News Wrap: Lawmakers Butt Heads Over Payroll Tax Cut Extention
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KWAME HOLMAN: Democrats and Republicans in the U.S. Senate moved today to block each other’s plans for extending the payroll tax cut for another year. Democrats wanted to pay for it with a surtax on incomes of more than a million dollars. Republicans said that would only penalize those who create jobs.
Instead, the minority leader, Republican Mitch McConnell, called for freezing federal pay and cutting 200,000 government jobs.
SEN. MITCH MCCONNELL, R-Ky., minority leader: Millions of Americans have had to go without or to live with less over the past few years. Yet all they see here is that Washington just keeps getting bigger and bigger and richer. It’s about time Washington took the hit for a change. So, we think this is a plan that those who are fed up with Washington and Wall Street can embrace.
KWAME HOLMAN: Democrats rejected the Republican plan. Senate Majority Leader Harry Reid charged, the Republicans’ real goal is to protect the wealthy at the expense of everyone else.
SEN. HARRY REID, D-Nev., majority leader: This is really a subterfuge, what they are doing, what they are trying to do. They are not letting the rich do what’s fair, as seen by the American people — and not only that. We’re trying to create jobs. They are going to cut jobs, probably as many as 250,000 jobs, middle-class jobs.
KWAME HOLMAN: Neither side appeared to have the 60 votes likely to be needed to advance a plan.
The economy turned in a mixed report today. Government data showed factory output grew last month, and construction spending was up in November. But first-time claims for unemployment benefits moved back above 400,000 last week.
It was enough to keep Wall Street in check, after Wednesday’s huge rally. The Dow Jones industrial average lost 25 points to close at 12,020. The Nasdaq rose nearly six points to close at 2,626.
U.S. auto sales in November may turn out to be the strongest in more than two years. Chrysler reported today its sales were up 45 percent over a year ago. Ford sales went up by 13 percent, and General Motors had a gain of 7 percent. The industry says sales were driven by people who held off buying during the recession. The average age of a car on U.S. highways is now more than 10.5 years, a record.
The European Central Bank may reverse course and take stronger action on the continent’s debt crisis. Bank chief Mario Draghi hinted that today before the European Parliament in Brussels. He opened the door to buying more bonds of heavily indebted governments in a bid to safeguard the euro system.
But Draghi said, first, the Eurozone nations must link their fiscal policies to prevent runaway spending.
MARIO DRAGHI, European Central Bank: It’s first and foremost important to get a commonly shared fiscal compact right. Confidence works backwards. If there is an anchor in the long term, it is easier to maintain trust in the short term. After all, investors are themselves often taking decisions with a long-term horizon, especially with regard to government bonds.
KWAME HOLMAN: In another development, French President Nicolas Sarkozy and German Chancellor Angela Merkel announced they will meet Monday in Paris. Sarkozy said they will call for fundamental changes in the treaty governing the euro system.
Islamist parties in Egypt now appear certain to be the big winners in that country’s landmark parliamentary elections. Newspapers in Cairo today predicted a major victory for the Muslim Brotherhood, the country’s oldest Islamist group. An ultra-fundamentalist party was competing for second place.
Meanwhile, official results from this week’s first round of voting were delayed until tomorrow. The elections commission said it needs more time to count all the votes because of the large turnout.
The U.N.’s top human rights official concluded today that Syria has plunged into a civil war. Navi Pillay said the death toll may be far higher than the official figure of 4,000 killed since the Syrian uprising began eight months ago. Also today, the U.S., and the European Union and the Arab League imposed additional sanctions on a dozen leading Syrians and 11 Syrian companies.
Those are some of the day’s major stories.