Democratic Sen. Charles Schumer drew a sharp line today in negotiations with Republicans on the looming “fiscal cliff” of tax and spending issues, saying any GOP proposals on revenue should be measured against the higher rates for wealthy Americans due to take effect in January.
It is “not mathematically possible” to target the tax credits and deductions Republican leaders have said could be part of a tax agreement without also raising taxes on people making less than $250,000, the New York Democrat said on NBC’s “Meet the Press.”
“The only way to do it, the only way mathematically I have seen to do it, is go to that 39.6 percent [tax] rate” rather than the current lower rate, Schumer said.
The higher rate for top income earners is one of many tax increases set kick in at the start of 2013, along with automatic, across-the-board spending cuts that together will send a shock wave through the economy and possibly send the country into another recession.
Amid a series of post-election statements last week aimed at setting positions ahead of negotiations, President Barack Obama invited Congressional leaders to the White House this Friday to begin the high-stakes talks that may reset the country’s fiscal policies for years to come.
In a series of appearances on TV talk shows today, Republicans and Democrats said they were optimistic they can reach a deal even though they look no closer on the details of an agreement.
“I think there is a deal. The yin and yang of this, there has to be revenue,” Sen. Bob Corker (R-Tenn.) said on “Fox News Sunday.” But, he said, “What you have tied to that is true entitlement reform.”
To Democrats, however, the central point is 2001 and 2003 tax cuts, which they say should expire for upper-income earners.
Obama said Friday that he wants Congress to immediately extend the tax cuts for all but the top earners, or 98 percent of those who pay income tax. Speaker John Boehner (R-Ohio) said he would support additional revenue by overhauling the tax code and limiting deductions.
“How that revenue is collected is critical,” Sen. Patty Murray (D-Wash.) said on ABC’s “This Week.” “If it’s just eliminating tax loopholes that affect middle-class families and they don’t have a mortgage deduction or a charitable deduction or we raise their co-pay on Medicare, all of that revenue falling on the middle class is not a fair and balanced way to get to a deal.”