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Obama: Agreement On Taxes Is ‘Within Sight’

Filed by KOSU News in US News.
December 31, 2012

President Obama told the nation this afternoon that an agreement to prevent most Americans’ taxes from rising at midnight is “within sight,” but not yet done. An hour or so later, the key Republican in talks about the so-called fiscal cliff — Sen. Minority Leader Mitch McConnell of Kentucky — agreed that “we are very, very close.”

There are multiple news reports that among the key provisions in the emerging deal are increases in income tax rates for families earning more than $450,000 a year and individuals who make more than $400,000. Other Americans’ income tax rates would remain unchanged.

In an update on the talks aimed at avoiding the cliff, the president also said that Democrats and Republicans are still not in agreement on spending cuts. But, he said, “it may be that we can do it in stages.”

As we’ve been reporting, there have been signs today of progress in the talks — which are now being led by Vice President Biden and McConnell. The so-called fiscal cliff is the midnight arrival of automatic tax increases, automatic spending cuts and the end of some unemployment benefits (all deadlines put in place by lawmakers back in 2011 during previous deficit-reduction and debt-ceiling negotiations).

We updated as the president spoke.

Update at 2:55 p.m. ET. McConnell Says “We Are Very, Very Close”:

Echoing many of the president’s comments, McConnell just said on the Senate floor that “we are very, very close” on taxes. “Let’s pass the tax relief portion now,” he added, and “take what’s been agreed to and keep moving.”

NPR’s Scott Horsley reports that according to “people familiar the negotiations,” the key components of the emerging deal on taxes are the extension of Bush-era tax cuts for individuals earning less than $400,000 a year and couples earning more than $450,000. Income above those levels would be taxed at a 39.6 percent rate.

Update at 1:55 p.m. ET. Can Accomplish Most Important Goal:

Toward the end of his comments, the president says the primary goal of the talks now is to “stop taxes going up for middle class families starting tomorrow.” That is, he says, “a modest goal we can accomplish.”

And he jokes that “if there’s even one second left before you have to do what you’re supposed to do,” members of Congress “will use that last second.”

Update at 1:52 p.m. ET. Another Hint About Solving This In Steps:

The president talks about the automatic spending cuts set to kick in at midnight and speaks in the future tense: “Any agreement we have to deal with automatic spending cuts … those also have to be balanced. … Revenues have to be part of the equation in turning off the ‘sequester.’ “

Update at 1:48 p.m. ET. Solution “In Stages”:

Hinting that there won’t be a deal that covers every aspect of the fiscal cliff, the president says “it may be we can do it in stages.”

Update at 1:46 p.m. ET. Agreement Is “Within Sight,” But Not Done:

“I do need to talk about the progress that’s being made in Congress today,” Obama says. An agreement is “within sight … but it’s not done.”

Update at 1:42 p.m. ET. Starting Shortly:

A group of people — likely to be described by the White House as Americans who would benefit from a deal to avoid going over the “cliff,” have gathered behind the podium from which the president will speak.

Update at 1:25 p.m. ET. Expect To Hear “Outlines” Of A Deal?

On the NPR broadcast, correspondent John Ydstie just said it’s now believed the president will announce the outlines of a deal. As correspondent Julie Rovner added, the plan will still need to be voted on in both the House and Senate and that might not happen until after midnight. But John noted that Congress could let provisions go into effect retroactively. That is, the federal government might technically go over the “fiscal cliff,” but be pulled back up later by legislation.

Here’s one of our earlier updates:

11:30 a.m. ET. Outlines Of A Deal On Taxes?

The Wall Street Journal says:

“On taxes, one of the thorniest issues on the table, the two sides appeared to be converging. President Barack Obama has called for raising individual income-tax rates on family income above $250,000. In the latest round of Senate talks, Republicans proposed a $550,000 threshold, which Democrats moved to $450,000, according to Sen. Dick Durbin (D., Ill.).”

While Politico reports that:

“McConnell and Biden, who served in the Senate together for 23 years, are closing in on an agreement that would hike tax rates for families who earn more than $450,000, and individuals who make more than $400,000, according to sources familiar with talks. That would mark significant concessions for both men, particularly for McConnell. President Barack Obama campaigned on raising taxes for families who make more than $250,000, but McConnell has long been dead-set against any tax increases, warning they would jeopardize the economy.”

As the Journal adds, though:

“Before noon on Monday, Senate Majority Leader Harry Reid (D., Nev.) said on the Senate floor that discussions continue, but he also warned ‘we really are running out of time,’ adding that ‘There are a number of issues on which the two sides are still apart.’ “

[Copyright 2012 National Public Radio]

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