Legislators express optimism on fiscal cliff while sticking points remain
(CNN) — With the so-called fiscal cliff looming, legislators continued on Sunday, November 18th to express optimism that a deal would be reached — but members of the two parties remained entrenched on one of the major sticking points, tax revenue.
Asked if she could “accept a deal that does not include tax rate increases for the wealthy,” House Minority Leader Nancy Pelosi responded, “No.”
Rep. Tom Price, who is chairman of the House Republican Policy Committee, was similarly firm.
“We’re still at the place where everything gets hung up: no increases in tax rates. That is still the position of House Republicans, correct?” CNN chief political correspondent Candy Crowley asked on “State of the Union.”
“We would be happy to look at that if it solved the problem. The problem is, it doesn’t solve the problem,” Price replied.
Still, Sen. Dick Durbin, the Democratic whip, said he hears signs the political debate has advanced from the winter of 2010, when the Simpson-Bowles Commission proposed a deficit reduction plan. President Barack Obama had created the commission, but did not send its recommendations to Congress, which instead created the so-called supercommittee — which proved unsuccessful — and the deficit reduction measures in the fiscal cliff to break their impasse.
“What I hear is a perceptible change in rhetoric from the other side, and what it is is an invitation for our side to basically sit down and say, what can we do for this country?” Durbin said on CNN.
“Push the special interest groups to the side for the moment, and what I hear the president saying is, we’re not going to solve this by asking the wealthiest to pay their fair share, but it will be part of the solution,” he continued. “And what I hear from the Republican side is, well, what is the rest of the solution? That is the beginning of a negotiation.”
The fiscal cliff is a combination of the spending cuts passed by Congress — known as sequestration — and expiration of the Bush-era tax cuts, all set to take effect at the beginning of the new year, absent congressional action. Economists have said the fiscal cliff would put the U.S. economy into recession.
The two parties have been stuck over federal spending on entitlements and the tax breaks. Democrats generally favor extending the Bush-era tax rates for income under a certain threshold — such as $250,000 — and letting the rates rise on income above that level. Republicans generally favor extending the rates on all levels of income while reducing loopholes and capping deductions for top earners.
But Democrats say there is not enough money for deficit reduction without the tax increases on the wealthy.
“The president made it very clear in his campaign that there is not enough — there are not enough resources,” Pelosi said on ABC. “You have to cut some investments. If you cut too many, you’re hampering growth, you’re hampering education, our investments for the future. So just to close loopholes is far too little money.”
Price said on CNN that tax increases would not be effective.
“Tax increases to chase ever higher spending is a fool’s errand,” he said. “What we need to do is have that balanced approach that we’ve all been talking about, which, again, is increasing revenues through a process of tax reform, and then spending reductions.”
While some have suggested a deal could be reached in the new year, the legislators speaking on Sunday agreed there is urgency to avert the cliff before January.
“Kicking the can further down the road, which is one of the things that we hear out of Washington all the time, will no longer be acceptable to either the American people or to the challenges that we have to get this economy rolling again and get jobs created,” Price said, calling it a crisis.
Gov. Bobby Jindal of Louisiana, a Republican who previously served two terms in the U.S. House, said on Fox that “if they just put a Band-Aid on this, we’ll be in another fiscal cliff in a few months.”
Pelosi said that Congress should be able to reach a deal because “we’re all grown-ups.”
“We have a responsibility to the American people. The elements for an agreement are there. Time is of the essence,” she said. “The quicker we do it, the more confidence we instill, the better it is for the economy and for the American people.”