The Free Press, Mankato, MN

State, national news

November 27, 2012

A big disconnect as 'fiscal cliff' clock ticks

WASHINGTON — Republicans' newfound willingness to consider tax increases to avert the "fiscal cliff" comes with a significant caveat: larger cuts than Democrats seem willing to consider to benefit programs like Medicare, Medicaid and the president's health care overhaul.

The disconnect on benefit programs, coupled with an impasse between Republicans and the White House over raising tax rates on upper-bracket earners, paints a bleak picture as the clock ticks toward a year-end fiscal debacle of automatic spending increases and harsh cuts to the Pentagon and domestic programs.

Democrats emboldened by the election are moving in the opposite direction from the GOP on curbing spending, refusing to look at cuts that were on the bargaining table just last year. Those include any changes to Social Security, even though President Barack Obama was willing back then to consider cuts in future benefits through lower cost-of-living increases. Obama also considered raising the eligibility age for Medicare, an idea that most Democrats oppose.

"I haven't seen any suggestions on what they're going to do on spending," a frustrated Sen. Orrin Hatch, R-Utah, said Tuesday. "There's a certain cockiness that I've seen that is really astounding to me since we're basically in the same position we were before."

Well, says Obama's most powerful ally on Capitol Hill, the Democrats are willing to tackle spending on entitlement programs if Republicans agree to raise income tax rates on the wealthiest Americans -- a nonstarter with Republicans still in control of the House.

"We hope that they can agree to the tax revenue that we're talking about, and that is rate increases, and as the president's said on a number of occasions, we'll be happy to deal with entitlements," Senate Majority Leader Harry Reid, D-Nev., said Tuesday.

But Reid speaks only in the most general terms, wary of publicly embracing specific ideas like boosting Medicare premiums or raising the program's eligibility age.

At the White House, Obama met with a group of small business owners. Participants described the hour-long meeting as a listening session for Obama, with the business owners urging him to reach an agreement.

"They had one message for the president, which is they need certainty. Please get this deal done as soon as possible. They very much want consumers out there knowing that they're going to have money in their pockets to spend. That's why it's so important to pass the extension of the tax cuts for 98 percent of consumers, 97 percent of all small businesses," said Small Business Administration head Karen Mills.

Obama planned to meet Wednesday with more than a dozen leaders from large corporations, including Lloyd Blankfein of Goldman Sachs, Marissa Mayer of Yahoo!, Brian Roberts of Comcast and Arne Sorenson of Marriott.

Obama hits the road on Friday, visiting a Pennsylvania toy factory and broadcasting his case to extend current tax rates for all but those families making more than $250,000 a year.

Private White House negotiations with top aides to House Speaker John Boehner, R-Ohio, and others are cloaked in secrecy, with no evidence of headway.

"There's been little progress with the Republicans, which is a disappointment to me," Reid, a key negotiator, told reporters on Tuesday. "They talked some happy talk about doing revenues, but we only have a couple weeks to get something done. So we have to get away from the happy talk and start talking about specific things."

Republicans say it's Obama and his Democratic allies on Capitol Hill who are holding back, and they point to a balance of power in official Washington that is little changed by the president's re-election. Republicans still control the House, despite losing seats in the election. Democrats control the Senate.

"Democrats in Congress have downplayed the danger of going over the cliff and continue to rule out sensible spending cuts that must be part of any significant agreement to reduce the deficit," said Michael Steel, spokesman for House Speaker John Boehner, R-Ohio.

Just last year, Obama and top Democrats were willing during budget negotiations with Republicans to take politically risky steps such as reducing the annual inflation adjustment to Social Security retirement payments and raising the eligibility age for Medicare, which provides health care coverage to the elderly.

Now, with new leverage from Obama's election victory and a playing field for negotiations that is more favorable to Democrats than during the talks of the summer of 2011, Democrats are taking a harder line, ruling out any moves on Social Security and all but dismissing ideas like raising the eligibility age for Medicare from 65.

"The election spoke very strongly about the fact that the American people don't want to cut these programs that actually really sustain the middle class in America and allow people to become part of the middle class," said Sen. Tom Harkin, D-Iowa.

"I think they feel somewhat emboldened by the election," said GOP Rep. Tom Price of Georgia. "How could you not when your president is re-elected after running four straight years of trillion dollar-plus deficits?"

Indeed, Obama could be in position to blame Republicans if an impasse results in the government going over the fiscal cliff. Democrats already are portraying GOP lawmakers as hostage-takers willing to let tax rates rise on everyone if lower Bush-era tax rates are not extended for the top 2 percent to 3 percent of earners -- those with incomes above $200,000 for individuals and $250,000 for joint filers.

"One thing Republicans have to realize -- we're in much better shape in January," said Harkin, referring to a time when taxes would have already risen and Democrats would be offering to cut taxes for all but the wealthiest Americans. "Fiscal cliff? I don't care."

1
Text Only | Photo Reprints
State, national news
  • Wetland Loss [Duplicate] Report says Prairie Pothole region losing wetlands BISMARCK, N.D. (AP) — Federal officials and conservationists say a recent report detailing wetland losses in the five-state Prairie Pothole Region over the past decade highlights the need for increased protection for the region that provides breeding

    July 24, 2014 2 Photos

  • France: Air Algerie flight vanishes over N Mali ALGIERS, Algeria (AP) — An Air Algerie flight carrying 116 people from Burkina Faso to Algeria's capital disappeared from radar early Thursday over northern Mali, the plane's owner and a French government official said. Air navigation services lost

    July 24, 2014

  • Migrant children face test in Dallas immigration court DALLAS — In a packed Dallas immigration courtroom, Elsy Garcia sits next to her 16-year-old brother, Jose. She last saw him when he was 9, when she fled their home in Usulutan in southern El Salvador. Now Jose is facing deportation. His case is conf

    July 24, 2014

  • Poet takes his act to Las Vegas LAS VEGAS — The old poet is dressed in black, his platinum-blond hair rakishly moussed. He stands amid the hubbub, facing a stern test of his crafted words and carnival-barker delivery. The venue is a smoky lounge called Ichabod’s, east of the Strip.

    July 23, 2014

  • Minnesota race track to refund horse owners ST. PAUL, Minn. (AP) — A Minnesota race track manager says the track will refund horse owners after an audit found it shorted race purses by nearly $437,000 over four years. The St. Paul Pioneer Press reports (http://bit.ly/1p9mtEh ) the Running Aces

    July 23, 2014

  • Bodies of Malaysia jet victims leave Ukraine KHARKIV, Ukraine (AP) — Two military aircraft carrying the first bodies of victims of the Malaysia Airlines crash left the embattled plains of eastern Ukraine Wednesday, while British investigators began work on a pair of "black boxes" to retrieve da

    July 23, 2014

  • Attorney general sues 2 Minn. colleges ST. PAUL, Minn. (AP) — Minnesota's attorney general has filed a lawsuit against two colleges, accusing the schools of misleading criminal justice students about their ability to land a job in their field and about transferring credits to other instit

    July 22, 2014

  • sniper wife pic Jurors start considering Ventura case ST. PAUL — An attorney for Jesse Ventura asked a federal jury Tuesday to award the former Minnesota governor millions of dollars in damages for what he claimed is a lie in a memoir by the late military sniper Chris Kyle. Ventura testified during the

    July 22, 2014 2 Photos

  • Target debuts shopping app "In a Snap" will recognize images

    July 22, 2014

  • Feds to monitor Newark police Probe found pattern of unconstitutional policing

    July 22, 2014