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Senate is last hope before fiscal cliff

WASHINGTON — With little more than a week for lawmakers to avert huge tax increases and spending cuts, attention is turning from the gridlocked House to the Senate, where some Republicans on Sunday endorsed President Barack Obama's call for a partial deal to insulate most Americans from the tax increases but defer a resolution on spending.

Sens. Kay Bailey Hutchison, R-Texas, and Johnny Isakson, R-Ga., implored Senate leaders to reach an accommodation with Obama when Congress returns on Thursday, even if that means that taxes would go up for those with high incomes but that spending cuts would be put off.

Hutchison, appearing on the CBS program Face the Nation, said the tax cuts signed into law by President George W. Bush should be extended "at a reasonable salary level."

The failed attempt on Thursday by House Speaker John Boehner, R-Ohio, to attract enough Republican support for a bill to prevent tax hikes on income below $1 million left little chance for a "grand bargain" on deficit reduction.

It also shifted the action to the Senate as the last hope to stop more than a half-trillion dollars in tax increases and across-the-board spending cuts from kicking in on Jan. 1. The president urged senators to take up legislation extending the Bush-era tax cuts on income under $250,000 and preventing the expiration of unemployment benefits, while delaying the defense and domestic spending cuts to allow negotiations on a deficit deal to continue.

"The fact that the House Republicans spent a week wasting time we didn't have has greatly exacerbated the problem," said Dan Pfeiffer, Obama's communications director.

The hope is that the less polarized Senate will be different from the House. It is run by Democrats and includes several Republicans who are openly backing a deal.

"The president's statement is right," Isakson said Sunday on the ABC program This Week. "No one wants taxes to go up on the middle class. I don't want them to go up on anybody, but I'm not in the majority in the United States Senate, and he's the president of the United States."

Democratic leaders say they will move forward on a bill this week only if Sen. Mitch McConnell of Kentucky, the Republican leader, can assure them that it will not be filibustered, and that once it is passed, Boehner will bring it to a vote in the House.

Investors are anticipating a turbulent week in the markets if the White House and Congress continue their standoff. On Friday, the Standard & Poor's 500-stock index fell nearly 1 percent as pessimism mounted over the prospect of a deal being reached.

Senate is last hope before fiscal cliff 12/23/12 [Last modified: Sunday, December 23, 2012 10:59pm]
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