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December 31, 2012

UPDATE: Progress seen in last-minute 'fiscal cliff' talks

Washington — Working against a midnight deadline, negotiators for the White House and congressional Republicans narrowed their differences Monday on legislation to avert across-the-board tax increases.

Congressional officials familiar with talks between Vice President Joe Biden and Senate Republican leader Mitch McConnell said one major remaining sticking point was whether to postpone spending cuts that are scheduled to begin on Jan 1.

Republicans want to replace across-the-board reductions with targeted cuts elsewhere in the budget, while the White House and Democrats want to offset at least some of the so-called sequester with the revenue from tax increases. Senate Democrats were pushing hard against a GOP proposal for just a three-month delay in the across-the-board cuts.

At the same time, Democrats said the two sides were closing in on an agreement over taxes. They said the White House had proposed blocking an increase for most Americans, while letting rates rise for individuals with incomes of $400,000 a year and $450,000 for couples, a concession from President Barack Obama's campaign call to set the levels at $200,000 and $250,000.

Any overall deal was also likely to include a provision to prevent a spike in milk prices with the new year, extend unemployment benefits due to expire and protect doctors who treat Medicare patients from a 27 percent cut in fees.

Despite the movement, Senate Majority Leader Harry Reid warned that differences remained without spelling out what they were and said cooperation would be needed by both sides.

"Negotiations are continuing as I speak," said Reid, D-Nev., as the Senate began an unusual New Year's Eve session. "But we really are running out of time. Americans are still threatened with a tax hike in just a few hours."

 

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