More standstill, less progress on "fiscal cliff"
The phone call was relatively brief and substantive, but details remain elusive. It was shorter, sources said, than last week's 28-minute conversation described then as curt, direct and frank. No one familiar with the more recent call used such barbed words. It also occurred before Treasury Secretary Timothy Geithner laid down the harsh "fiscal cliff" marker in an interview on CNBC, where he said the administration is "absolutely" prepared to go over the "cliff."
"Again, there's no prospect in an agreement that doesn't involve the rates going up on the top 2 percent of the wealthiest of Americans," Geithner said.
That danger was not enough to keep Congress in session. It has already gone home for the week as most lawmakers assume, correctly, they are bit players until there's a deal.
And a deal looks a bit more complicated after President Obama, in a meeting with leaders of some of the country's largest corporations, demanded Republicans raise the debt ceiling this month without any spending cut strings attached.
"If Congress in any way suggests that they're going to tie negotiations to debt ceiling votes and take us to the brink of default once again? As part of a budget negotiation? I will not play that game. Because we've got to break that habit before it starts," the he said.
But Republicans say they will not increase the debt ceiling. It is now worth $16 trillion and due to expire in February. Senate Republican Leader Mitch McConnell, R-Ky., is demanding deficit reduction.
"History shows that the only major deficit cutting deals we ever do around here, ever, come after debates over the debt ceiling. It may be a good idea if you don't care about the debt, but it's a non-starter for those of us who do," he said.
CBS News' Rebecca Jarvis broke down the math of the federal budget and the "fiscal cliff" talks, Thursday on "CBS This Morning." She said that if Congress agrees to increase taxes on incomes above $250,000, the federal government would reduce the $16 trillion debt by $700 billion over ten years.
As Republicans insist that spending cuts must be part of the deal, Jarvis points out that about 60 percent of the budget consists of entitlement programs like Social Security, Medicare and Medicaid. The rest of federal spending goes toward defense, which makes up 20 percent of the budget, discretionary spending at 13 percent and 7 percent is interest on the debt.
As for cost savings in Medicare, raising the eligibility age from 65 to 67 would save $250 billion. Another proposal, making providers pay a bit more for coverage, also known as cost sharing, would save $350 billion over ten years.
Business executives are pushing Congress and the White House to come to an agreement that saves $4 trillion over ten years.
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