Updated Monday, April 21, 2014 as of 3:23 AM ET
Practice - Regulatory/Compliance
Obama Faces Pressure to Lead on Fiscal Cliff After Victory
by: Kathleen Hunter and Roxana Tiron
Wednesday, November 7, 2012
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Obama wants to boost top income tax rates to the levels they reached when President Bill Clinton left office in 2001 -- at 36 percent and 39.6 percent. He also wants higher taxes on capital gains and dividends than exist now and a smaller estate tax exemption and higher rate.

In July, the Senate, which Democrats now control 53-47, passed legislation to extend through 2013 the tax cuts for individual income up to $200,000 a year and income of married couples up to $250,000. Above those thresholds, taxpayers would face higher rates for ordinary income, capital gains and dividends.

‘Gridlock and Delay’

Senate Majority Leader Harry Reid, a Nevada Democrat, said yesterday in a statement that voters rejected “the strategy of obstruction, gridlock and delay” he has accused Republicans of employing.

“This is no time for excuses,” Reid said. “This is no time for putting things off until later. We can achieve big things when we work together, and the middle class is counting on us to achieve big things in the months ahead.”

The Republican-led House passed legislation in May to avert defense spending cuts and voted in July to extend all of the expiring tax cuts. Neither measure advanced in the Democratic- controlled Senate. Obama opposed them, too.

The automatic cuts over 10 years would be split equally between defense and non-defense programs. Democratic and Republican lawmakers have raised concerns about the cuts and say they want to avert them.

Representative Chris Van Hollen, a Maryland Democrat, said in an interview before lawmakers left Washington in September to campaign that he was optimistic lawmakers could at least find a short-term solution to allow time for talks on a larger deficit- cutting plan.

“The keys are in the Republican hands,” Van Hollen said. “The minute they decide to take a balanced approach to deficit reduction we can get there.”

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