This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at http://www.nytimes.com/2012/12/31/us/politics/obama-accuses-republicans-of-blocking-tax-deal.html

The article has changed 15 times. There is an RSS feed of changes available.

Version 5 Version 6
Obama Accuses Republicans of Blocking Tax Compromise Talks on Fiscal Crisis Face Setback That Threatens Deal
(35 minutes later)
WASHINGTON — President Obama on Sunday implored Congress to act in the next 48 hours to avert the sharp tax increases and benefit cuts scheduled to take effect beginning on Tuesday, but there were no indications that negotiations on Capitol Hill were making progress. WASHINGTON — Negotiations to reach a last-ditch agreement to head off large tax increases and sweeping spending cuts in the new year broke down, at least temporarily, on Sunday after Republicans requesteded that a deal include a new way of calculating inflation that would lower payments to beneficiaries programs like Social Security and slow their growth.
In an appearance on the NBC News program “Meet the Press,” Mr. Obama accused Republicans of blocking action on measures to prevent taxes from rising for most Americans, threatening the still-fragile economic recovery. A Senate Democratic aide familiar with the talks cautioned that they could restart. And Republican officials hinted that the Republican position is not set in stone. But for now, the Democratic aide said, talks have stopped.
Senator Mitch McConnell, the Republican leader, went to the Senate floor a little after 2 p.m. to say that Republicans had made their last offer at 7:10 the night before and had yet to receive a reply.
“I’m concerned about the lack of urgency. I think we all know we’re running out of time,” Mr. McConnell said.
To that, Senator Harry Reid, the leader of the Democratic majority, declared, “At this stage, we’re not able to make a counter offer.” He said that Mr. McConnell had negotiated in good faith but that “we’re apart on some pretty big issues.”
Mr. McConnell said that he had made an emergency call to Vice President Joseph R. Biden Jr. to get the talks started again.
Talks foundered for much of the day after Republicans dug in for the largest deficit reduction deal they could get in the time remaining, numerous Republican and Democratic officials familiar with negotiations said. Republicans told Democrats that they are willing to put off scheduled cuts in payments to health care providers treating Medicare patients but that they want to pay for it with spending cuts elsewhere.
But it was the inflation calculation that sent Democrats away from the negotiations. President Obama has said that in a “grand bargain” on deficit reduction, he would go along with the change, which would slow the growth of programs whose outlays rise with consumer prices, and would raise more revenue by pushing people into higher tax brackets.
But Democrats said that Mr. Obama and congressional Democrats would accept that change, called “chained CPI,” only as part of a larger deal that included locking in well more than $1 trillion in revenue over 10 years, along with other Republican concessions. Democrats fear that any such concessions now would only increase demands for addition concessions in the coming weeks when talks resume on a “grand bargain” to reduce the deficit.
They point to the $1 trillion in spending cuts agreed to last year in the Budget Control Act. Democrats say those should be included in a $4 trillion “grand bargain” package, but Republicans say those cuts are enacted and should not be part of future negotiations. Republicans would likely do the same if Democrats agree now to concessions on the inflation calculation, Democratic aides said Sunday.
The breakdown came after Mr. Obama appeared on the NBC program “Meet the Press” on Sunday implored Congress to act.
“We have been talking to the Republicans ever since the election was over,” Mr. Obama said in the interview, which was taped on Saturday. “They have had trouble saying yes to a number of repeated offers. Yesterday I had another meeting with the leadership, and I suggested to them if they can’t do a comprehensive package of smart deficit reductions, let’s at minimum make sure that people’s taxes don’t go up and that two million people don’t lose their unemployment insurance.”“We have been talking to the Republicans ever since the election was over,” Mr. Obama said in the interview, which was taped on Saturday. “They have had trouble saying yes to a number of repeated offers. Yesterday I had another meeting with the leadership, and I suggested to them if they can’t do a comprehensive package of smart deficit reductions, let’s at minimum make sure that people’s taxes don’t go up and that two million people don’t lose their unemployment insurance.”
“And I was modestly optimistic yesterday, but we don’t yet see an agreement,” Mr. Obama said. “And now the pressure’s on Congress to produce.”“And I was modestly optimistic yesterday, but we don’t yet see an agreement,” Mr. Obama said. “And now the pressure’s on Congress to produce.”
