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Lawmakers spar over who should pay more taxes

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Politics,Congress,Susan Ferrechio,Campaign 2012

House Minority Leader Nancy Pelosi said she won't accept a deal to avert the so-called fiscal cliff unless it raises the tax rates of the nation's top income earners.

Pelosi, a Democrat from California, said on ABC's "This Week" that it would be impossible to raise the money needed to stop $1.2 trillion in cuts coming January unless tax rates go up for some people.

"The president has been very clear that the higher-income people have to pay their fair share," Pelosi said on the show.

Pelosi's comments aired shortly after President Obama, traveling Sunday in Bangkok, Thailand, was overheard joking to Buddhist monks about his efforts to strike a budget deal with Congress.

"We're going to need a lot of prayer for that," Obama said.

Democrats will also need to compromise.

While Obama has threatened to veto any bill that does not raise taxes on households earning more than $250,000, Republicans insist they will not vote for legislation that raises rates on anyone.

"The last thing small businesses need in this economy is a tax hike," Kevin Smith, a spokesman for House Speaker John Boehner, R-Ohio, told The Washington Examiner on Sunday following Pelosi's comments. "The speaker outlined a responsible path forward for averting the fiscal cliff without raising tax rates, and that is the approach that can find bipartisan support."

Rep. Tom Price, R-Ga., on Sunday outlined the Republican alternative.

The GOP plan, Price said on CNN's "State of the Union," includes "broadening the base, lowering the rates, closing the loopholes, limiting the deductions, limiting the credits and making certain that we identify the appropriate spending reductions so that we have, indeed, a balanced approach."

With Congress out of session for the Thanksgiving holiday and the president traveling in Asia, congressional leaders and staff will work mostly behind closed doors on the framework for a proposal that can pass both the House and the Senate by the end of the year.

Congress returns on Nov. 26, leaving about five weeks for the two sides to finalize a compromise.

Without a deal by Jan. 1, tax rates are set to rise on all income earners and hundreds of millions of dollars in cuts to domestic and military spending are set to kick in, which the Congressional Budget Office said will damage the economy and cause the unemployment rate to rise to more than 9 percent.

Party leaders in both the House and Senate huddled Friday with President Obama and emerged from the meeting pledging to work together on a compromise.

Among the possible deals circulating in the Capitol is one that would raise rates on those earning more than $1 million, though Senate Majority Whip Dick Durbin, D-Ill., seemed to reject that idea Sunday, saying it would not raise enough money to offset the looming automatic cuts.

"If we want to protect the middle-income families, $250,000 income for a family is a reasonable number," Durbin said. "To go up to a million, I'm not sure what we're proving with that. There has to be revenue on the table."

But the idea is gaining favor among his Democratic colleagues in the Senate, including retiring Sen. Kent Conrad, D-N.D., who is head of the Budget Committee.

Conrad told reporters enough revenue could be raised to avert the fiscal cliff, "if you had rates where they are now or close to where they are now," but closed tax loopholes and raised the rates on capital gains and dividends.

sferrechio@washingtonexaminer.com

sferrechio@washingtonexaminer.com

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Susan Ferrechio

Chief Congressional Correspondent
The Washington Examiner