Did we really expect anything to come of this? Lawmakers have made little progress in the past 10 days toward a compromise to avoid the harsh tax increases and government spending cuts scheduled for January 1, a senior Democratic senator said on Sunday.
The US is on course to slash its budget deficit nearly in half next year. Closing the gap that quickly, which in Washington is referred to as going over a “fiscal cliff,” could easily trigger a recession.
“Unfortunately, for the last 10 days, with the House and Congress gone for the Thanksgiving recess … much progress hasn’t been made,” Dick Durbin, the No. 2 Senate Democrat, told ABC’s “This Week” program.
Both parties have been trying to convince the public and financial markets that they are willing to compromise and can reach a deal before the end of the year.
Durbin did indicate that possibly Democrats might accept a reform of the government’s Medicare health insurance program for the elderly that would make higher-income seniors pay more for their care.
Traditionally, Democrats opposed limiting Medicare benefits according to income, a practice known as “means testing.” Durbin said Medicaid, a public health insurance program for the poor, also could be overhauled.
“We can make meaningful reforms in Medicare and Medicaid without compromising the integrity of the program, making sure that the beneficiaries are not paying the price for it, except perhaps the high-income beneficiaries,” Durbin said.
Without action by lawmakers and President Barack Obama, roughly $600 billion in tax increases and spending cuts will start to hit households and companies in early January. Both parties are at an impasse over Obama’s wish to raise income tax rates on the wealthiest Americans, which Republicans say would hurt job creation.
And Republicans want to cut spending on social programs more than Democrats say they will accept. Durbin said the Democrats’ will for substantial entitlement reform did not extend to Social Security, the federal government pension program, which he
said only needs small tweaks to ensure long-term solvency.