Published December 23, 2012
Congress has several options in trying to reach a fiscal deal before the Jan. 1 deadline, though none seems to have an easy path to success.
The mix of existing legislation and new proposals include a House bill passed Thursday that cuts domestic spending. The Republican-controlled House passed the bill before the chamber’s fiscal conservatives blocked Speaker John Boehner’s companion bill that would maintain the existing lower tax rates only for families making less than $1 million annually.
However, Senate Majority Lead Harry Reid said the spending-cut bill will not pass his chamber.
Another option is that Boehner could come up with a plan that appeals to enough House Democrats to get passed, without votes from the conservative caucus.
In August, the House passed a bill to extend the lower Bush-era tax rates for all Americans. But that plan also appears improbable, considering President Obama's repeated vow to include a tax hike on top earners in any deal because domestic spending cuts typically hit lower-income Americans hardest.
The House’s Tea Party caucus appears unwilling to except any of Obama’s proposals, regardless of whether he includes federal cuts, particularly to such entitlement programs as Medicare and Social Security, or where he sets the tax cutoff.
Democratic North Dakota Sen. Kent Conrad, chairman of the Senate Budget Committee, posed one possible alternative Sunday. He suggested Boehner and Obama defer negotiations on spending cuts and other fiscal issues and instead “split the difference” on who gets to keep their tax breaks.