* Democrats indicate they're open to 'means-testing'
* Republicans seek distance from 'no new taxes' pledge
* Senator Corker urges 'political courage' for bigger deal
* Baucus wants to extend estate tax break, wind credit
By Jason Lange
WASHINGTON, Nov 25 U.S. lawmakers have made
little progress in the past 10 days toward a compromise to avoid
the harsh tax increases and government spending cuts scheduled
for Jan. 1, a senior Democratic senator said on Sunday.
The United States is on course to slash its budget deficit
nearly in half next year. Closing the gap that quickly, which in
Washington is referred to as going over a "fiscal cliff," could
easily trigger a recession.
"Unfortunately, for the last 10 days, with the House and
Congress gone for the Thanksgiving recess ... much progress
hasn't been made," Dick Durbin, the No. 2 Senate Democrat, told
ABC's "This Week" program.
Serious negotiations are expected to resume this week.
Democratic and Republican lawmakers have been trying to convince
the public - and financial markets - that they are willing to
compromise and can reach a deal before the end of the year.
Durbin indicated Democrats might accept a reform of the
government's Medicare health insurance program for the elderly
that would make higher-income seniors pay more for their care.
Democrats traditionally oppose limiting Medicare benefits
according to income, a practice known as "means testing." Durbin
said Medicaid, a public health insurance program for the poor,
also could be overhauled.
But Durbin said Social Security, the federal government
pension program, needs only small tweaks to ensure long-term
solvency rather than major reforms.
A deadline looms over the talks. Without action by lawmakers
and President Barack Obama, roughly $600 billion in tax
increases and spending cuts will start to hit households and
companies in early January.
'TEST OF POLITICAL COURAGE'
Republicans are averse to Democrats' plan to raise income
tax rates on the wealthiest Americans, which Republicans say
would hurt job creation.
Republicans also want to cut spending on social programs
more than Democrats say they will accept.
House Speaker John Boehner has called for a short-term plan
to avert the fiscal cliff to pave the way for Congress and the
White House to agree to work during 2013 on comprehensive tax
reform and longer-term spending cuts.
But Republican Senator Bob Corker said both sides need to
show "political courage" and reach a bigger $4 trillion deficit
reduction deal that includes both increases in revenues and cuts
in spending by the end of the year.
"Kicking the can down the road - setting up a process for
token deficit reduction today with the promise of more reforms
later - is misguided and irresponsible and shows a total lack of
courage," Corker wrote in an editorial in the Washington Post.
A growing group of Republican lawmakers are loosening their
ties to Grover Norquist, the anti-tax activist famous for
getting elected officials to sign a pledge that they will vote
against any tax increases.
Republican Senator Lindsey Graham said Republicans will
allow tax revenues to rise as long as social spending programs
are reformed. "I will violate the pledge - long story short -
for the good of the country, only if Democrats will do
entitlement reform," he told "This Week."
Graham said he supported boosting revenues by closing tax
loopholes rather than by raising tax rates.
Republican Senator Saxby Chambliss said last week he "cared
more about the country" than a 20-year-old pledge. On Sunday,
Republican Representative Peter King, chairman of the House
Homeland Security Committee, told NBC's "Meet the Press" he
agreed with Chambliss.
While income tax breaks have attracted the most scrutiny,
lawmakers also need to come to terms on a host of other tax
incentives that are set to expire at the end of the year,
including an estate tax break.
Senator Max Baucus, the chairman of the Senate Finance
Committee and a key player in fiscal cliff talks, told a
newspaper in his home state of Montana that he wants to preserve
the estate tax break, which is important for farmers who want to
pass down land worth millions of dollars to their children.
Baucus also said he hopes to preserve the production tax
credit for wind energy, he told the Great Falls Tribune.