
Washington spenders flunk basic math - Raising taxes won’t avoid ‘fiscal cliff’
by Rep. Darrell E. Issa
December 28, 2012
Politicians in Washington have spent the better part of the past two months advancing a myth that is undermining one of the most important public policy debates in recent memory. It’s a myth that is coming at the expense of solutions based on common sense that could return us to balance and fiscal stability.
Twenty-six years ago, President Reagan implemented significant tax reforms that lowered the individual income tax rate, limited deductions and brought equality to tax rates across all levels. Before that reform, there had been 15 different marginal tax rates reaching levels as high as 50 percent for top brackets. By the time Reagan left office, the number of brackets had been reduced to two: 15 percent and 28 percent.
In 1993, President Clinton raised the top two income rates to 36 percent and 39.6 percent while also raising the corporate tax rate, increasing the taxable portion of Social Security benefits and increasing income taxable for Medicare. This is what has become known as the “Clinton tax rates.”
In 2001, President George W. Bush changed the rate from 39.6 percent to 35 percent, lowered the capital gains and dividend income rates, and expanded credits and deductions such as the Child Tax Credit and the Earned Income Tax Credit.
So much time and energy is being spent advancing the myth that raising taxes is the best way to avoid falling off the so-called “fiscal cliff.”
If you raised taxes on the top income bracket, you would generate around $1 trillion over 10 years. The past four years under President Obama have resulted in trillion-dollar deficits each year. At this rate, in 10 years we’re looking at $10 trillion in new debt. At best, the “tax-the-rich” proposal is just a 10 percent solution.
Let’s take this tax-more, spend-more approach to the extreme. If you return everyone to the Clinton-era tax rates, you’re still left with a 10-year, $2.3 trillion deficit, and that’s assuming everything stays as it is right now, and Washington breaks its trend of spending more every year. (Even if we go over the fiscal cliff and return to Clinton-era tax rates, we’re still left with at least a $2.3 trillion deficit over the next 10 years.) The bottom line is this: Under no proposed scenario does raising taxes eliminate the deficit and return us to a balanced budget. The problem is government spending.
This fixation with tax increases is doing a huge disservice to the American people because it ignores the real crisis: government spending. By now, you know all too well that government spends more than it takes in. The federal government is spending more per household than ever before. Since 1965, spending per household has grown by 152 percent.
Conveniently omitted from the current fiscal-cliff discussions is the reality that for individuals earning more than $200,000 a year, their taxes already are going up in 2013, courtesy of Obamacare, which includes a new 1 percent tax on persons making more than $200,000 a year as well as an additional 3.8 percent tax on capital gains, investment income and certain home sales. These two new taxes will generate $317.7 billion over a 10-year period, or $31 billion a year — covering just a fraction of the current $1.1 trillion deficit for fiscal 2012 alone.
Do you know what some in Washington will say 10 years from now, when the problem hasn’t gone away? They’ll say, “We need to tax more.” Why isn’t the solution ever about spending less?
Some in Washington aren’t interested in the truth. They aren’t interested in facts. They aren’t interested in solving the problem. For them, that’s bad for business. It’s much easier for them to keep kicking the can down the road and using our fiscal decline to essentially “cry wolf” and raise your taxes. When will it ever stop?
I can guarantee you this: It won’t stop here, it won’t stop with just the “1 percent” or the “2 percent.” There will never be enough to satisfy this insatiable appetite to spend more.
That’s what’s really at stake right now.
The other side tries to boil this down into a seven-second sound bite about taxing the rich and people paying their fair share. In 2009, the top 10 percent of earners in the United States already paid more than 70 percent of federal income taxes.
This isn’t about fairness and unfairness. It’s about taxing and spending, and the federal government has spent enough.
Read more: http://goo.gl/Zi0b6