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Taxes Remain Sticking Point in Fiscal Cliff Talks

U.S. Capitol; photo by Andrew Harrer/Bloomberg via Getty Images

Photo by Andrew Harrer/Bloomberg via Getty Images.

The Morning Line

With negotiations between White House officials and congressional staffers taking place behind the scenes, word came Monday that President Obama called House Speaker John Boehner and Senate Majority Leader Harry Reid over the holiday weekend to talk about avoiding the “fiscal cliff.”

The development was the latest sign of progress in averting a mix of automatic spending cuts and tax increases set to take effect in January that both the administration and independent analysts have warned would have negative consequences for the country’s economic well-being.

The Washington Post’s Zachary Goldfarb and Lori Montgomery report, however, that as of Monday, enough progress had not been achieved to warrant another face-to-face meeting between the president and congressional leaders.

Talks began 10 days ago with a meeting between Obama and congressional leaders at the White House. That session ended with the four congressional leaders — Boehner, Reid, House Minority Leader Nancy Pelosi (D-Calif.) and Senate Minority Leader Mitch McConnell (R-Ky.) — standing side by side and expressing optimism about a potential deal. But continuing work by staff up to the Thanksgiving weekend and on Monday has not yet made enough progress for a second meeting between Obama and the congressional leaders to be scheduled.

The main point of contention remains the debate over tax rates, with Mr. Obama and congressional Democrats arguing they must be increased on wealthier Americans, and Republicans voicing support for a package with additional revenues generated by closing loopholes and deductions.

White House press secretary Jay Carney told reporters at the White House Monday that such comments from Republicans were “welcome,” but they did not go far enough.

“The math has to add up,” Carney said. “And that’s why the rate element of this is so important, because making proposals about limiting deductions and closing loopholes are important, but it’s not necessarily realistic to assume that they can achieve the kind of revenue target that’s necessary for a balanced approach to a solution to these problems.”

In order to get a deal with Republicans, Carney noted the president would also consider reforms to Medicare and Medicaid. “He believes and understands that in order to achieve a deal, a compromise that everybody has to make some tough choices, and he remains committed to that principle.”

On that front, Robert Pear of the New York Times reports that Mr. Obama is facing pressure from his liberal allies:

Even if Mr. Obama and Republican leaders in Congress could agree on savings in Medicare and Medicaid, the president would face resistance from some liberal members of his party who oppose cuts in the two giant health care entitlement programs. Medicare and Medicaid insure one-third of all Americans, account for more than one-fifth of the federal budget and are expected to grow much faster than the economy in the coming decade.

Two staunch liberals, Senators Tom Harkin of Iowa and John D. Rockefeller IV of West Virginia, said in a letter to Mr. Obama that he should “reject changes to Medicare, Medicaid and Social Security that would cut benefits, shift costs to states, alter the structure of these critical programs, or force vulnerable populations to bear the burden of deficit reduction.”

More than 40 House members, led by the Congressional Progressive Caucus, declare in a resolution that any deal on taxes and spending “should not cut Medicare, Medicaid or Social Security benefits.”

To help build public support for his approach, the president plans to hit the road later this week.

Politico’s Byron Tau reports that Mr. Obama will travel to a toy company in Hatfield, Pa., to make the case that the uncertainty over the fiscal cliff could lead to diminished consumer spending this holiday season.


The Supreme Court might redefine the meaning of a workplace supervisor because of a case it heard Monday.

The case involves a woman harassed by a female coworker because of her race. Lower courts said the coworker was not a supervisor because she couldn’t hire and fire employees, and therefore Ball State University, where the woman worked, wouldn’t be culpable. But that definition of supervisor should change to include broader responsibilities, such as overseeing daily duties, attorneys arguing the case said.

Marcia Coyle of the National Law Journal explained on Monday’s NewsHour:

If the court accepts the stricter definition, the lawyers and organizations that represent workers fear that employers will start moving categories of workers into the supervisor category in order to avoid liability, whereas employers are concerned with a broader definition that they will have greater potential liability.

The case Coyle discussed with Jeffrey Brown wasn’t the only issue before the court this week.

Also on Monday, the court ordered a lower court to review a challenge to the Affordable Care Act from Liberty University. The suit alleges that mandates in the act violate religious freedom, and the court set aside the issue as it worked out challenges to the individual mandate.

“I bet you dollars to donuts if Liberty University loses, that Liberty University will be back at the Supreme Court probably next year,” Coyle said.

Watch the discussion here or below:

The Supreme Court may be back in the news on Friday, when it reviews in private cases dealing with same-sex marriage. After the review, the court may announce if it will hear any of the cases this term.


Tuesday’s tidbit from NewsHour partner Face the Facts USA features a slick video to illustrate the point:

Members of Congress, both senators and representatives, now make $174,000 a year … But members have not had a raise since 2009. Their pay, along with that of all federal workers, was frozen in an effort to trim the deficit.

The nonpartisan organization has retooled post-election to offer new facts tied to the news.


  • On Monday, Ray Suarez spoke with Michael Dimock of the Pew Research Center about the critical role played by young voters in the 2012 election. You can watch the discussion here or below:

  • New Jersey Gov. Chris Christie has filed paperwork for a 2013 re-election campaign. On the heels of that announcement, Quinnipiac University released a poll that shows the Republican with an approval rating of 72 percent, the highest it has measured for a New Jersey governor. A Rutgers-Eagleton poll released Monday finds similarly soaring support of Christie’s re-election.

  • Rep. Shelley Moore Capito, R-W.Va., will run in 2014 for the state’s U.S. Senate seat currently held by Democrat Jay Rockefeller. Capito’s effort could pose quite the challenge for Rockefeller, though the five-term incumbent hasn’t said yet if he’ll run again. Politico reports that Capito’s announcement was met with resistance by some conservative groups.

  • Politico’s David Rogers reports on the faltering of a sportsmen’s bill in the Senate Monday evening.

  • Iowa GOP Gov. Terry Branstad suggests that his state eliminate its storied Straw Poll in favor of fundraising events.

  • Former Florida GOP leaders say the party made voting in the state cumbersome to suppress Democratic voters, the Palm Beach Post reports. And voter fraud? “It’s all a marketing ploy,” the state’s former GOP chair said.

  • The irony is official: Mitt Romney received 47 percent of the national vote.

  • Blame it on technical difficulties. More than 10,000 ballots cast by email in New Jersey after Hurricane Sandy may not be counted, Politico reports.

  • California Sen. Dianne Fienstein has received the most votes ever for a U.S. Senator.

  • Roll Call’s Shira Toeplitz names members of the crowd clamoring for recently resigned Rep. Jesse Jackson Jr.’s seat in Illinois. The Hill’s take on the possible candidates adds one more name: Sam Adam Jr., attorney of former Gov. Rod Blagojevich.

  • This brother and sister in small-town Minnesota wanted to retire from their positions in local governments. Too bad voters won’t let them, the Associated Press reports.


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Questions or comments? Email Christina Bellantoni at cbellantoni-at-newshour-dot-org.

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