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Kyl sees grand bargain steering economy away from fiscal cliff


TAMPA, Fla. — Congress has a unique opportunity to strike a broad deficit deal following the November elections, according to Sen. Jon Kyl (R-Ariz.).The Senate minority whip, who is retiring at the end of 2012, said Monday that given the divided Congress, both parties could engage in some “political jujitsu,” offering each other political cover if they could find a way to come together on a grand bargain.”If you have a divided government, parties can get together to do things and then neither party gets blamed for the result,” he said on a breakfast panel hosted by The Hill and sponsored by Holland & Knight. “There is an opportunity right now that is unique, if we will seize it.”Many predict the lame-duck session will be a busy one for the 112th Congress, given that a combination of automatic spending cuts and expirations of lower tax rates are set to take effect at the beginning of 2013. That “fiscal cliff” is viewed as an imminent threat to the U.S. economy, as many analyses have predicted allowing all those policies to take effect would push the nation back into a recession.

However, the contentious 112th Congress has struggled to come up with any broad agreements, leading many to expect that members will end up “punting” on a deal, striking a temporary agreement to extend existing policies and pushing the broader debate into 2013.

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Regardless of who wins in November, Kyl said Congress could come together in the lame duck and strike a deal, and the divided nature of Congress could provide political cover to both sides.

“For example … you could conform eligibility to Medicare to the same age limits that we have for Social Security,” he said. “That would save an enormous amount of money in the future and if we did that neither party would be able to point the finger towards the other party.”

Vin Weber, a former congressman and Romney adviser, also said the lame duck provided an opportunity, because he did not expect political tensions to abate in 2013.

“It’s almost always an election year in America,” he said. “It scares me to think that we would wait unit next year to try and solve this problem.”

While Kyl struck a note of hope for bipartisan cooperation, it was evident that there are still substantial political challenges lying in the way. Sen. Patty Murray (D-Wash.) recently suggested that if Congress could not reach a deal on the tax rates at the end of 2012, Democrats would be willing to let the Bush tax rates expire at the end of the year, then retroactively lower them in 2013 for all but the top two tax brackets. Kyl called that tactic “political cynicism writ large.”

This post updated on Aug. 28 at 3:05 pm.