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Obama Keeps Pressure on Congress to Reach Agreement

President Barack Obama on Sunday sought to ratchet up the pressure on Congress to pass an eleventh hour legislative package to limit the effect of tax increases set to take effect Jan. 1.

“Let’s at minimum make sure that people’s taxes don’t go up and that 2 million people don’t lose their unemployment insurance,” Obama said in a taped interview with David Gregory on NBC’s “Meet the Press.”

Obama has been pushing for extending tax cuts for households making less than $250,000 a year, and allowing them to expire for those making more. The George W. Bush-era law authorizing lower tax rates expires at the end of the year, which means taxes will increase for all taxpayers on Jan. 1 unless Congress acts and the president signs a new bill into law.

The president’s proposal would keep the cuts for 98 percent of taxpayers, Democrats have argued. But recent discussions have included the possibility of setting the threshold higher, perhaps at $400,000 to $500,000.

Senate Majority Leader Harry Reid, D-Nev., and Senate Minority Leader Mitch McConnell, R-Ky., are working on a proposal that they hope can win enough bipartisan support to get through the Democratic-led Senate and the Republican-controlled House.

Obama said he was “modestly optimistic” after meeting with congressional leaders on Friday.

“But we don’t yet see an agreement, and now the pressure is on Congress to produce,” Obama said.

Both McConnell and Speaker John A. Boehner, R-Ohio, reacted sharply to Obama’s comments, characterizing them as casting blame on the GOP.

“While the president was taping those discordant remarks yesterday, Sen. McConnell was in the office working to bring Republicans and Democrats together on a solution,” said McConnell spokesman Don Stewart in an email. “Discussions continue today.”

Boehner said in a statement that “Americans elected President Obama to lead, not cast blame. The president’s comments today are ironic, as a recurring theme of our negotiations was his unwillingness to agree to anything that would require him to stand up to his own party.”

Absent an agreement that would clear both chambers, the president has asked for Senate and House votes on his proposal extending the tax cuts for households making less than $250,000 a year.

“What I’ve said is that in the Senate, we should go ahead and introduce legislation that would make sure middle class taxes stay where they are, and there should be an up or down vote,” Obama said. “Everybody should have a right to vote on that. You know, if Republicans don’t like it, they can vote no. But I actually think that there’s a majority of support for making sure that middle-class families are protected.”

Obama said there would likely be an economic price to pay if Congress fails to act. “I think business and investors are going to feel more negative about the economy next year,” the president said.

Given the disagreement over taxes, Obama said it’s unclear if a package to address the $110 billion in automatic spending cuts, known as sequestration, can be passed before the cuts go into effect on Jan. 2.

“So far at least, Congress has not been able to get this stuff done,” Obama said when asked about sequestration. “Not because Democrats in Congress don’t want to go ahead and cooperate, but because I think it’s been very hard for Speaker Boehner and Republican Leader McConnell to accept the fact that taxes on the wealthiest Americans should go up a little bit as part of an overall deficit reduction package.”

Obama said he will continue to push for a balanced deficit reduction plan next year that focuses on bolstering the middle class and building up the nation’s crumbling infrastructure.

He also said he intends to push for immigration reform and energy legislation.

Senators’ Outlook

Sen. Lindsey Graham, R-S.C., who appeared on Fox News, said chances are “exceedingly good” that a deal will be reached. “I think people don’t want to go over the cliff, if we can avoid it,” he said.

But Graham stressed that the package will do little to reduce the deficit.

“What have we accomplished? Political victory for president. … He’s going get tax rate increases, maybe not at $250,000, but on upper-income Americans. And the sad news for the country is that we have accomplished very little in terms of not becoming Greece or getting out of debt; this deal wont affect the debt situation,” he said.

Graham warned that Republicans are looking at the debt ceiling as the next front of the battle over the deficit.

“I hope we’ll have the courage of our convictions when it comes time to raise the debt ceiling to fight for what we believe as Republicans,” the South Carolina senator said, adding that he wants significant entitlement reform.

Graham said he believes McConnell will to get at least 60 percent of the 47 Republican votes in the Senate to provide enough political cover for House Republicans to vote for the package.

“If McConnell can’t get 60 percent of us to vote for the deal, it will be hard for Boehner to get it through the House. And I want to vote for it even though I don’t like it because the country has a lot at stake here,” he said.

Others members appearing on the Sunday morning talks shows were also cautiously optimistic.

“There are certainly no breakthroughs yet … but there’s a real possibility of a deal,” said Sen. Charles E. Schumer of New York, the No. 3 Democratic leader, of the talks between Reid and McConnell. Schumer appeared on ABC’s “This Week.”

“On these big, big agreements, they almost always happen at the last minute. Neither side likes to give up its position,” Schumer said. “They eyeball each other until the very end, but then each side, realizing that the alternative is worse, comes to an agreement.”

Sen. Jon Kyl of Arizona, the assistant Republican leader who appeared on the show with Schumer, also alluded to the fear factor. “If we are not able to reach an agreement, it will be dire,” Kyl said.

Schumer said there’s general agreement on reviving and extending some lapsed and expiring tax code provisions other than the rates, including patching the alternative minimum tax to blunt its impact on middle-income taxpayers.

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