WASHINGTON — Senate leaders struck an agreement Monday night on legislation to stave off the fiscal cliff’s automatic income tax increases and briefly delay deep spending cuts, launching an urgent drive to spare the US economy from a possibly recession-inducing blow.
With a New Year’s deadline fast approaching, Senate Democrats and Republicans were preparing to vote after four days of stop-and-start negotiations to avoid tax hikes on virtually all working Americans.
Technically, lawmakers were certain to miss the deadline and go over the fiscal cliff Monday at midnight. But a positive Senate vote would pave the way for the House to quickly follow — perhaps as early as New Year’s Day — giving Congress at least a shot at reversing the tax increases before they have any practical impact on taxpayers.
As Vice President Joe Biden briefed Democratic senators on terms of the deal, staffers scrambled Monday night to draft the details into a bill. If the measure passes the Senate, as many think it will, representatives in the House will be under intense pressure to also approve it.
Under terms of the agreement, decade-old income tax cuts would continue for single taxpayers who earn less than $400,000 a year and $450,000 for couples and Democrats would get a delay of two months in $110 billion in spending cuts; work continued Monday night to satisfy a Republican demand that the delay be offset with about $24 billion in cuts from somewhere else in the budget. Lawmakers also were working on a new set of rules for estate taxes, to avoid a scheduled increase.
“I think it’s very close, and we’re likely to reach an agreement,’’ said Senator Kelly Ayotte, the New Hampshire Republican.
There was no celebrating as grim-faced Republicans exited a closed-door meeting where they were briefed on the terms. The looming deal represented a watershed moment for the GOP, as senators essentially caved in to demands by President Obama and the Democrats that income tax rates must be increased on the rich.
The deal placed Massachusetts Senator Scott Brown in the awkward position of deciding whether to vote to effectively increase taxes on the wealthy, something that he vowed not to do during his failed reelection campaign this year. However he chooses to vote, it will probably be his last significant act as a senator before he is replaced by Democrat Elizabeth Warren on Wednesday. Brown declined to comment when approached by a Globe reporter after he met with his fellow Republicans.
``All set. All set,’’ said Brown as he walked with an aide down a Capitol corridor.
Biden, after being called into the negotiations by Senate minority leader Mitch McConnell on Sunday, remained the point person for Democrats on Monday as they raced the clock to cut a deal.
The agreement would allow income tax rates to rise from 35 percent to 39.6 percent for single taxpayers who earn more than $400,000 and couples earning over $450,000. Bush-era tax cuts for everyone below those thresholds would remain in place.
Many Republicans wanted the $110 billion in “automatic sequester’’ budget cuts to take effect as scheduled on Wednesday, to make up for additional revenues from the tax increases on the wealthy. Those cuts were agreed to in August 2011 as part of the deal to raise the nation’s debt limit. Democrats sought to delay the automatic spending cuts, saying they should be negotiated later.
Obama laid out his opposition to the spending cuts with a staged event near the White House, at the Eisenhower Executive Office Building, where he appeared with a group of supporters and took a few jabs at Congress, even as the sensitive negotiations continued.
“There are some programs that are going to be cut that we are using an ax, instead of a scalpel,’’ said Obama. “That is a piece of business that has to be taken care of.’’
He said Congress had been unable to negotiate a broader, more complex deal, and that it was important that a bad deal that relies upon excessive spending cuts not be “shoved’’ upon the American people.
“If they think that is how we are going to solve this thing, they have got another thing coming,’’ he said. “That is not how it’s going to work.’’
Obama’s 2008 GOP presidential rival, Senator John McCain of Arizona, strongly criticized Obama for making those remarks at a sensitive time, suggesting it appeared less than presidential to pursue a partisan line of attack as senators were negotiating on the eve of the fiscal cliff.
”The American people have to wonder if the president really wants this issue to be resolved,’’ said McCain, “or is it in his short-term benefit for us to go over the cliff?’’Continued...
© Copyright 2013 Globe Newspaper Company.
With a New Year’s deadline fast approaching, Senate Democrats and Republicans were preparing to vote after four days of stop-and-start negotiations to avoid tax hikes on virtually all working Americans.
Technically, lawmakers were certain to miss the deadline and go over the fiscal cliff Monday at midnight. But a positive Senate vote would pave the way for the House to quickly follow — perhaps as early as New Year’s Day — giving Congress at least a shot at reversing the tax increases before they have any practical impact on taxpayers.
As Vice President Joe Biden briefed Democratic senators on terms of the deal, staffers scrambled Monday night to draft the details into a bill. If the measure passes the Senate, as many think it will, representatives in the House will be under intense pressure to also approve it.
Under terms of the agreement, decade-old income tax cuts would continue for single taxpayers who earn less than $400,000 a year and $450,000 for couples and Democrats would get a delay of two months in $110 billion in spending cuts; work continued Monday night to satisfy a Republican demand that the delay be offset with about $24 billion in cuts from somewhere else in the budget. Lawmakers also were working on a new set of rules for estate taxes, to avoid a scheduled increase.
“I think it’s very close, and we’re likely to reach an agreement,’’ said Senator Kelly Ayotte, the New Hampshire Republican.
There was no celebrating as grim-faced Republicans exited a closed-door meeting where they were briefed on the terms. The looming deal represented a watershed moment for the GOP, as senators essentially caved in to demands by President Obama and the Democrats that income tax rates must be increased on the rich.
The deal placed Massachusetts Senator Scott Brown in the awkward position of deciding whether to vote to effectively increase taxes on the wealthy, something that he vowed not to do during his failed reelection campaign this year. However he chooses to vote, it will probably be his last significant act as a senator before he is replaced by Democrat Elizabeth Warren on Wednesday. Brown declined to comment when approached by a Globe reporter after he met with his fellow Republicans.
``All set. All set,’’ said Brown as he walked with an aide down a Capitol corridor.
Biden, after being called into the negotiations by Senate minority leader Mitch McConnell on Sunday, remained the point person for Democrats on Monday as they raced the clock to cut a deal.
The agreement would allow income tax rates to rise from 35 percent to 39.6 percent for single taxpayers who earn more than $400,000 and couples earning over $450,000. Bush-era tax cuts for everyone below those thresholds would remain in place.
Many Republicans wanted the $110 billion in “automatic sequester’’ budget cuts to take effect as scheduled on Wednesday, to make up for additional revenues from the tax increases on the wealthy. Those cuts were agreed to in August 2011 as part of the deal to raise the nation’s debt limit. Democrats sought to delay the automatic spending cuts, saying they should be negotiated later.
Obama laid out his opposition to the spending cuts with a staged event near the White House, at the Eisenhower Executive Office Building, where he appeared with a group of supporters and took a few jabs at Congress, even as the sensitive negotiations continued.
“There are some programs that are going to be cut that we are using an ax, instead of a scalpel,’’ said Obama. “That is a piece of business that has to be taken care of.’’
He said Congress had been unable to negotiate a broader, more complex deal, and that it was important that a bad deal that relies upon excessive spending cuts not be “shoved’’ upon the American people.
“If they think that is how we are going to solve this thing, they have got another thing coming,’’ he said. “That is not how it’s going to work.’’
Obama’s 2008 GOP presidential rival, Senator John McCain of Arizona, strongly criticized Obama for making those remarks at a sensitive time, suggesting it appeared less than presidential to pursue a partisan line of attack as senators were negotiating on the eve of the fiscal cliff.
”The American people have to wonder if the president really wants this issue to be resolved,’’ said McCain, “or is it in his short-term benefit for us to go over the cliff?’’Continued...
© Copyright 2013 Globe Newspaper Company.