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With clock ticking, still no deal to avert 'fiscal cliff'

December 31, 2012|By Michael A. Memoli and Lisa Mascaro

WASHINGTON – Senate leaders remain shy of a deal to avert the automatic tax increases due to take effect at midnight on New Year’s Eve, despite conversations that continued overnight between Vice President Joe Biden and Senate Republican Leader Mitch McConnell (R-Ky.).

Majority Leader Harry Reid (D-Nev.) said on the Senate floor Monday morning that “there are a number of issues in which the two sides are still apart” but that negotiations “are continuing as I speak.”

“We really are running out of time,” he added, about 13 hours before the nation would go over the so-called “fiscal cliff.”

Biden and McConnell, after trading phone calls Sunday afternoon, spoke again at 12:45 a.m. and again at 6:30 a.m. Monday. Biden’s role in the negotiations emerged on Sunday as McConnell, his former colleague of two decades in the Senate, appealed for a “dance partner” in his effort to find a workable solution on tax rates.

QUIZ: How much do you know about the fiscal cliff?

Republicans have said they are willing to raise taxes on wealthier households while stopping the tax increases for most Americans. But one of the sticking points remains the threshold at which current tax rates would be maintained. On Sunday, Republicans suggested taxing income of more than $550,000 for couples, while Democrats set their latest offer at $450,000.

Despite Biden’s lead role, there’s no guarantee any solution would meet with Democratic’ support. Sen. Tom Harkin of Iowa said Monday that he was concerned about the reported details of the deal, indicating that he believed it was preferable to see all tax rates revert to Clinton-era levels.

“I ask, what’s so bad about that?” he said on the Senate floor, noting the economic boom of the 1990s at those tax rates. “As I see this thing developing … no deal is better than a bad deal. And this looks like a very bad deal.”

Sen. Barbara Boxer (D-Calif.), who has supported a higher tax threshold, was more cautious. “One party doesn’t control everything. So we are going to have to meet somewhere in the middle,” she said.

The House was set to hold unrelated votes Monday afternoon but would be ready to vote if the Senate acts. The House Rules Committee waived the Republicans’ 72-hour rule, allowing the chamber to vote on legislation introduced the same day.

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michael.memoli@latimes.com

Twitter: @mikememoli

lisa.mascaro@latimes.com

Twitter: @lisamascaroindc

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