Senators differ on fiscal cliff but hold out hope for deal

 

Two high-profile senators disagreed Sunday on the president's deficit-reduction proposal, just weeks before Congress hits an end-of-the year deadline to avert the so-called fiscal cliff.

Republican Sen. Kelly Ayotte of New Hampshire discounted the plan presented by Treasury Secretary Tim Geithner on Thursday, saying on CNN's "State of the Union" that the proposal was a "rerun" that resembled previous policies President Barack Obama has put forward, yet failed to see through in the Senate.

"It has to happen," she said, referring to the likelihood of Congress reaching a deal. "And I truly hope that it does happen. But I'm really disappointed by the president's initial proposal."

 

The president's plan calls for $1.6 trillion in increased revenue, some of it the result of higher tax rates for families making more than $250,000 a year. Obama also wants to close loopholes, limit deductions, raise the estate tax rate to 2009 levels and increase taxes on capital gains and dividend taxes.

In return, multiple sources told CNN, Obama is offering $400 billion in new cuts to Medicare and other entitlement programs. Specifics on cuts would be decided next year, the sources said.

But Ayotte and other Republicans say the entitlement cuts don't go far enough to make a meaningful dent in closing the nation's sizable deficit. They stress a need for more spending cuts but argue revenue should be increased strictly through tax code reform, including the closing of loopholes and limiting of deductions.

By placing more emphasis on the revenue side, the president is playing politics, Ayotte said.

"The tax rate issue is more of a political trophy than an economic solution," she told CNN Chief Political Correspondent Candy Crowley.

Democratic Sen. Mark Warner of Virginia argued the president's plan was just the first round of negotiations, describing last week's proposal as a "term sheet."

"In any negotiation I've been involved in, you put down the term sheet; the other side comes back and says 'No, I like this part. I don't like this part,'" he said.

Warner, who recently declined a bid to run for another term as governor of Virginia, said he feels confident a deal will take place and agreed any plan must include entitlement cuts. He also praised the president for meeting with business leaders and labor groups in recent weeks, saying Obama is including the American public in the conversation.

But Warner expressed a sense of urgency and said he hoped Congress and the White House "would actually get to those negotiations" soon. While Obama held in-person meetings with congressional leaders on November 16, a second meeting has yet to take place.

"Every day that clicks off, we are hurting the economy as we go into the Christmas retail season," the first-term senator said. "People are probably not buying because they may not know all the details of the cliff, but know bad stuff's going to happen if we don't get our act together and get it done."

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