Republicans demand Social Security cuts as part of tax deal

Federal lawmakers trying to prevent the New Year tax increase.
Wire
Dec 30, 2012
Talks on preventing the New Year tax increase hit a major setback Sunday when Republicans demanded — and Democrats rejected —to trim cost-of-living increases for Social Security recipients.

The proposal, presented by aides to Republican Senate Minority Leader Mitch McConnell, R-Ky., was swiftly rejected by Senate Majority Leader Harry Reid, D-Nev.

McConnell said he asked Vice President Joe Biden to help broker a compromise.

“I’m willing to get this done, but I need a dance partner,” McConnell. “The consequences of this are too high.”

Democrats said they viewed the Social Security proposal as a step backward.

“When Leader Reid received this recent offer he was taken aback and disappointed,” said a Senate Democratic aide who spoke on the condition of anonymity to discuss the private talks. “We feel we are further apart than we were 24 hours ago.”

Republicans were already seeking a narrowed definition of wealthy, those earning more than $500,000, and wanted to prevent higher inheritance taxes.

Adjusting the cost of living increase for recipients of government benefits, including Social Security, had been offered earlier this month by President Barack Obama in talks with House Speaker John A. Boehner when they were negotiating a broader deficit-reduction deal. But once those talks fell apart, the Senate leaders had been trying to cobble together a more modest proposal that would simply avoid the tax increases coming after the current tax rates expire on Monday.

Reid said he had no immediate counteroffer but might later in the day.

Obama had initially sought to keep tax rates in place for all but the wealthiest 2 percent of taxpayers, those with incomes above $250,000, and once suggested moving to a $400,000 threshold as part of a broader deal that would also include spending reductions and a resolution to the coming debate over the debt ceiling.

Democrats have been willing to entertain the higher $500,000 income tax threshold Republicans want, but have resisted coupling that with a 35 percent rate on inheritance taxes for estates valued at more than $5 million. Obama wants the estate tax to rise to 45 percent on estates above $3.5 million.

With hours remaining to cut a deal, Obama has warned that Democrats will simply call a vote on his initial proposal — preventing tax increases on all but those incomes above $250,000 – and force the issue.

The president’s proposal would also include other must-pass year-end legislation — including an extension of long-term unemployment benefits, which expired Saturday.

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By Lisa Mascaro - Tribune Washington Bureau (MCT)

©2012 Tribune Co.

Visit Tribune Co. at www.latimes.com

Distributed by MCT Information Services

 

Comments

kURTje

Yeah...this is great. Told you. Shades of Alan West. You oldsters might soon know.

swiss family

why don't we demand more from our representatives??? look how much we already pay in taxes, and yet our schools are underfunded, our highways are a mess, crime is sky rocketing, with a good chunk of that coming from our representatives...they seem to forget that it is OUR money WE give them to run the country, they are doing a poor example of it, acting like first graders with their bickering( I apologize to the first graders)and they seem to work less and less days per year???I think if we would make them share the same retirement benefits that we all are part of, if their medical was the same as ours, if we refused to allow them to take a vacation , or give themselves any more raises, until they can come to an agreement, maybe, just maybe they will get tired of working and seek to find where we agree, and in the best interest of the country..

blackek

we are about to take the 8============D

Contango

The headline is misleading. President Obama had agreed to a "chained CPI" which lowers the rate of increase for SS payments.

Not sure that Pres. Obama could have gotten the Dems to agree to that.

Let's just tax, borrow and spend this country into the fiscal toilet like it appears that Dear Leader wants.

2012 - $16T Federal deficit
2016 - $20T Federal deficit

http://abcnews.go.com/Politics/O...

☭ FORWARD SOVIET! ☭

mikel

and you democrats can't understand why the gop is so against what the prez is trying to do!!!!!!! GREAT TIMING!!!!!

"With 'Fiscal Cliff' Looming: Obama Just Issued Executive Order To Give Federal Employees Pay Raises"

just wondering why all the media outlets aren't putting this out there? what about it NR? don't you want to be a leader?

http://www.pakalertpress.com/201...

Dr. Information

SSI will dry up around 2030 without some fixing. But you old folks are ok with that. Screw everyone else as long as it doesn't effect me. Hint hint. SSI isn't retirement.

jack langhals

Relax.It is all B.S.You sent all those idiots back to congress,you deserve what you get !