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'Fiscal Cliff' Talks Temporarily Stall

Dec 30, 2012
Originally published on December 30, 2012 5:55 pm

Transcript

JACKI LYDEN, HOST:

This is WEEKENDS on ALL THINGS CONSIDERED from NPR News. I'm Jacki Lyden.

Time is quickly running out for Congress to strike a deal blocking automatic tax hikes and spending cuts that kick in within the New Year. Despite the presence of Vice President Joe Biden at the White House and a flurry of proposals passed back and forth today between Senate Republicans and Democrats, things seem to have reached an impasse this afternoon. Senate Majority Leader Harry Reid has said that nothing will happen this evening.

Joining me from the Capitol for the latest in all of this is NPR congressional correspondent David Welna. David, welcome.

DAVID WELNA, BYLINE: Hi, Jacki.

LYDEN: So tell us the latest. The latest appears to be the statement from Harry Reid.

WELNA: Yes. Senate Majority Leader Harry Reid went out to the Senate floor after his fellow Democrats had met behind closed doors for nearly three hours. And they were discussing the Republicans' latest proposal on averting the fiscal cliff, a proposal that was made last night and for which there was no Democratic counteroffer.

Apparently, they still don't have a counteroffer to make. And Reid went to the floor saying there is still significant distance between the two sides, but negotiations continue. There's still time left to reach an agreement, and we intend to continue negotiations. But he left off saying that there may be further announcements tomorrow morning at 11 a.m. Eastern when the Senate is due to meet again.

All of which is to say that he is not planning to have any kind of a vote by the Senate on any kind of a proposal before then. So I think that we're going to see probably a lot more behind-the-scenes negotiating happening between now and late tomorrow morning.

LYDEN: Well, David, I realize that makes difficult for you to tell us precisely what the sticking point is. But is it, do you think, Social Security or something else?

WELNA: Well, Social Security was a sticking point. And so far as in the Republicans' proposal, they wanted to have a new formula for calculating the cost of living increases for entitlements such as Social Security payments as part of the deal to offset the class of things such as fixing the alternative minimum tax, extending unemployment insurance benefits, things like that the Democrats wanted. But the Democrats said that's an nonstarter, and Republicans backtrack and they took that off the table.

Really, I think the main difference between the two sides is that Republicans would like any new tax rates to affect a smaller number of people. They want to shield larger states from taxes as much as possible. And they're having a lot of trouble figuring out what the threshold should be for cutting off an extension of the Bush-era tax rates, which should be $250,000, $400,000, $500,000 - nobody seems to know at this point.

LYDEN: All right. Well, we'll stay tuned. NPR's David Welna reporting from the Capitol. David, thank you.

WELNA: You're quite welcome, Jacki. Transcript provided by NPR, Copyright NPR.