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Congress Returns to Washington to Aim For Balanced Budget in Lame-Duck Session

With the ceremonial welcomes of newly-elected members of Congress, members of the House and Senate hope to find a solution to the avert the country from sequestration — the triggered tax increases of $500 billion and spending cuts of $109 billion scheduled for January. Judy Woodruff talks to PRI’s Todd Zwillich for more.

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    Capitol Hill was back in business today, as lawmakers began tackling what promises to be a full agenda for what's left of the legislative year.

    Judy Woodruff has our look.


    With the long campaign break finally over, Congress came back to Washington today for the lame-duck session, the first order of business, welcoming newly elected members.

  • ANGUS KING, I-Maine Senator-elect:

    The United States Senate cufflinks.


    That's right.


    It's beautiful. Wow.


    Welcome to the club.


    Thank you. Thank you.


    Republican Senator Susan Collins of Maine traded gifts and pleasantries with her state's incoming independent senator, Angus King. Afterward, King said he still had not made a final decision on which party he would caucus with.


    Whichever decision I make, I am not declaring opposition or inability to work with or unwillingness to work with the members of the other party.


    Senate Minority Leader Mitch McConnell sat down with the three confirmed additions to the Republican Conference. He said it was time to tackle the nation's problems.


    The country has an extraordinarily difficult set of challenges facing us over the next couple of months. The election is behind us. And we're ready to get started.


    The most difficult of those challenges will be reaching a deal to avert the so-called fiscal cliff. Starting January 1, some $500 billion in tax increases will take effect with the expiration of the Bush era tax cuts and the payroll tax holiday.

    At the same time, automatic spending cuts will hit defense and domestic programs, totaling $109 billion. The spending reductions were triggered when the congressional super committee failed to reach a broad deficit deal last year. That came after talks broke down between the president and House Speaker John Boehner.

    Senator Collins told the NewsHour today that she's optimistic lawmakers can still strike a deal and stave off the spending cuts.


    So this has to be done carefully. I think the president's right that — and I have said this for a long time — that we have to look at both revenues and spending. But there needs to be compromise on both sides.


    But McConnell said the president needs to put a proposal on the table if any agreement is going to pass.


    The time for the president to lead is now. And that means offering a concrete plan that takes into account the fact that half the Congress opposes tax hikes.


    On the Democratic side, House Minority Leader Nancy Pelosi rejected calls by some in the party who have argued for letting the country go over the cliff to get a better deal.

  • REP. NANCY PELOSI, D-Calif.:

    But I want you to be disabused of any notion that there's any widespread thought that it would be a good thing for our country for us to go over the cliff. We want an agreement. We want an agreement.


    Lawmakers will have to try to resolve their differences on the fiscal cliff and other issues with one eye on the clock.

    Right now, the House plans to recess next week for the Thanksgiving holiday and currently has only three more workweeks left this year.

    The Senate, meanwhile, has yet to set a target adjournment date. And there is pressure from outside groups. President Obama met privately today with leaders of liberal organizations and labor unions, including Richard Trumka, head of the AFL-CIO.


    We're going to work together because we have the same goals. That's protecting the middle class. That's creating jobs in this country and making sure that Social Security, Medicare and Medicaid beneficiaries don't get hurt in this process.


    The president is expected to hear from business executives tomorrow. And he will sit down face to face with congressional leaders on Friday.

    And here now to walk us through the issues on congress' lame-duck agenda is Todd Zwillich. He's a reporter for PRI's "The Takeaway" on WNYC radio.

    Todd, welcome back to the NewsHour.


    Good to be with you, Judy.


    So, now, the election was a week ago today. What has changed since Congress last got together on all these questions? And was it a complete impasse?


    Well, two main things have changed. One, you just mentioned, the election.

    President Obama and Democrats won that election. Really, President Obama won it big. And it's relevant in this case largely because he ran on an explicit agenda of having tax rates for the wealthy go back up. And that's what this negotiation, largely, not exclusively, but largely is all about.

    So President Obama's coming to the table saying, hey, Republicans we didn't reach an agreement with the super committee. We didn't reach an agreement with the Biden talks. We didn't reach agreements largely with debt limit fights from those years ago. I just won. And I ran on this. So this is my hard position.

    Another thing has changed in addition to the election. And it is the fiscal cliff that you mentioned in the setup there. We are now much closer to the deadline of those Bush era tax cuts going up. And the leverage has now changed. If there is no agreement at all by Dec. 31, all of those rates go up.

    And that fundamentally changes the debate over who can vote for a tax increase and when.

    One of the cudgels being put forward by a lot of liberals on the Hill — there's a little bit of good cop/bad cop going on. You heard Nancy Pelosi saying nobody wants to go over the cliff. Well, there is some good cop/bad cop going on. And I bring it up for this reason.

