Senate considers options on fiscal cliff


As congressional leaders prepare to meet Friday morning at the White House to discuss the looming fiscal cliff, much of Washington is focused on the potential for compromise between President Obama and House Speaker John Boehner.

But what if, after two years of trying, that pair still can't get a deal to solve the nation's budget problems? Then there's hope in the Senate, where people in both parties are hard at work on Plan B.

The bipartisan Gang of Six is still at it, drafting legislation based on the recommendations of Obama's fiscal commission, known as Bowles-Simpson. The Senate Finance Committee met Thursday to discuss how to proceed.

And on Wednesday, at the request of Senate Minority Leader Mitch McConnell, R-Ky., several senators offered ideas for various elements of a bargain at the GOP policy lunch, including Patrick Toomey, R-Pa., and Bob Corker, R-Tenn.

Few of the senators would offer details of their plans, saying they don't want to interfere with any agreement that might emerge between the Big Two. But Sen. Lindsey Graham, R-S.C., a longtime champion of a far-reaching debt deal, said the ground for compromise is fertile.

"If Boehner and Obama can come together with a deal that sails through the House, then start in the House," Graham said. But "if you can't get a deal from Boehner-Obama, start in the Senate."

There are pragmatic reasons to pursue a Senate-first approach, chief among them the broad recognition among Republicans in the Senate that any deal must include actual tax increases. Not tax increases through economic growth, as Boehner and his troops keeps saying, but, as Graham said, "real revenue."

Corker, for instance, said he has put together a far-reaching deficit-reduction proposal that tackles all the big budget problems, including the rampant growth in spending on federal health programs and the need for new tax revenues.

"I'm trying to show people how you can get to a really big number really easily," Corker said. "If the meeting Friday is a photo op, it's really depressing. And the most constructive thing those of us who want to solve the problem can do is just to continue working to try to get consensus."

Corker declined to provide details of his plan, but two people familiar with it said it would would raise around $800 billion over the next decade by imposing a $50,000 cap on deductions.

Meanwhile, Toomey, an ardent fiscal conservative, said he had drafted a proposal to simplify the tax code that would not raise additional tax revenue. But he added that he remains open to fresh revenues as part of a broader debt-reduction deal.

"Depending on whatever the president might eventually agree he's willing to do to get spending and entitlements under control," Toomey said, "of course, revenues will become part of the discussion."

Sen. John Barasso, R-Wyo., said senators in both parties are "eager to get things done and appalled that we aren't doing anything yet." With hundreds of billions in tax increases and automatic spending cuts set to pound the economic recovery in January, the most effective path forward, Barasso said, would be for Obama to present "a specific plan to deal with the nation's problems."

Democrats argue that Obama has presented such a plan: a version of his most recent budget request that seeks $1.6 trillion in new revenue. On Thursday, White House economic adviser Gene Sperling said a significant deficit reduction package should include "well over" $1 trillion in new revenues, noting that the president's budget calls for $1.65 trillion in new taxes.

Meanwhile, groups from across the political spectrum are descending on Washington to press for solutions. On Thursday, mayors worried about the economic impact of federal budget cuts held meetings on Capitol Hill and at the White House, as did a group calling themselves the "Patriotic Millionaires" who are arguing in favor of raising taxes on the wealthy.

"My belief is that people who have a lot and whose taxes have been reduced is to pay a little more," said Garrett Gruener, a venture capitalist and founder of Ask.Com. "My experience is marginal tax rates do not matter at whole do any of these decisions or any of the decisions I've seen in my firm."

Start your day with The Independent, sign up for daily news emails
house + home
Arts and Entertainment
tvGame of Thrones season 5 ep 4, review - WARNING: contains major spoiliers!
Life and Style
Bats detect and react to wind speed and direction through sensors on their wings
Arts and Entertainment
The Ridiculous Six has been produced by Adam Sandler, who also stars in it
filmNew controversy after nine Native American actors walked off set
Have you tried new the Independent Digital Edition apps?
ebooksA celebration of British elections
Danny Jones was in the Wales squad for the 2013 World Cup
rugby leagueKeighley Cougars half-back was taken off after just four minutes
Life and Style
The original ZX Spectrum was simple to plug into your TV and get playing on
techThirty years on, the ZX Spectrum is back, after a fashion
Tiger Woods and Lindsey Vonn are breaking up after nearly three years together
peopleFormer couple announce separation in posts on their websites
Life and Style
Google celebrates Bartolomeo Cristofori's 360th birthday
techGoogle Doodle to the rescue
Arts and Entertainment
Haunted looks: Matthew Macfadyen and Timothy Spall star in ‘The Enfield Haunting’
tvThe Enfield Haunting, TV review
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Senior Digital Marketing Consultant

£28000 - £45000 per annum: Recruitment Genius: A Senior Digital Marketing Cons...

Recruitment Genius: Assistant Stores Keeper

£16640 - £18500 per annum: Recruitment Genius: An Assistant Stores Keeper is r...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Software Developer - C# / ASP.NET / SQL

£17000 - £30000 per annum: Recruitment Genius: Developer required to join a bu...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Russell Brand's interview with Ed Miliband has got everyone talking about The Trews

Everyone is talking about The Trews

Russell Brand's 'true news' videos attract millions of viewers. But today's 'Milibrand' interview introduced his resolutely amateurish style to a whole new crowd
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living