WASHINGTON Dec 11 As the pace of talks
quickened to avert the "fiscal cliff" of steep tax hikes and
spending cuts set for the end of the year, senior members of the
U.S. House of Representatives of both parties cautioned that an
agreement on all the outstanding issues remained uncertain.
Republicans and Democrats are not close to "finishing
anything," California Representative Kevin McCarthy, the
Republican whip in the House, told Fox News Monday night.
"There's nothing agreed to. They are just beginning to
talk," he said of House Speaker John Boehner and President
Meanwhile, Representative Chris Van Hollen of Maryland, the
top Democrat on the House Budget Committee, said on MSNBC Monday
he thought Congress could resolve some of the issues by the Dec.
31 deadline -- among them the hikes in tax rates-but might have
to leave others for the new Congress that takes office in
The two major elements of the so-called cliff are automatic
spending reductions set to occur starting Jan. 1 and tax cuts
that expire at the end of the year. Democrats, including Obama,
want the reduced taxes extended for all but the highest earners,
while Republicans want them continued for all brackets.
Also in the mix is a payroll tax "holiday" set to expire,
which, if not extended, will could quickly reduce the take-home
pay of a large segment of the U.S. workforce.
The holiday, now in its second year, has been providing
workers with an average of about $1,000 a year in extra cash.
Significant divisions reamain on the payroll tax question in
part because it funds the Social Security retirement program.
The payroll tax, dedicated to financing Social Security, is
paid by employers and employees at a rate of 6.2 percent of
wages up to a maximum of $110,110. The holiday, enacted in 2010,
reduced the rate by 2 percentage points on the portion paid by
Van Hollen said Republicans were coming around on the tax
hikes, and said there was a good chance of resolving that soon.
Other things might have to wait, he said, mentioning the
budget cuts, or "sequestration," and the payroll tax.
If not complete by Jan. 1, he said, "my belief is you would
get it done very soon" after the New Year, noting that the
government has some flexibility on withholding taxes that could
limit the immediate hit to taxpayers while negotiations
continued into 2013.
There were no travel plans Tuesday on the public schedule of
President Barack Obama, which observers on Capitol Hill hoped
signaled more negotiations.