US Deficit Reduction Deal Remains Elusive

VOA, December 09, 2012

WASHINGTON -- With U.S. debt talks stalled, U.S. lawmakers continue to stake out partisan positions as the so-called "fiscal cliff" looms. Without congressional action, massive, across-the-board tax hikes and deep spending cuts will go into effect in three weeks.

Nearly a month has passed since President Obama met with congressional leaders for the only face-to-face post-election debt-negotiation session. In the weeks since, both the White House and Congress’ top Republican, House Speaker John Boehner, have made initial offers on a debt reduction package that would avert the fiscal cliff. Each side has rejected the other’s offer as unacceptable.

In theory, those offers should serve as markers for negotiations that would produce a compromise - one in which Republicans would accept some form of tax-rate hike on the wealthy that is sought by Democrats, and Democrats would accept some cost-saving changes to the social safety net which are sought by Republicans.

Such a deal shows no sign of taking shape right now. Consultations are occurring between the White House and Congress only on a staff level. Lawmakers of both parties are waging the debt fight on U.S. airwaves.

"Unfortunately, what we see out of the president is ‘my way or the highway’," said Republican Congressman Jeb Hensarling. Appearing on ABC’s This Week program, Hensarling said the stumbling block to a deal is Mr. Obama’s insistence on higher tax rates.

"No Republican wants to vote for a tax-rate increase," he said.

But some Republicans say they would accept higher taxes on the wealthy in return for reforms to programs that provide health care and income for retirees. Senator Tom Coburn also appeared on This Week. "Will I accept a tax increase as part of a deal to actually solve our problems? Yes," he said.

Coburn insists tax hikes alone will not solve America’s trillion-dollar annual federal deficit. But just as many Republicans dislike tax hikes, many Democrats are reluctant to reform programs relied on by retirees, as well as the poor and vulnerable.

Democratic Congressman Raul Grijalva said it is unjust to ask middle and lower-income Americans to bear the burden of deficit reduction, after a decade of rising income inequality between the wealthy and everyone else. "And now we are being asked to go back to the same people who have endured this crisis, and ask them to pay up again. No," he said.

President Obama has urged Congress to extend existing tax breaks for all income under $250,000 a year, an idea that has the backing of Democratic Senator Debbie Stabenow.

"At the end of this year, if the House of Representatives does not pass the middle-class tax cut, we are going to see middle-class families across this country paying at least $2,200 more in taxes they cannot afford," he said.

If lawmakers do not reach a debt agreement, federal taxes will rise for all income groups, and domestic and military spending will be cut across the board beginning January 1. Economists believe an austerity jolt of that magnitude could send the U.S. economy back into recession.

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