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Republicans and Democrats debate ‘fiscal cliff’ but agree solution requires spending cuts, revenue increases

Republicans and Democrats jousted on Sunday over the best way to avoid the “fiscal cliff” but also indicated a growing, bipartisan consensus that any solution must include a combination of spending cuts and revenue increases.

“I think that’s a given, and I think the vast majority of Americans agree with that,” Senator Tom Coburn, an Oklahoma Republican, said on NBC’s “Meet the Press.” “The question is how do you do that and how do you allow taxes to rise at the same time [that] you fix the real problem? And the real problem is uncontrolled entitlement spending and a government that has grown massively.”

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The protracted debate now appears to center on the extent to which Democrats are willing to reform entitlement programs and whether additional revenue will come only from loophole closures and economic growth — as Republicans favor — or from higher income tax rates for wealthy Americans, also.

The term “fiscal cliff” refers to a combination of spending cuts and tax increases scheduled to take effect next year, if Congress does not act. The spending cuts total roughly $1 trillion over the next decade, including $500 billion from defense. Tax increases include the expiration of the payroll tax holiday and of the Bush-era income tax cuts.

Some economists believe inaction by Congress could push the nation back into recession.

President Obama advocates an extension of the Bush tax cuts for most Americans but wants the cuts to expire for households that earn more than $250,000 per year. The top federal income tax rate would rise from 35 percent to 39.6 percent under Obama’s plan.

Senator Chuck Schumer, a New York Democrat, said on “Meet the Press” that Obama’s reelection was an endorsement of his approach.

“He campaigned on it clearly. He didn’t back off from it,” Schumer said. “The exit polls showed that 60 percent of the people agreed with it.”

But Republican Senator Lindsey Graham of South Carolina said on CBS’s “Face the Nation” that letting any tax cuts expire is not an option for the GOP.

“No Republican will vote for higher tax rates,” Graham said. “We will generate revenue from eliminating deductions and loopholes, but we will insist our Democratic friends reform entitlements -- something we’ve never done, and that’s where the big money is at.”

House Speaker John Boehner has consistently voiced the same position described by Graham but struck a bipartisan note in a speech on Wednesday at the Capitol, calling on Obama and members of Congress to “challenge ourselves to find the common ground that has eluded us.”

David Axelrod, a senior adviser to Obama during the campaign, said on “Face the Nation” that Boehner’s remarks were encouraging. He also suggested that the president might be open to a deal that did not include higher income tax rates.

“Obviously, there’s money to be gained by closing some of these loopholes and applying them to deficit reduction,” Axelrod said. “So I think there are a lot of ways to skin this cat, so long as everybody comes with a positive, constructive attitude toward the task.”

But Senator Patty Murray, a Washington Democrat, sounded prepared to go over the fiscal cliff if a deal does not ensure “that the wealthiest Americans pay their fair share.”

“If the Republicans will not agree with that, we will reach a point at the end of this year where all the tax cuts expire and we’ll start over next year,” Murray said. “And whatever we do will be a tax cut for whatever package we put together. That may be the way to get past this.”

Callum Borchers can be reached at callum.borchers@globe.com. Follow him on Twitter @callumborchers.
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