The potential deal also would avert a cut in Medicare payments to doctors through 2013.
Biden and McConnell discussed a possible two-month delay in the spending cuts, while Senate Democratic leaders had been pushing for at least a yearlong extension, according to a congressional aide close to the negotiations. A two-month pause in the automatic cuts would require $24 billion in additional savings that Republicans are demanding in exchange.
SAVINGS ELSEWHERE
Republicans insisted that the spending cuts be offset with savings elsewhere in the budget and that new revenue should be used to reduce the deficit.
Representative Mike Rogers, a Michigan Republican, said House Speaker John Boehner has been “hands off” in the Senate negotiations. He said if a deal includes averting automatic cuts, it would need to include spending cuts in exchange for those.
“When it comes here we’ll figure out what we can pass,” Rogers told reporters. “If we don’t have real spending cuts, I don’t think it could pass the House of Representatives.”
Boehner has previously said he would bring any budget legislation passed by the Senate to the House floor, though members may decide to amend it.
BUSH TAX CUTS
Tax cuts first enacted during George W. Bush’s presidency are scheduled to expire tonight. Obama and other Democrats have sought to extend the reductions for married couples’ income up to $250,000 a year while letting tax rates rise for income above that amount. Republicans oppose tax rate increases for any income level.
Allowing the fiscal changes to take effect would cause a recession in the first half of 2013, according to the Congressional Budget Office.
In the event the Senate can’t reach a compromise, Obama has asked Reid to ready a bare-bones bill for a vote today to extend expanded unemployment benefits and tax cuts on family income up to $250,000.
If Congress does nothing, taxes will rise in 2013 by an average of $3,446 for U.S. households, according to the nonpartisan Tax Policy Center in Washington.
Tax filing for as many as two-thirds of U.S. taxpayers could be delayed into at least late March. Defense spending would be cut, and the economy would probably enter a recession in the first half of 2013, according to the Congressional Budget Office.
Bloomberg