Unless Congress acts by midnight Monday, a broad set of tax increases and federal spending cuts will be automatically imposed on Jan. 1, affecting virtually every taxpayer and government program. The spending cuts were put in place earlier this year as draconian incentives that would force the president and lawmakers to confront the nation’s growing debt. Now, lawmakers are trying to keep them from happening, though it seemed likely that the cuts, known as sequestration, would be left for the next Congress, to be sworn in this week.Unless Congress acts by midnight Monday, a broad set of tax increases and federal spending cuts will be automatically imposed on Jan. 1, affecting virtually every taxpayer and government program. The spending cuts were put in place earlier this year as draconian incentives that would force the president and lawmakers to confront the nation’s growing debt. Now, lawmakers are trying to keep them from happening, though it seemed likely that the cuts, known as sequestration, would be left for the next Congress, to be sworn in this week.
Talks were not going well, according to two officials with knowledge of the negotiations. Republicans were pushing for the largest deficit reduction deal they could get in the time remaining, the two officials said. They have told Democrats that they are willing to put off scheduled cuts to health care providers treating Medicare patients but that they want to pay for it with spending cuts elsewhere.
They also want to include Mr. Obama’s offer to change the way inflation is calculated to slow the growth of benefit programs like Social Security and to raise more revenue.
Democrats have balked at both, the officials said, fearing that any such concessions would only increase demands for addition concessions in the coming weeks when talks resume on a “grand bargain” to reduce the deficit.
Both sides worry that the confrontational tone that the president took on “Meet the Press” was not helpful.Both sides worry that the confrontational tone that the president took on “Meet the Press” was not helpful.
Don Stewart, a spokesman for Senator Mitch McConnell, the Senator minority leader, issued a statement criticizing Mr. Obama’s remarks. “While the president was taping those discordant remarks yesterday,” Mr. Stewart said, “Senator McConnell was in the office working to bring Republicans and Democrats together on a solution. Discussions continue today.” Don Stewart, a spokesman for Mr. McConnell, issued a statement criticizing Mr. Obama’s remarks. “While the president was taping those discordant remarks yesterday,” Mr. Stewart said, “Senator McConnell was in the office working to bring Republicans and Democrats together on a solution. Discussions continue today.”
House Speaker John A. Boehner of Ohio, in his comments, pointed to the president as the problem. Republicans have tried to reach an agreement, Mr. Boehner said, but “the president has continued to insist on a package skewed dramatically in favor of higher taxes that would destroy jobs.”House Speaker John A. Boehner of Ohio, in his comments, pointed to the president as the problem. Republicans have tried to reach an agreement, Mr. Boehner said, but “the president has continued to insist on a package skewed dramatically in favor of higher taxes that would destroy jobs.”
Republicans have blamed Mr. Obama for seeking to punish the wealthy with large tax increases and have accused him of not negotiating in good faith. They say his approach would worsen the deficit by protecting Democratic constituency groups from tax increases and benefit reductions while imposing sharp penalties on farmers and small business owners.Republicans have blamed Mr. Obama for seeking to punish the wealthy with large tax increases and have accused him of not negotiating in good faith. They say his approach would worsen the deficit by protecting Democratic constituency groups from tax increases and benefit reductions while imposing sharp penalties on farmers and small business owners.
Senator John Barrasso of Wyoming, a member of the Republican leadership, said Sunday on the CNN program “State of the Union” that Mr. Obama was not dealing with the real issue imperiling the economy — the Democrats’ “addiction to spending.”Senator John Barrasso of Wyoming, a member of the Republican leadership, said Sunday on the CNN program “State of the Union” that Mr. Obama was not dealing with the real issue imperiling the economy — the Democrats’ “addiction to spending.”
The president and party leaders in the House and Senate have been seeking a compromise measure that would protect middle-income families from the worst of the tax increases, but there has been no agreement on where to draw the line. With the Bush-era tax cuts expiring, Mr. Obama and Democrats have said they want tax rates to rise on incomes over $250,000 a year; Republicans want a higher threshold, at perhaps $400,000.The president and party leaders in the House and Senate have been seeking a compromise measure that would protect middle-income families from the worst of the tax increases, but there has been no agreement on where to draw the line. With the Bush-era tax cuts expiring, Mr. Obama and Democrats have said they want tax rates to rise on incomes over $250,000 a year; Republicans want a higher threshold, at perhaps $400,000.
As part of the last-minute negotiations, the lawmakers have haggled over unemployment benefits, cuts in Medicare payments to doctors, taxes on large inheritances and limits on the impact of the alternative minimum tax, a parallel income tax system that is intended to ensure that the rich pay a fair share but that is increasingly encroaching on the middle class.As part of the last-minute negotiations, the lawmakers have haggled over unemployment benefits, cuts in Medicare payments to doctors, taxes on large inheritances and limits on the impact of the alternative minimum tax, a parallel income tax system that is intended to ensure that the rich pay a fair share but that is increasingly encroaching on the middle class.
