This article first appeared in the St. Louis Beacon, Dec. 27, 2012 - President Barack Obama said after a bipartisan meeting Friday that he was cautiously optimistic that some sort of agreement on the fiscal cliff might be reached. Senate Democratic leader Harry Reid of Nevada and Republican leader Mitch McConnell of Kentucky were trying to draw up a scaled-back deal that could come to a vote on Sunday. Obama will appear on "Meet the Press" to make his pitch; U.S. Sen. Roy Blunt was to give the GOP response on Saturday.
Read the Beacon's earlier story below:
WASHINGTON – With the fiscal cliff looming — and the nation’s debt limit nearing its ceiling — in a few days, President Barack Obama returned to the White House Thursday and senators reoccupied the Capitol.
Senate Majority Leader Harry Reid, D-Nev., said Thursday that it is likely too late for Congress to reach a deal before the fiscal cliff deadline. "I have to be honest — I don’t know, time-wise, how it can happen now," Reid said in Senate remarks.
A few hours later, however, Obama was reported to have called a Friday meeting with congressional leaders to discuss a new tax proposal. And House Speaker John Boehner, R-Ohio, told Republicans that he would call the House into session for likely votes on Sunday evening.
In a statement later Thursday, Senate GOP Leader Mitch McConnell, R-Ky., said Republicans would take a look at the new White House proposal, but he wasn’t optimistic. “We’re coming up against a hard deadline here, and, as I said, this is a conversation we should have had months ago,” McConnell said.
He added that “Republicans aren’t about to write a blank check for anything Senate Democrats put forward just because we find ourselves at the edge of the cliff. It’s not fair to the American people.”
But the GOP leader left the door slightly ajar for a possible small deal. “Hopefully there is still time for an agreement of some kind that saves the taxpayers from a wholly preventable economic crisis,” he said. (End update)
Before those comments by Senate leaders, the region’s House members — stuck on the sidelines for the moment — said chances appear to be slim for a last-minute deal to avert the combination of tax increases and automatic spending cuts that some economists warn could lead to a recession.
At best, some lawmakers said, Congress and the White House could patch together a “small deal” to postpone the cliff a few months – and complicate the task of Internal Revenue Service officials who redraw tax-withholding tables. Few see prospects for a "grand bargain" anytime soon.
"My prediction has been ... they will kick the can down the road," said U.S. Rep. Jerry Costello, D-Belleville.
"There will not be a long-term agreement, but there will be a temporary one not to raise taxes and do basically what we tend to do with the budget: a continuing resolution and do the [tax] extenders until maybe March."
Also predicting such a "patch" approach, retiring U.S. Sen. Kay Bailey Hutchison, R-Texas, said Sunday on CBS’s Face the Nation: "In four days we can't solve everything." That's how long senators will have before the New Year's deadline for action.
Many lawmakers were more pessimistic. U.S. Rep. Blaine Luetkemeyer, R-St. Elizabeth, a member of the House Financial Services Committee, said in an interview Friday that he feared "we’re going over the cliff."
"When the political posturing is as far apart as it is right now in public, and no real framework in private talks to even start to structure negotiations, you’re in trouble," he said. "There is no way to get a Big Deal by the end of the year."
Luetkemeyer commented after Boehner opted last week against a vote on his "Plan B" option, which would have allowed tax rates to increase on those with incomes over $1 million, but extended most Bush-era tax cuts. Democrats opposed the measure, and he didn't have enough GOP votes to pass it.
U.S. Rep. John Shimkus, R-Collinsville, also said he was pessimistic. "We’re not really getting the president engaged on spending reductions. So the strategy was: raise taxes on millionaires and above," he said in an interview.
“Last time I checked, $250,000 is not a millionaire. That’s where I’ve had frustration” with Obama’s position. “In my district, those earners are mostly small businessmen.”
Shimkus conceded that "we have a portion [of Republicans] who will just not vote for any tax increase, period. And then there are members that have made commitments" on tax changes and spending cuts, and felt they would be “out on a limb” if they voted for the Boehner plan.
The wise approach, he said, is: "Never say what you’ll never do."
But Costello, who is leaving Congress on Jan. 2, disagreed with his friend Shimkus about Plan B. “These are unnecessary games that should not be played on the floor of the House,” said Costello. "Trying to make political statements or take all options off the table does not help the process."
