After initial optimism from Republican and Democrat leaders of the Senate heading into the weekend that they were moving forward on creating a bill to avert the “fiscal cliff” that will take place on January 1, the word today from Capital Hill is that talks are progressing more slowly than initially hoped.
All the Senate was not formally in session on Saturday, members worked in an attempt to get a measure drafted that could be put forth for a vote. However, an aide to one of the Senators noted there was “no major progress.”
The “fiscal cliff” refers primarily to a number of tax breaks that will expire at the start of the new year, which will mean the vast majority of Americans will start paying higher income tax come January 1. In addition, the fiscal cliff includes various spending measure that will end as well, which means the end of those programs and the loss of jobs. This includes significant spending on the military.
Representatives Steve Stivers, R-Ohio, and John Yarmuth, D-Kentucky, indicated they now expect work to continue through Sunday and that a vote from the Senate would likely come no earlier than Monday. The measure would then have to pass to the House for a vote.
“I’m looking for something on Monday,” Yarmuth stated. “The Senate is going to have to act first. They’ll need that time through Sunday and early Monday.”
Stivers added, “I think we’ll see it Monday. I don’t think we’ll see it Sunday.”
The current expectation is that any measure passed at this point will only extend expiring tax cuts for a majority of Americans. Steps to address spending cuts will likely have to be addressed in 2013.
Senate Majority Leader Harry Reid, D-Nevada, was working Saturday at an unknown location. Senate Minority Leader Mitch McConnell was seen on Capital Hill. McConnell noted to reporters on Saturday that “[Senator Reid and I have] been trading paper all day and talks continue into the evening.”
Should the Senate pass a measure early enough on Sunday, members of the House would meet to review and vote on the measure ahead of the New Year’s Day deadline.
Although Senator McConnell is working with Democrat leaders to get a new bill passed, there is concern that he will be unable to get a bill that increases taxes for any American through the Republican-controlled House. While the measure that is expected to come from the Senate will keep tax cuts in place for a majority of Americans, those who earn more than $250,000 will see a tax hike.
And there is continuing concern with each day that passes that there is simply not enough time left in the year to get any measure through both the House and the Senate and then signed into law by President Obama.
The last time Congress had significant discussions in an effort to address the budget was in summer 2011. At that time there was a believe that any measure passed would be the first step toward improved economic growth and a reduction in the federal deficit. However, the past year has seen the economy remain relatively stagnant and the deficit spiral to more than an additional $1 trillion in debt above the level seen in 2011.
Mark has been a contributor to legal web sites related to bankruptcy, tax, and criminal law since 2011. He has an Accounting degree from Texas A&M University.