Mr. Obama has said that if talks between the Senate leaders break down, he wants the Senate to schedule an up-or-down vote on a narrower measure that would extend only the middle-class tax breaks and unemployment benefits. The Senate majority leader, Harry Reid of Nevada, said he would schedule such a vote on Monday absent a deal. Mr. Obama has said that if talks between the Senate leaders break down, he wants the Senate to schedule an up-or-down vote on a narrower measure that would extend only the middle-class tax breaks and unemployment benefits. Mr. Reid said he would schedule such a vote on Monday absent a deal.
In his comments, Mr. Obama singled out the top Republican leaders — Senator McConnell and Speaker Boehner — for threatening to derail any deal in order to protect the wealthiest Americans.In his comments, Mr. Obama singled out the top Republican leaders — Senator McConnell and Speaker Boehner — for threatening to derail any deal in order to protect the wealthiest Americans.
Under questioning from David Gregory, the host of “Meet the Press,” Mr. Obama would not accept any responsibility for the impasse. He blamed Republican intransigence and political “dysfunction” in Washington, and said he had offered multiple reasonable compromises.Under questioning from David Gregory, the host of “Meet the Press,” Mr. Obama would not accept any responsibility for the impasse. He blamed Republican intransigence and political “dysfunction” in Washington, and said he had offered multiple reasonable compromises.
“What is it about you, Mr. President,” Mr. Gregory asked, “that you think is so hard to say yes to?”“What is it about you, Mr. President,” Mr. Gregory asked, “that you think is so hard to say yes to?”
“That’s something you’re probably going to have to ask them,” the president responded, “because, David, you follow this stuff pretty carefully. The offers that I’ve made to them have been so fair that a lot of Democrats get mad at me.”“That’s something you’re probably going to have to ask them,” the president responded, “because, David, you follow this stuff pretty carefully. The offers that I’ve made to them have been so fair that a lot of Democrats get mad at me.”
Mr. Obama said the priority for Republicans seemed to be “making sure that tax breaks for the wealthiest Americans are protected.”Mr. Obama said the priority for Republicans seemed to be “making sure that tax breaks for the wealthiest Americans are protected.”
At some point, he said, “I think what’s going to be important is that they listen to the American people.”At some point, he said, “I think what’s going to be important is that they listen to the American people.”
Another issue dividing Democrats and Republicans is the tax on inherited estates, which currently hits inheritances over $5 million at 35 percent. On Jan. 1, it is scheduled to rise to 55 percent, beginning with inheritances exceeding $1 million.Another issue dividing Democrats and Republicans is the tax on inherited estates, which currently hits inheritances over $5 million at 35 percent. On Jan. 1, it is scheduled to rise to 55 percent, beginning with inheritances exceeding $1 million.
The political drama in Washington over the weekend was given greater urgency by the fear that the economic gains of the past two years could be lost if no deal was reached. ”
Some of the consequences of Congressional inaction would be felt almost at once on Tuesday, in employee paychecks, at doctors’ offices and in the financial markets. Analysts said the effect would be cumulative, building over time.
An early barometer would probably be the effect on financial markets, where skittish investors, as they have during previous Congressional cliffhangers, could send the stock market lower on fears of another prolonged period of economic distress.
Failure to reach a broader deal on taxes and spending would increase taxes further, returning rates to Clinton-era levels. January paychecks would shrink as employers start withholding more for taxes.
Many families would also suffer if Congress failed to extend emergency jobless benefits, meaning that 2.1 million Americans would abruptly stop receiving expected payments.
And come mid-January, some Medicare patients might struggle to find doctors to treat them. Without Congressional action, doctors would face two cuts to reimbursement rates: a 26.5 percent reduction in Medicare payment rates from a 1997 law, and a further 2 percent cut adopted to reduce the deficit last year.
By late February or early March, lawmakers would face another economic showdown over raising the nation’s borrowing limit again to avoid a cash-management crisis and a government shutdown. Republicans have already said they intend to use Congressional authority to increase the so-called debt ceiling to extract cuts from entitlement programs — a threat that Mr. Obama has said he will resist.
Around the same time, the government and its workers would begin feeling the cuts to defense and domestic spending.
Without a compromise, the Pentagon and its civilian contractors would face steep reductions in virtually every program. Military officials said those spending reductions — $500 billion over 10 years — would eventually force projects to shrink or be canceled and lead to large-scale layoffs of military and civilian personnel.
Hundreds of other federal programs would see cuts beginning in late January. These include reductions of about 8 percent in the Special Supplemental Nutrition Program for Women, Infants and Children; the Low-Income Home Energy Assistance Program; and rental housing assistance.”

Jonathan Weisman contributed reporting.