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From NPR News, this is ALL THINGS CONSIDERED. I'm Robert Siegel.
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And I'm Audie Cornish. There's good news and bad news on the so-called "fiscal cliff," just hours before the nation is set to slide over it. The good news is that top negotiators for the Senate and the White House are by all accounts this close to a deal. The deal would prevent a major income tax hike for most Americans. That starts tomorrow.
But now for the bad news. The proposal may not be able to win approval in either the Senate or the House. Joining me to explain all this is NPR's Julie Rovner, who's just back from the capital. Welcome, Julie and happy News Year's Eve.
JULIE ROVNER, BYLINE: Thank you. Happy New Year's Eve to you.
CORNISH: So let's start with this deal that seems to be taking shape. What do you know about it?
ROVNER: Well, you know how President Obama campaigned on raising taxes for people he called wealthy, which he defined as households earning more than $250,000 a year? Now that's apparently up to $450,000 a year. So this deal would keep the ten-year-old Bush tax rates in place for all income below that threshold, but go back to Clinton-era tax rates for all income over that amount.
Now the other big category of fiscal cliff consequences is a big package of spending cuts called the sequester. This deal would not fully cancel the sequester but it would delay it apparently for about two months. Republicans, however, are insisting that the cost of those cuts be made up elsewhere. And that part hasn't quite been settled yet.
CORNISH: At the same time, we keep hearing that the Senate is planning to vote tonight, even though the House is adjourned until tomorrow. So is that true?
ROVNER: Well, after a lengthy meeting of Republican senators, they came out saying that they hoped they could vote tonight. But it became clear pretty fast that the entire deal's not quite done. Here's how outgoing Texas Republican Senator Kay Bailey Hutchison described it after a meeting of Senate Republicans.
SENATOR KAY BAILEY HUTCHISON: Everything's not put together and the Democrats have to also meet. And, you know, no one is going to say this is wonderful.
CORNISH: So what is the hold-up?
ROVNER: Well, apparently on the Senate side the Democrats are unhappy with putting off the sequester, those big spending cuts, for just two months. That would bring back this entire fight right about when Congress has to vote again to raise the debt ceiling, which is what got the U.S. credit rating dinged the last time there was an epic budget fight back in August of 2011.
On the other hand, Republicans in the House don't want to put off the spending cuts at all. They say the package, as it seems to be shaping up, raises taxes but doesn't do enough to cut spending. Here's how Arizona Republican congressman, and in just a few days senator, Jeff Flake put it.
REPRESENTATIVE JEFF FLAKE: Turning off the sequester is a problem, a big problem for me and a lot of people.
CORNISH: I feel almost silly for asking this but why all the posturing?
ROVNER: Well, this is an age-old game often played on Capitol Hill called "don't let the dead cat end up on your doorstep." No one wants to end up getting the blame for letting the nation go over the fiscal cliff. So each party in each house of Congress wants to make it appear that someone else is gumming up the works. The problem is that at some point it just gets too late to do anything. The legislative process can only move so fast.
ROVNER: And what happens if this drags over into tomorrow?
CORNISH: Well, nothing actually. Tomorrow is sort of a free day since it's a federal holiday and the markets are closed. The real question is what happens if it drags over into Wednesday or beyond. Remember, Thursday is the start of the next Congress. That could really delay things. And at that point people might actually start to feel effects, particularly if the stock market has a big reaction.
ROVNER: Well, we'll have to wait and see what happens next. Julie, thank you so much for talking with us.
CORNISH: Thank you.
ROVNER: That's NPR's Julie Rovner. Transcript provided by NPR, Copyright NPR.