Dems, GOP try resolving tax and spending disputes with 'fiscal cliff' deadline hours away
6:32 AM, Dec 31, 2012
WASHINGTON (AP) -
The White House and Senate Republicans sorted through stubborn disputes over taxing the wealthy and cutting the budget to pay for Democratic spending proposals as Monday's midnight deadline for an accord avoiding the "fiscal cliff" drew to within hours.
Senate Minority Leader Mitch McConnell, R-Ky., spoke repeatedly Sunday to Vice President Joe Biden, a former Senate colleague, in hopes of settling remaining differences and clinching a breakthrough that has evaded the two sides since President Barack Obama's November re-election. In one indication of the eleventh-hour activity, aides said the president, Biden and top administration bargainer Rob Nabors were all working late at the White House, and McConnell was making late-night phone calls as well.
Unless an agreement is reached and approved by Congress by the start of New Year's Day, more than $500 billion in 2013 tax increases will begin to take effect and $109 billion will be carved from defense and domestic programs. Though the tax hikes and budget cuts would be felt gradually, economists warn that if allowed to fully take hold, their combined impact -- the so-called fiscal cliff -- would rekindle a recession.
"There is still significant distance between the two sides, but negotiations continue," Senate Majority Leader Harry Reid, D-Nev., said shortly before the Senate ended an unusual Sunday session. "There is still time to reach an agreement, and we intend to continue negotiations."
The House and Senate planned to meet Monday, a rarity for New Year's Eve, in hopes of having a tentative agreement to consider. Yet despite the flurry of activity, there was still no final pact.