By Vicki Needham, Bernie Becker and Peter Schroeder - 11/26/12 11:30 PM EST
The White House started the week with a report on Monday morning arguing that failing to extend tax cuts for the middle class would reduce consumer spending by $200 billion.
Senate Assistant Majority Leader Dick Durbin (D-Ill.), will make a case on Tuesday for lawmakers to reach a bipartisan fiscal cliff deal. Durbin will discuss why deficit reduction can and should be a progressive cause and lay out a fair plan to shrink the deficit, grow the economy and protect the middle class and our nation’s most vulnerable during a speech at the Center for American Progress.
“As we’ve seen in recent days, the American people support an approach that involves both major spending cuts and additional revenue via tax reform with lower tax rates," Boehner said in a statement.
A few years ago, House Republicans opposed the plan crafted by Bowles and former Sen. Alan Simpson (R-Wyo.) that called for more than $1 trillion in tax increases. Boehner’s office said Monday that Bowles also had his own plan, which he talked about last year during the supercommittee meetings that failed to produce a grand bargain.
House Majority Leader Eric Cantor (R-Va.) on Monday said Republicans are open to including new revenues in a deficit-reduction plan.
Although a deal remains distant, the shift on revenues has been welcomed by Democrats.
Since Boehner said he backed the idea, Republicans have come out in support — Sens. Saxby Chambliss (R-Ga.) and Lindsey Graham (R-S.C.) have publicly broken their no-tax pledge with conservative activist Grover Norquist.
Billionaire investor Warren Buffett got in on the act on Monday, too, calling for the Bush-era tax cuts to expire for those making more than $500,000 a year.
Buffett reiterated his support for the president’s proposal to have the wealthy pay a greater share in an op-ed published Monday in The New York Times.
"I support President Obama’s proposal to eliminate the Bush tax cuts for high-income taxpayers. However, I prefer a cutoff point somewhat above $250,000 — maybe $500,000 or so," he wrote.
Obama has proposed allowing the Bush-era rates to expire for incomes above $250,000 a year.
Efforts to reach a deficit deal in the 2011 talks over raising the debt limit faltered after Republicans rejected measures to raise new revenues, setting up the fiscal cliff. But with lawmakers headed back to Washington to start new negotiations on a deficit-reduction package to avoid the cliff, a number of Republicans have signaled a readiness to accept new revenues, if Democrats bring entitlement reform to the table.
Senate Minority Leader Mitch McConnell (R-Ky.) on Monday said talks are at an “impasse” and only Obama can get discussions flowing.
McConnell said he's willing to give on taxes but wants to see movement from Democrats on spending cuts.
“It’s time for the president to present a plan that rises above these reckless and radical voices on the hard left, that goes beyond the talking points of the campaign trail, and that has a realistic chance of passing the Congress,” he said.
Meanwhile, Senate Majority Leader Harry Reid (D-Nev.) used his first floor address to urge the House GOP to pass a bill just extending current tax rates for the middle class.
With tax and spending issues hanging in the balance, Wall Street acted accordingly, making a retreat after the long Thanksgiving weekend.
The Dow Jones industrial average fell 42.31 points to 12,967.37, while the Standard & Poor's 500 index fell 2.86 to 1,406.29 and the Nasdaq popped up 9.93 points to 2,976.78.
WHAT ELSE TO WATCH FOR
Economic challenge: Federal Reserve Chairman Ben Bernanke will welcome college students to this year's National College Fed Challenge finals, where teams compete by researching and analyzing economic data and then developing a forecast for monetary policy for the central bank. The students work under time limits and then are questioned by a panel of economists, bankers and financial analysts and academics. Teams play the role of members of the Federal Open Market Committee.
Estate tax examination: Senate Finance Committee Chairman Max Baucus (D-Mont.) wants to keep the current estate tax parameters in place, his staff says.
"Senator Baucus is working to protect Montana’s family farmers and ranchers who pass their properties on to their children and future generations," a committee staffer told The Hill. "He supports the most estate tax relief he can get for these Montana families, which — right now — would be 2012 law."
The statements come as Baucus is looking to play a central role in talks over the so-called "fiscal cliff" — discussions that will include what to do over the estate tax — and as the Montana Democrat ramps up his efforts to win a seventh term in a state that just voted for Mitt Romney.
The Great Falls Tribune first reported that Baucus wanted to keep the current estate tax parameters, which include a $5 million exemption and a 35 percent top rate.
Without congressional action, the estate tax exemption will fall to $1 million, and the top rate will rise to 55 percent, ensnaring thousands more families. The White House has called for a top rate of 45 percent, and a $3.5 million exemption.
But Senate Democrats left the estate tax out of their measure this year to extend most Bush-era tax rates, a move that suggested the party isn't unified on how to proceed on the estate tax. Other Democrats from more conservative states, like Sens. Claire McCaskill (Mo.), Mark Pryor (Ark.) and Jon Tester (Mont.), have also pressed for extending current estate tax policy.
To the limit: While Washington is embroiled in that pesky "fiscal cliff," the folks at the Bipartisan Policy Center are already eyeballing the next threat over the horizon: the debt limit. Experts at the center will be updating their analysis of the debt limit tomorrow, and making the case for how it could have effect the ongoing fiscal cliff talks. The Treasury Department currently estimates that the $16.4 trillion ceiling will need a boost by early 2013.
Schapiro leaving the SEC: Mary Schapiro announced Monday that she’ll step down as chairwoman of the Securities and Exchange Commission on Dec. 14.
Schapiro’s exit marks the departure of a top Obama administration financial deputy who played an integral role in steering the financial system following the meltdown of 2008, and begins what is expected to be a significant shake-up of the president’s economic team.
House Minority Leader Nancy Pelosi (D-Calif.) called Schapiro's work over her four years leading the agency in the aftermath of one of the nation's worst financial crises "exemplary."
"Assuming her post in the aftermath of the worst financial crisis since the Great Depression, she acted swiftly and effectively to restore confidence in our financial markets, strengthen oversight of our financial system, and protect investors from the recklessness of some on Wall Street," she said.
Durable goods: The Commerce Department releases its October report that measures the dollar volume of orders, shipments and unfilled orders of durable goods — goods intended to last three or more years. Orders are considered a leading indicator of manufacturing activity, and the market often moves on this report despite the volatility and large revisions that make it a less than perfect indicator.
S&P/Case-Shiller 20-City Index: The housing price index will release a report on the nation's 20 largest metropolitan areas for the month of September.
Consumer Confidence: The Conference Board will release its monthly report on confidence; the report can be helpful in predicting shifts in consumer spending.
FHFA Housing Price Index: The Federal Housing Finance Agency will release its measure of prices for September on single-family homes.
WHAT YOU MIGHT HAVE MISSED
— Chamber meets White House on 'fiscal cliff,' seeks easing of energy rules
— Credit unions seeking expansion of business lending
— CFTC accuses Intrade of allowing unauthorized trades
— Norquist: GOP won't break tax pledge
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