While Luetkemeyer didn’t like aspects of Plan B, he said "it was a deal worth taking." He told the Beacon he would have endorsed "the opportunity to keep taxes from going up on 99.8 percent of those who pay — and make that tax cut permanent — as well as give some certainty to people with regard to the (alternative minimum tax) situation and the estate tax."
With that option withdrawn by Boehner, Luetkemeyer said he doesn’t expect much action from the Senate. "The House passed a bill to protect all taxpayers from these increases, but the Senate’s not going to pass it." He said Boehner "could see that there’s not going to be a big deal by the end of the year. He was just trying to minimize some of the impact to taxpayers."
On Wednesday, Boehner said that he planned a conference call with House GOP members to discuss the options, and he vowed to call House members back to the Capitol on 48 hours notice to vote on anything approved by the Democratic-controlled Senate.
But the Senate seemed unlikely to take much action. GOP Leader McConnell would be key to any last-minute deal, and aides said he had no contact with Obama until shortly before the Senate's return this week. Because of procedural hurdles, it would take at least three days for the Senate to act.
Complicating the situation, the Treasury Department said Wednesday that the government will hit its $16.4 trillion federal debt limit on Monday. The agency plans to use "extraordinary measures" to continue borrowing until Congress takes action to raise that debt ceiling.
Luetkemeyer said “the next big situation is the debt limit discussions. And after that will be the continuing resolution on the rest of the budget. Those will be two opportunities for us to try and sit down the administration and come up with plans to cut spending and get these tax cuts extended.
“Every economist I’ve talk to … has indicated that if all these things happen, you’ll see a decline in the economy. And if nothing is fixed, then we’ll go into a recession. The responsible thing to do is try and take some action before that happens."
But Shimkus isn’t optimistic that the Senate will take action on a House-passed bill from last summer that would extend all the tax breaks. Senate Democratic Leader Harry Reid, D-Nev., “could pick up our bill from August and amend it” to reflect the Senate position, Shimkus said. “Unless the Senate does something like that, we may not come back.”
Shimkus added: "A lot of us are tired of seeing the Senate just sit on the sidelines. Reid is spending all hs time lecturing, without doing anything."
Costello thinks small deal still possible
Costello places much of the blame on House Republicans who are unwilling to compromise on taxes.
"In order to reach an agreement, you have to have compromise," Costello said. "The president, before the election, clearly said what he was for. He was for increasing the tax rate on individuals who earn over $250,000 a year.
"The American people knew that, they voted for him and reelected him. Even though he was re-elected making that pledge, he has compromised," Costello said.
While Boehner said he would raise taxes on people earning over $1 million, "the president has said he would come up from $250,000 to $400,000. Speaker Boehner and the Republicans have not responded to that compromise. It’s $1 million or nothing."
Because so many Republicans have signed a no-tax-increase pledge, Costello said, "it’s almost an impossible situation" for Boehner to negotiate.
"I think if he had a more reasonable caucus that wanted to compromise and do what’s best for the nation, that we would have had a deal a long time ago," Costello said. “Because I think the speaker recognizes that he’s having a difficult time getting his members to reach a reasonable agreement.”
At the last minute, Costello is predicting a temporary extender bill that would provide more time for a longer-term deal to be negotiated.
"I don’t think either side will let us go over the fiscal cliff. It’s not a good option" for the economy.
Cleaver opposes entitlement cuts
U.S. Rep. Emanuel Cleaver, D-Kansas City, who heads the Congressional Black Caucus, called the current situation an "impasse" and blamed Republicans for focusing more on their political futures than on reaching a solution.
"Instead of spending the time messaging, we ought to be spending the time to really come up with a deal," Cleaver told KCUR Radio.
However, Cleaver and other liberals oppose entitlement reform, which some analysts contend is essential to reach a long-term deal. For example, he said he opposed the revised inflation adjustment for Social Security that Obama had proposed in his most recent offer.
“I think many Democrats in the House who supported the president are not about to vote for that plan,” Cleaver said. "One of the problems with that plan is annual cuts in benefits for the typical person who is receiving $15,000, $14,000 a year by the age of 75 will be $560 a year."
Cleaver said liberals "see ourselves as protectors of the poor. We're not going to" back that plan. "We'll compromise on anything except cutting the benefits of the people I represent."