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            Leaders in Washington Still Divided Over 'Fiscal Cliff'

   by VOA News

   U.S. leaders remain divided over contentious year-end financial issues
   even as the House of Representatives gets set to vote Thursday on a
   Republican plan to retain a tax break for all but the wealthiest of
   American taxpayers.
   The Republican leader of the House, Speaker John Boehner, is trying to
   win support for extending a tax cut for all American workers except
   those earning more than $1 million a year.  Some of Boehner's
   Republican colleagues oppose his plan, saying they think everyone
   should get the tax cut.
   But in a brief statement Wednesday, Boehner predicted victory.
   "Tomorrow, the House will pass legislation to make permanent tax relief
   for nearly every American -- 99.81 percent of the American people."
   Even if the House approves Boehner's plan, however, leaders in the
   Democratic-controlled Senate said it has no chance in that chamber, and
   President Barack Obama says he would veto the measure if Congress did
   pass it.
   Obama is calling for extending the tax break only up to the $400,000
   level.  The president says he and Boehner were relatively close to an
   agreement earlier in the week on a compromise to avert what Washington
   is calling a "fiscal cliff," $500 billion in mandated spending cuts and
   tax increases that would affect almost all American workers starting
   January 1.
   The president, a Democrat, said he and Boehner are "several hundred
   billion dollars" apart on reaching a deal, and that his Republican
   opponents in Congress should "take the deal."
   Mark Vitner, the senior economist at Wells Fargo bank, said in an
   interview with VOA that both sides are engaging in "political theater,"
   but that a compromise is likely to end up closer to the president's
   position.
   "The president won in November, so I think we'll see the ultimate
   solution is going to be closer to $400,000 than $1 million," said
   Vitner. "I think that's what the compromise will be. It will probably
   be a half a million."
   After several negotiating sessions with Boehner, the president reduced
   his demand for more taxes over the next decade from $1.4 trillion to
   $1.2 trillion.  He also says he would agree to a Republican call to
   curb spending for government pensions for retired workers by changing
   the way annual increases in the payments are calculated.
   Vitner said he thinks the broad outlines of a deal will be completed
   around Christmas, next Tuesday, but not voted on until a day or two
   after the new year.  That way, he said, Republican lawmakers will be
   able to vote to cut taxes that had gone up as the calendar turned to
   2013.
   The economist says the United States might go over the fiscal cliff,
   but not in a significant way. "Technically we're going to go over the
   fiscal cliff...I just don't see us bungee jumping over the fiscal
   cliff."
   Even as they appeared to move closer to an agreement, the problem for
   both Obama and Boehner is whether they can convince their political
   colleagues to support a compromise.  In the United States, Democrats
   have adamantly opposed any changes in Social Security, the pension plan
   for retirees, while Republicans have steadfastly stood against tax
   increases.
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References

   1. http://www.voanews.com/content/leaders-in-washington-still-divided-over-fiscal-cliff/1569014.html