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Nation/World

December 31, 2012

'Fiscal cliff' negotiations to continue today

WASHINGTON — The White House and congressional leaders worked overtime yesterday to ward off tax increases set to kick in for most Americans, with Republican leaders signaling a grudging acceptance that some taxes will go up and the two parties narrowing their differences over who should pay more.

After a midday stumble, the two sides worked in private, debating a slimmed-down package that would increase taxes for top wage earners — perhaps starting with incomes somewhere between $360,000 and $450,000 — while preserving income tax breaks for tens of millions of other Americans.

“There is still significant distance between the two sides, but negotiations continue,” Senate Majority Leader Harry Reid, D-Nev., said on the Senate floor following a closed-door meeting with fellow Democrats. “There’s still time left to reach an agreement, and we intend to continue negotiations.”

The Senate and House scrapped plans to cast votes last night. They will return today, the last possible day to vote before all of the Bush-era tax cuts expire at the end of the day.

The signs of progress late yesterday came after a day of drama in which talks appeared to hit an impasse, Reid suggested he could not get the White House to sign off on a counteroffer, and Senate Minority Leader Mitch McConnell, R-Ky., made an open appeal to old Senate colleague, Vice President Joe Biden, to help get talks moving again.

The talks between Reid and McConnell had broken down early yesterday over a Republican proposal to curb the growth of benefits under entitlement programs such as Social Security and Medicare. Unable to get a response from Reid, McConnell turned to Biden, who helped broker deals over tax cuts in 2010 and the debt ceiling in 2011. Biden and McConnell spoke more than three times by phone yesterday, aides said. Republicans eventually dropped their proposal for entitlement changes as part of this potential deal.

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