WASHINGTON — With both sides having reached an agreement on tax rates in the “fiscal cliff” negotiations, the hold-up is now what to do about the sequester, a senior Republican aide told The Daily Caller.
The White House, Senate Democrats and Republicans each have different proposals.
Though both President Barack Obama and Senate Minority Leader Mitch McConnell said Monday the two sides were “very, very close” to a deal, the sequester is still a point of contention.
“The Senate Democrats are telling the White House that they want to basically turn off the sequester for a year, and we’re saying that’s completely unacceptable,” the aide said. The White House plan, the aide said, would push off the sequester for three months.
But Republicans, the aide said, will not “agree to any delay in the sequester without corresponding spending cuts.”
Ideally, an agreement on that would be part of the deal negotiators reach tonight, but if not, McConnell urged the Senate in a floor speech to pass the deal to extend tax cuts, and at least get that out of the way.
The tax agreement would extend the current tax rates for individuals making less than $400,000 a year and joint-filers making less than $450,000 a year. It would extend some of the tax cuts on capital gains and dividends, and it would also keep the $5 million exemption for the estate tax, and add a 40 percent rate — preventing the rate from jumping to 55 percent. It also includes a “permanent patch” that will keep the Alternative Minimum Tax from affecting middle class taxpayers.
The aide acknowledged that these are “not the tax hikes we would have designed,” but noted that they amounted to “preserving as much of the Bush tax cuts as we possibly could.”
At the moment, things remain “up in the air,” the aide said. A caucus meeting scheduled for 2 p.m. never happened, in part because Obama was delivering a speech, and in part because of the remaining indecision.