Rates, Estate Tax Are Sticking Points in Possible Deal
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Lori Montgomery Wp
And Lori Montgomery, The Washington Post
The Washington Post
December 30, 2012

Senate negotiators labored late into Saturday over a last-ditch plan to avert the “fiscal cliff,” struggling to resolve key differences over how many wealthy households should face higher income taxes in the new year and how to tax inherited estates.

As the clock ticked toward a Jan. 1 deadline, the halls of the Capitol were dark and silent. The House and the Senate are shuttered until Sunday afternoon, in part to avoid distractions as the talks over averting sharp tax increases for most American taxpayers entered their final hours.

While Senate Majority Leader Harry M. Reid (D-Nev.) monitored developments by telephone, Minority Leader Mitch McConnell (R-Ky.) arrived at the Capitol shortly after noon. Asked whether he and Reid would be able to strike a deal, McConnell smiled and replied: “I hope so.”

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As nightfall approached, top Democratic and Republican aides continued shuttling paperwork with the latest proposals back and forth between the two leaders’ offices, less than 50 steps apart. Under negotiation is a deal that would extend George W. Bush-era tax cuts for nearly all taxpayers but increase rates on top earners. It also would extend unemployment benefits set to expire in January for 2 million people and prevent about 30 million Americans from having to pay the alternative minimum tax for the first time.

McConnell left the Capitol shortly before 7 p.m, revealing few details. “We’ve been in discussions all day, and they continue,” he said. He added, “We’ve been trading paper all day and talks continue into the evening.”

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Reid and McConnell have set a deadline of about 3 p.m. on Sunday for cinching a deal. That’s when they’re planning to convene caucus meetings of their respective members in separate rooms just off the Senate floor. At that point, the leaders will brief their rank and file on whether there has been significant progress and will determine whether there is enough support to press ahead with a proposal.

“They both know the clock ends Sunday,” said Sen. Mark Begich (D-Alaska). If all goes according to plan, the leaders would roll out the legislation Sunday night and hold a vote by at least midday Monday, giving the House the rest of New Year’s Eve to consider the measure.

In the House, Speaker John A. Boehner (R-Ohio) huddled Saturday with his senior staff for two hours but remained on the periphery of the negotiations. Passage in the unpredictable chamber is anything but certain. Boehner told President Obama and congressional leaders Friday that he could commit only to considering a Senate-passed bill and suggested that the House may amend that bill and send it back to the Senate.

House consideration of the measure could become another white-knuckle moment. Boehner would like the eventual deal to be passed by a bipartisan coalition that is roughly equally divided between Republicans and Democrats, GOP aides said. Republicans have not supported tax increases since 1990, and conservative activists were already criticizing any deal to raise taxes on the wealthy.

“There is no agreement worthy of the American people to be found in the current Washington charade. Better if everyone went home immediately,” former House speaker Newt Gingrich (R-Ga.) said Saturday in a statement.

Obama said Saturday that he believed Congress could still head off the automatic tax increases set to kick in on Jan. 1 if lawmakers acted fast. “Leaders in Congress are working on a way to prevent this tax hike on the middle class, and I believe we may be able to reach an agreement that can pass both houses in time,” the president said in his weekly radio address.

Obama, meanwhile, taped an interview that will air Sunday on “Meet the Press” aimed at keeping pressure on Congress to act. His appearance on the NBC News show is his just his second as president. The first came in 2009 at the height of the debate over Obama’s initiative to expand health coverage for the uninsured. The fiscal-cliff measure under construction in the Senate, by contrast, is more modest, designed to fix none of the nation’s biggest problems