US President, Barack Obama, and Senate leaders are on the verge of an
agreement that would let taxes rise on the wealthiest households
while protecting the vast majority of Americans from tax rises set to
hit next month.
development on Friday evening marked a breakthrough after weeks of
paralysis. After meeting Mr Obama at the White House, the Senate
majority leader, Harry Reid, a Democrat like the President, and its
minority leader, Mitch McConnell, a Republican, said they would work
through the weekend in the hope of drafting a fiscal cliff agreement
they could present to their colleagues on Sunday afternoon.
the Senate began haggling over critical details, the emerging deal
faced an uncertain fate in the House of Representatives, where the
Republican Speaker, John Boehner, failed a week ago to persuade his
adamantly anti-tax caucus to let taxes rise even for millionaires.
Friday, Mr Obama pronounced himself ''modestly optimistic'' at a
brief news conference at the White House. The ordinarily dour Senator
McConnell said he was ''hopeful and optimistic''. And Senator Reid
immediately began preparing Senate Democrats for what could be a
we come up with is going to be imperfect. Some people aren't going to
like it. Some people will like it less,'' Senator Reid said in the
Senate. But ''we're going to do the best we can for … the country
that's waiting for us to make a decision.''
said the developing package would protect nearly 30 million taxpayers
from paying the alternative minimum tax for the first time and keep
unemployment benefits flowing to 2 million people who would otherwise
be cut off next month.
the two sides were still at odds over a crucial issue: how to define
Mr Obama has proposed letting tax rates rise on income
over $US250,000 ($241,000) a year. Senate Republicans have in recent
days expressed interest in a compromise that would raise that
threshold to $US400,000 a year, an offer Mr Obama made to Mr Boehner
before the Speaker abruptly broke off negotiations last week.
was no agreement on how to handle roughly $US100 billion in automatic
spending cuts that are scheduled for the Pentagon and other
departments in the fiscal year that ends in September.
Obama and Senate leaders have concluded time is too short to work on
a package of significant cuts to federal health and retirement
programs, the top priority of many Republicans.
big changes to those programs, the deal will not include an agreement
to raise the limit on government borrowing, setting up another fierce
battle in the next two months.
Reid and McConnell pledged to work together to craft a package that
could win significant bipartisan support.
believe such a proposal could pass both houses with bipartisan
majorities as long as those leaders allow it to actually come to a
vote,'' Mr Obama said.
that failed, Mr Obama said, he had asked Senator Reid to press ahead
with a bill to keep the President's campaign promise to raise taxes
on income greater than $US250,000 and extend benefits for the