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Durbin: 'Fiscal cliff' can be averted

Nov. 27, 2012 at 5:32 PM   |   Comments

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WASHINGTON, Nov. 27 (UPI) -- U.S. Sen. Dick Durbin Tuesday said he is confident Democrats and Republicans can avert the so-called fiscal cliff since they agree on so many issues.

In a speech at the Center for American Progress in Washington, Durbin said both sides agree on the need for more jobs and lower deficits, that the U.S. economy should remain the strongest in the world and that our children should "inherit a future filled with prosperity and opportunity, not deficits and debts."

"Congress has less than a month to find ... a compromise so that we can avoid the looming 'fiscal cliff' and keep our economy growing," Durbin said.

"I believe we can meet that deadline and we can then build on that success to reach a deficit reduction agreement that protects the middle class and the most vulnerable and promotes economic growth for everyone."

Unless Congress acts, the George W. Bush-era tax cuts expire Dec. 31 and deep cuts in defense spending kick in. President Obama advocates raising taxes on those earning more than $250,000 a year and eliminating some deductions. Republicans reject raising taxes but have said they are open to closing loopholes in the tax code as well as slashing discretionary spending.

Durbin said the country can't just cut spending without keeping protections for the poor in place. He chastised House Republicans for passing budgets that slash safety net programs.

"Let me be clear: Those cuts will not happen. Before we demand greater sacrifices of those who can least afford it, we need to ask the wealthiest among us to pay their fair share," Durbin said.

Durbin said Democrats are not willing to repeal the Affordable Care Act or critical safeguards, won't allow special interest groups to use deficit reduction to gut protections for workers, the economy or the environment, won't abandon entitlement programs, won't privatize Social Security, won't turn Medicare into a voucher plan and won't turn Medicaid into a block grant program.

Durbin said, however, both Social Security and Medicare need tweaks to make them solvent for years to come -- a job that will be easier the sooner the changes are made. But, he cautioned, those discussions don't belong as part of the "fiscal cliff" talks.

Obama Tuesday met with 15 small business owners to discuss tax policy.

"Large and growing budget cuts have had a severe impact on business, particularly micro and small business and job creation -- reducing funding for infrastructure improvements, community economic development programs, housing, job training and much more," American Sustainable Business Council and Business for Shared Prosperity said in a letter to Congress. "America's failing infrastructure is starved of funds and falling further behind our global competitors. ... The high-end tax cuts are hurting our economy. It's time to end them, not extend them. This would be an important step in rebuilding an economy that grows our small businesses and middle class."

White House spokesman Jay Carney told reporters Obama has no meetings scheduled with congressional leaders but is open to talks. He said Treasury Secretary Timothy Geithner is leading discussions on Capitol Hill.

Obama telephoned House Speaker John Boehner, R-Ohio, and Senate Majority Leader Harry Reid, D-Nev., during the weekend, officials said, and top Republicans are to meet Wednesday with Erskine Bowles, a Clinton administration chief of staff who was the Democratic co-chairman of Obama's 2010 deficit-reduction panel.

After the commission's recommendations failed to garner enough support, Bowles and the panel's Republican co-chairman, former Sen. Alan Simpson of Wyoming, started the group Campaign to Fix the Debt.

That group offered a debt-reduction plan last fall in line with Republican principles, GOP aides say. The plan called for $800 billion in new revenue by overhauling the tax code and making significant spending cuts, including big changes to Medicare and other government health programs.

"People in both parties agree we need a 'balanced approach' to deal with our deficit and debt and help our economy create jobs," Boehner said in a statement Monday.

"We look forward to talking to Mr. Bowles and other members of the coalition [advocating a debt deal] about their ideas to avert the fiscal cliff without tax hikes that target small businesses and cost jobs."

Democrats said they were encouraged by Boehner's talk of a "balanced approach" -- a phrase used by Obama to refer to tax increases on wealthy individuals as well as spending cuts -- but they said they wanted details of the GOP position.

"We need more specifics. We haven't seen them yet," Senate Finance Committee Chairman Max Baucus, D-Mont., told reporters Monday.

Talks on the deficit began Nov. 16 with a meeting between Obama and congressional leaders at the White House. Boehner left the meeting saying "revenue is on the table" as long as it's accompanied by "significant spending cuts."

Limiting or eliminating tax deductions is one of the options Republicans and Democrats are considering to generate revenue, aides of both parties say.

Diminishing or ending the mortgage-interest tax break, especially for high-income taxpayers, is likely to be included in that discussion, The New York Times said of the deduction long seen as untouchable.

The National Association of Realtors has strongly opposed eliminating the mortgage-interest deduction, saying it "could endanger property values."

Association President Gary Thomas told the Times in an email Monday, "It has always been the NAR's position that the mortgage interest deduction is vital to the stability of the American housing market and economy, and we will remain vigilant in opposing any future plan that modifies or excludes the deductibility of mortgage interest."

The conservative Tax Foundation says economists are "basically united in their opposition" to the deduction. It says giving a tax subsidy to housing skews investment toward houses and away from factories, equipment and other assets it says are more productive.

Households saved $83 billion they would have paid in taxes in 2010 with the mortgage-interest deduction, the libertarian Reason Foundation says. Higher earners realized most of those savings.

© 2012 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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