    After Jan. 1, there are a lot of Republicans who won't vote for a tax increase. There are liberals on the Hill saying, that's fine. After Jan. 1, all the tax rates go up. And then every vote is to bring taxes back down. And you can have all the tax cut votes you want.

    So, that's changed too. The leverage has changed there.


    So, is it clear whether the president has more leverage or not? Because you started out suggesting he does have more cards to play this time. But, on the other hand, he can't — they can't guarantee the Republicans are going to go along.


    No. And there's never a guarantee. It's a matter of going straight to the public for one thing and saying, I ran on this, you elected me, this is my agenda.

    And he does have more leverage. He has more leverage. If you don't want to call it an electoral mandate, because that's a loaded word, especially in Washington, you can say that he did run explicitly on this.

    And that sword of Damocles, that fiscal cliff, and also the sequester enforcement mechanisms, which will cut spending immediately, members do not want that to happen. That's leverage, too.


    So, we already hear some Republicans changing their tune to some extent. Speaker Boehner is already talking about closing loopholes. Other Republicans are sounding maybe like they're prepared to look at revenue.

    What are — are there concrete examples there that have the makings of some kind of deal down the road?


    Very little is concrete at this point. But the movement from saying we don't want government to grow at all, the answer to this fiscal crisis is not to grow government, to the position that you're hearing from leadership now, which is, yes, we can have revenue, that's part of a broader deal that we're going to make, that's a substantial shift.

    That's not the same thing as the fight over tax rates, income tax rates. The president has said, I will sign no deal that doesn't bring the income tax rates for the top earners back up to 96.5 percent.

    That's a slightly — there's a new nuance there that gives politicians wiggle room over what the definition of revenue is, but there has been movement on that.

    And there's been even more movement. You heard a prominent Republican on the Sunday shows, Bill Kristol, a prominent conservative spokesman, saying, Republicans, take this deal. It won't kill us to let tax rates go up on the very rich.

    Now, he doesn't have a vote in Congress, but he can offer political cover if Republicans choose to run under it. They haven't yet. But they might.


    Yes, because the vast majority of Republicans are still saying no tax rate increase. The president is saying there has to be a tax rate increase. So, why aren't they just as far apart as ever?


    They're pretty far apart. And I don't want to give the impression they're not. There is movement on the idea again of being able to have revenue.

    How do you get revenue without raising tax rates? Well, you mess around with the tax code. There are lots of loopholes and special favors and tax expenditures in the tax code.

    If you close those up, especially at the top end of the income brackets, you can get a lot of money for the federal government without saying you raised taxes and without having it show up in the margins on the tax rates. That might be important to a lot of politicians.


    You mean, in other words, you may not get as much as — the president right now is talking about $1.6 trillion in tax increases.




    But you could — you could get some of it.

    But talk to us, Todd Zwillich, about the timing here. They're in session three more days this week, as we just mentioned, three weeks after this. Is that enough time to get this done?


    Anybody could pull a rabbit out of a hat and say we had a basis of some agreements because we have done this debate before. We have had these Biden talks. We have had the super committee. We have a basis that we can talk on.

    So, it's possible they reach a grand bargain. It's not likely to reach a big deal that would include, at Republicans' insistence, curbs on Medicare spending, Social Security, major political third rails, not to mention tax rates and a bunch of other sundry items that we haven't talked about, big money things that sort of lurk in the tax code and sort of behind our politics.

    It's unlikely they get all of that. But they really, really want to avoid the defense sequester, that $109 billion that gets cut right away allotted from defense and from domestic spending.

    What they could do and what might be a little bit more likely if they can't pull the rabbit out of the hat, Congress makes the laws. They can do something smaller.

    They can do a smaller deal that plugs that defense sequester, gets them past Jan. 1 to say defense won't be cut drastically. And here's the parameters of a bigger deal that we will do next year. They could do that too.


    So, they would go over the cliff, but it wouldn't — they would have a parachute?


    In a way. And the cliff itself, I want to say, is a little bit misleading. I think the idea of a fiscal cliff, the imagery of it is scary. It does serve politicians who have a sense of urgency. And it's not to say it's not serious. It's really a slope.

    One doesn't fall off it into an abyss where the markets tank and the dome pops off the Capitol. It's really a slope. It's not a good thing. Nobody wants it.

    But even if they do go past the so-called cliff and tax rates do go up, keep in mind, Congress, if they were to get a deal shortly after that, it wouldn't affect tax rates in 2012 or taxes now. Those end on Dec. 31.

    If they got a deal early-ish in the year, after Jan. 1, that would be retroactive, from the standpoint of taxpayers, fixed.


    Well, that's somewhat reassuring, to know that it's a slope and not a cliff. We can continue discussing the geography later.

    Todd Zwillich, thanks very much.


    My pleasure.

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