President Barack Obama today said that Capitol Hill negotiators are "within sight" of a deal that would spare most of the nation from expiring tax cuts, part of the notorious fiscal cliff that will materialize in a matter of hours.
"Democrats and Republicans have to get this done," Obama said in the early afternoon at a White House event. "They're close, but they're not there yet."
The emerging agreement, which still needs approval by the Democratic-controlled Senate and the Republican-controlled House, also would delay a 26.5% cut in Medicare pay for physicians for 1 year, according to published reports. When these votes will occur, however, is anyone's guess. It is possible the final ayes and nays will not be uttered until later this week.
Megan Whittemore, a spokesperson for House Majority Leader Eric Cantor (R-VA), told Medscape Medical News that the House will go into action as soon as the Senate gives it something to consider. "There's little difference between [us] voting tonight or tomorrow," Whittemore noted. However, after she made her remarks, the House adjourned for the day with a plan to meet again at noon on January 1.
Obama said lawmakers could be legislating up until midnight on December 31.
"It looks like I'll spend New Year's Eve in DC," he cheerily said.
Later in the afternoon, Senate Minority Leader Mitch McConnell (R-KY) also expressed optimism about preventing a tax hike that would cost the average family an estimated $2,000. "We've reached an agreement on all the tax issues," McConnell said on the floor of the Senate.
The fiscal cliff includes not only tax cuts that expire in January but also automatic spending cuts in 2013. This crash course in austerity, some experts warn, could plunge the nation into another recession.
SGR-Triggered Cuts Could Be Postponed After January 1
Along with the president, physicians will ring in the new year wondering about their economic future. On January 1, they face a 26.5% reduction in Medicare reimbursement triggered by the program's sustainable growth rate (SGR) formula. Medicare rates will take another 2% hit as the result of across-the-board spending cuts — called sequestration — that will occur as a result of Congress' failure to craft a budget deficit deal in 2011.
Organized medicine predicts that if Medicare rates go into such a free fall, thousands of physicians will stop accepting new Medicare patients or even drop out of the program.
Congress has routinely postponed previous SGR-mandated pay cuts in the waning days of December. What makes this particular reimbursement crisis harder to solve is that it is intertwined with larger and thornier fiscal cliff issues such as the expiration of the Bush-era tax cuts. Obama and Congressional Democrats want to extend these tax cuts for the vast majority of Americans but let them expire for the ultrarich.
Obama first sought to preserve the tax cuts for families with incomes less than $250,000 a year, whereas Republicans originally wanted to keep them for all Americans. Then House Speaker John Boehner (R-OH) floated the idea of a $1 million threshold. As of Monday afternoon, Senate Republicans and Democrats reportedly were closing in on an agreement that would draw the tax cut line at $450,000.
Today Obama said the tentative deal also would extend unemployment insurance benefits as well as tax credits for clean energy companies, families with children, and those paying college tuition. He described the agreement under construction as not the grand solution to the fiscal cliff that he once hoped for.
"We're going to solve this problem instead in several steps," Obama said.
Missing from the president's remarks were any references to forestalling sequestration, which presumably could be addressed by lawmakers in January as yet another step in avoiding the cliff. McConnell suggested as much when he said today that "we will continue to work on finding smarter ways to cut spending, but let's not let that hold up protecting Americans from the tax hike that will take place in about 10 hours."
Obama also did not mention a "doc fix" that would avert the 26.5% Medicare pay cut required by the SGR formula. However, it is part of the deal under discussion in the Senate, according to the New York Times and other media outlets.
If lawmakers fail to ratify any cliff deal that includes a doc fix by the end of the day, they could vote in early January to retroactively postpone the massive pay cut, as they have done during previous SGR crises.
Medscape Medical News © 2012 WebMD, LLC
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Cite this: Fiscal-Cliff Deal 'In Sight,' Said to Include 1-Year Doc Fix - Medscape - Dec 31, 2012.