Politico: ‘Major Progress’ Overnight on Fiscal Cliff Talks
December 31, 2012

Politico:
Senate Minority Leader Mitch McConnell (R-Ky.) and Vice President Joe Biden engaged in furious overnight negotiations to avert the fiscal cliff and made major progress toward a year-end tax deal, giving sudden hope to high-stakes talks that had been on the brink of collapse, according to sources familiar with the discussion.
McConnell and Biden, who served in the Senate together for 23 years, only started talking Sunday, after negotiations between Senate Majority Leader Harry Reid (D-Nev.) and McConnell sputtered.
Sources close to the talks said a deal is now more likely to come together but cautioned that obstacles remain, including how Speaker John Boehner and House Republican leaders react to any tentative agreement.
“The Leader and the VP continued their discussion late into the evening and will continue to work toward a solution. More info as it becomes available,” a McConnell spokesman said.
It comes as Washington awakens on a chilly New Year’s eve to a daunting reality: If lawmakers and the White House are not able to broker a last-minute deal on the fiscal cliff, the country will actually go over it.
Going over the cliff is not how Americans want to start 2013: with hefty new tax hikes and spending cuts that could send the stock market plummeting, slash defense spending and interrupt an economic recovery that was just beginning to spark.
But after a weekend in which senators haggled over one obstacle to agreement after another, going over the cliff looked like real possibility, if not a probability. The McConnell-Biden talks look like they could avert this potential disaster.
If there’s an agreement, it will come out of the Senate. Speaker John Boehner has said the House will take up whatever bill the Senate passes and either pass it, or amend it and send it back to the upper chamber.
The main hurdle remained over which income groups would be hit with tax hikes in the new year.
Democrats had proposed raising taxes on individuals who make more than $360,000 annually and families whose income is more than $450,000. And McConnell had countered with a tax hike for individuals above $450,000 and couples who earn more than $550,000 earlier in the evening Sunday.
But Democratic sources close to the talks said McConnell would have to go significantly lower to win support from their party, although that would make it more difficult for the GOP leader to win over fellow Republicans. Estate taxes, a chief concern for McConnell, remained a sticking point as well.
Read more: http://www.politico.com/story/2012/12/fiscal-cliff-hanger-as-deal-in-limbo-85599.html#ixzz2GdSBWv4E

Boehner Offers GOP Budget Deal to Avoid Fiscal Cliff
December 16, 2012

Politico:
Speaker John Boehner has proposed allowing tax rates to rise for the wealthiest Americans if President Barack Obama agrees to major entitlement cuts, according to several sources close to the talks.

It is the first time Boehner has offered any boost in marginal tax rates for any income group, and it would represent a major concession for the Ohio Republican. Boehner suggested hiking the Bush-era tax rates for top wage earners, including those with annual incomes of $1 million or more annually, beginning Jan. 1, two sources said.

Obama and Boehner spoke by phone Friday after a lengthy face-to-face session at the White House on Thursday. The quickening pace of private conversations between the two key players in the fiscal-cliff talks shows progress is being made in the negotiations, although they are not close to a deal yet, sources said.

Boehner also wants to use a new method of calculating benefits for entitlement programs known as “chained CPI,” which would slow the growth of Medicare and other federal health programs and save hundreds of billions over the next decade.

The speaker’s offer would not include extending federal unemployment benefits, and it is unclear how it would address sequestration — the tens of billions in spending cuts scheduled to go into effect for the Pentagon and other federal agencies starting Jan. 2.

And Republicans remain unyielding on agreeing to raise the U.S. debt limit as part of any agreement to avoid the fiscal cliff.

Boehner’s offer on tax rates was a significant move toward Obama’s position. But the proposal, as a whole, still isn’t acceptable to Democrats because of the level of revenue, the changes to entitlement programs that would hit beneficiaries and the absence of an extension for unemployment insurance benefits, according to a source familiar with the talks. The president has also been adamant that any deal include an increase in the debt ceiling.

Boehner’s office would not comment on the current state of the talks with Obama beyond saying no deal has been reached at this time, nor is one expected soon.

“The lines of communication remain open, but there is no agreement, nor is one imminent,” said Michael Steel, Boehner’s spokesman.