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Congress returns to Washington under pressure to reach budget deal, avert fiscal crisis

Congress returns to Washington on Monday with mounting pressure to reach a deal that would cut the federal deficit and avert a mix of $500 billion in tax increases and federal spending cuts by January 2.

Awaiting them is an American public uneasy about potential tax hikes or perhaps losing some of their benefits from such entitlement programs as Medicare, Medicaid and Social Security.

The congressional lawmakers also will be greeted by a wave of TV and radios ads from powerful interest groups targeting them and trying to protect their interests -- as Capitol Hill and the White House try to keep the country from going off the so-called “fiscal cliff.”

The labor unions AFSCME, NEA and SEIU are running TV ads in Colorado, Virginia and Missouri urging Senate Democrats to protect Social Security, Medicare, Medicaid and education.

“How do we move our country forward and reduce the deficit? By creating jobs and growing our economy, not by cutting programs that families rely on most,” begins the ad, targeting Sens. Michael Bennet and Mark Udall in Colorado, Mark Warner and Jim Webb in Virginia and Claire McCaskill in Missouri.

Though so-called big labor traditionally backs Democrats, the three unions are also airing radio spots in the districts of Republican Reps. Jo Ann Emerson, Missouri, Don Young, Alaska, and Pat Meehan and Mike Fitzpatrick, Pennsylvania, that urge voters to keep the Bush-era tax cuts for “the 98 percent of Americans who make less than $250,000 a year.”

In addition, AARP, the lobby group for seniors, is running a national ad campaign arguing Capitol Hill and the White House shouldn't "cram decisions about the future of these programs into a last-minute budget deal," as reported by The Wall Street Journal.  And a major wholesaler and two of the country’s biggest drug store chains also have waded into the influence game.

CVS Caremark Chief Executive Larry J. Merlo and Walgreens Chief Executive Greg Wasson are separately calling for a bipartisan solution to prevent broad tax increases and the across-the-board budget cuts.

Their comments echoed those of Costco Wholesale Chief Executive Officer Craig Jelinek, who has urged President Obama to compromise with Congress in a way that avoids tax increases for the middle class.

In the negotiations to reduce the roughly federal deficit, Democrats essentially are calling for tax increases for the country’s highest earners to generate revenue, while Republicans want cuts to entitlement programs like Medicare and Social Security to slash spending.
Republicans and Democrats have struck cooperative tones since Obama's re-election -- after the president and House Speaker John Boehner, R-Ohio, the GOP's pivotal bargainer, spent most of the past two years battling to a stalemate to protect their constituencies.

Obama and top lawmakers are hoping to reach a deal that takes a serious bite out of the government's growing $16 trillion debt and puts it on a true downward trajectory.

Or they might reach an accord that heads off the tax increases and spending cuts, perhaps deferring for their successors.

The House and Senate have four weeks until Christmas, but their leaders, including House Minority Leader Nancy Pelosi, and the president have said they want a deal before then.

Obama has suggested 10-year savings totaling around $4.4 trillion.

The biggest clash has been over whether to raise income tax rates on earnings over $200,000 annually for individuals, $250,000 for families.

Obama wants to let them rise next year to a top rate of 39.6 percent but has suggested he would compromise.

Boehner and other Republicans oppose any increase above today's top marginal rate of 35 percent. Instead, they advocate lower rates and eliminating or reducing unspecified deductions and tax credits. Settling that would resolve the toughest impediment to a deal.

The Associated Press contributed to this report.