The White House and congressional negotiators agreed to contours of a budget deal including tax cut extensions, with the remaining sticking point being how to avert automatic federal spending cuts, said an official familiar with the talks.
The official described the proposed framework as the White House announced President Barack Obama’s plans to deliver remarks at 1:30 p.m. Washington time on the status of the talks. Under the proposed deal, income tax cuts would be extended for annual income up to $450,000, the official said, with rates rising to 39.6 percent on income above that. Expanded unemployment insurance would be continued through 2013.
Lawmakers are seeking to avert more than $600 billion in tax increases and spending cuts that make up the so-called fiscal cliff. Even if a deal is reached and can get through both chambers of Congress, it would be more limited than President Barack Obama and leaders of both parties sought. It would set up another battle early in 2013 over the budget and the federal debt limit.
Some Senate Democrats expressed resistance toward an income threshold for increased tax rates that would be higher than the $250,000 they sought.
Senator Tom Harkin, an Iowa Democrat, said on the Senate floor this morning that he doesn’t support a $450,000 income threshold, signaling that a deal reached by Vice President Joe Biden and McConnell could lose the votes of some Democrats.
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