There are signs that Senate Republicans could accept such a strategy. “The truth of the matter is, if we do fall off the cliff after the president is inaugurated he’ll come back and propose just what he proposed yesterday in leaving Washington and we’ll end up adopting it,” Sen. Johnny Isakson, R-Ga., said Sunday on ABC’s “This Week.”
“But why should we put the markets in such turmoil and the people in such misunderstanding or lack of confidence. Why not go ahead and act now?” he said.
For the Senate to pass a bill, Republicans would have to forego a filibuster or at least eight Republicans would need to join Democrats to reach a 60-vote majority. It would be up to Senate Minority Leader Mitch McConnell of Kentucky to decide on a filibuster, but McConnell has remained largely apart from the legislative machinations surrounding the talks and has said it is up to the White House and Senate Democrats to come up with a plan.
Aides close to the leadership said McConnell and Senate Majority Leader Harry Reid, D-Nev., had not been in contact since last week, when the Senate broke for the holiday.
The Senate has already passed legislation (S 3412) to continue tax cuts on income below $250,000 so there is not much mystery about what a new bill would look like, a Democratic leadership aide said.
“We have legislation. It’s basically our bill from July plus whatever else people are willing to add,” the aide said. “All that stuff can be assembled in 15 minutes. The question is whether Republicans will agree to let it move.”
But a smaller plan of the sort Obama described may be more difficult for House Republicans to swallow than a broader package that included larger tax increases but also substantial, identifiable spending cuts.
As it stands, Democrats are proposing to let tax cuts expire on incomes above $200,000 for individuals and $250,000 for couples, a policy that would raise roughly $800 billion if continued over 10 years.
By contrast, Obama’s last offer to Boehner included a tax increase of $1.2 trillion along with more than $900 billion in spending cuts. Boehner wanted at least $1 trillion in spending cuts and no more than $1 trillion in new revenues, most of that from a tax overhaul and some from allowing rates to rise on income above $1 million.
The leaders were also interested in ending or permanently extending temporary policies and raising the debt ceiling for at least another year in an effort to avoid future fiscal battles, make more room for other legislative initiatives and improve the climate for economic growth.
For now, however, both sides may be settling in for what may be more tough negotiations over many of the same issues they have not been able to resolve over the past two years of trying to strike a grand bargain. “I remain committed to working towards that goal,” Obama said on Dec. 21, “whether it happens all at once or whether it happens in several different steps.”