Lawmakers, while ruing the inability to work out a multi-trillion-dollar grand bargain in time, have said a pared down version dealing mainly with taxes was within reach.
Citing unnamed people briefed on the talks, The Washington Post said one version under consideration would protect nearly 30 million taxpayers from paying the higher, alternative minimum tax rate for the first time and maintain unemployment benefits for two million people.
The plan also would halt a steep cut in Medicare reimbursements for doctors and preserve popular tax breaks for both businesses and individuals, such as those for research and college tuition, the report said.
But the two sides were still at odds over where to set the limits of wealthy – at $250,000 or $400,000 of annual income – and over taxes on inherited estates.
Nor has there been agreement on spending cuts so sought after by Republicans, who say excessive government spending is the main driver of US debt.
Republicans seeking leverage may try to hold Democrats’ feet to the fire on the looming issue of the debt ceiling, setting up another battle over the government’s borrowing limit, which the US Treasury expects will be maxed out by March.
Obama warned that if an agreement was not reached in time, he would ask the Senate to hold an up-or-down vote on a basic package that protects the middle class from a tax hike, extends unemployment insurance, and “lays the groundwork for future… deficit reduction.”
In a weekly Republican address, Senator Roy Blunt expressed some optimism, saying that “going over the fiscal cliff is avoidable.”
But he criticized Democrats for focusing mainly on taxes while setting aside government spending, arguing that such inaction “shouldn’t be an option.”