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One last day for a fiscal deal

Senators struggle to produce a plan to avert tax increases, spending cuts

Senate majority leader Harry Reid is locked in talks with Republicans.

J. Scott Applewhite/Associated Press

Senate majority leader Harry Reid is locked in talks with Republicans.

WASHINGTON — Eleventh-hour negotiations in the Senate made little to no progress Sunday as lawmakers brought America to the very edge of the fiscal cliff, and Republicans asked Vice President Joe Biden to get involved in a late bid to jump-start the talks.

Senators were still pursuing their sputtering effort as the final 30 hours began to elapse before income taxes rise on all Americans and deep spending cuts are imposed across the government, from defense contracting to medical research, from highway maintenance to national parks.

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Closed-door talks among leaders remained stalled for most of the day but resumed, with Biden’s participation, late in the afternoon, just before gloomy rank-and-file senators adjourned for the night. As scheduled, House members arrived in the Capitol for possible action on a Senate bill, but they had no cliff deal to vote on, with senators confounded by their inability to bridge partisan divides.

“I am frustrated, embarrassed, and angry,’’ declared Senator Joseph Manchin III, a West Virginia Democrat, one of many senators who said the chances were rising quickly that Congress would vault off the cliff.

Republicans and Democrats said they agreed that middle-class taxpayers should be protected from the tax increases, but they still disagreed over where to set the income threshold for taxes to rise on the wealthy. The two sides also remained at odds over how much spending should be reduced as part of a short-term deal.

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Among the sticking points was a Republican demand for cuts in the growth of Social Security that the White House had agreed to earlier in the month, but which Democrats refused to consider at such a late stage and because a scaled-back, stopgap fiscal package is now under consideration. With talks stalled over the request for most of the day, the GOP later backed off the request after a closed-door meeting of Republican senators.

Senator John McCain, Republican of Arizona, asserted after the caucus meeting that it was “not a winning hand’’ for the GOP to demand that many well-to-do families making more than $250,000 be protected from tax increases, while it also sought to cut Social Security benefit increases for elderly people living on fixed incomes.

The first Senate gavel of the day introduced a negative tone. Senate minority leader Mitch McConnell emerged from behind closed doors at about 2 p.m. and said Harry Reid, the majority leader, and the Democrats had not submitted a counteroffer to a proposal he made on Saturday evening. He had expected the Democrats counter at 10 a.m., but it never arrived. McConnell said he was seeking an intervention from Biden to cut a deal.

“I am willing to get this done, but I need a dance partner,’’ McConnell said on the Senate floor. “I am concerned about the lack of urgency here.’’

A somewhat chagrined Reid acknowledged the Democrats had been unable to produce a counterproposal. Reid said he had been consulting with President Obama.

“The Republican leader has shown absolutely good faith,’’ Reid said. “But it’s just that we are far apart on some pretty big issues.’’

The Senate was seeking to produce a measure that could avert about $500 billion in automatic tax increases scheduled to take effect on Tuesday, New Year’s Day, and spending cuts that are scheduled to take their bite on Wednesday.

Public anger and frustration is building at the lack of response by Congress to a looming, politically created fiscal crisis that could produce a recession in 2013 if it is not resolved within a few weeks.

Democrats wanted an extension of jobless benefits for 2 million people who have not been able to find work. Also subject to negotiations were two perennial issues that Congress typically deals with routinely — putting off a 27 percent cut for Medicare providers and an easing of rules for who must pay the alternative minimum tax.

Democrats sought to delay the effect of automatic spending cuts worth about $110 billion, saying those should be put off until an upcoming debate over the nation’s credit limit, which needs to be increased before February. A scheduled increase in inheritance taxes for estates worth more than $1 million also was in play.

Reid said a key stumbling block in Sunday’s negotiations was a Republican demand for changes to Social Security that Democrats are now unwilling to accept. The White House two weeks ago had said Obama was willing to accept the change, which involved using a new formula that would reduce annual cost-of-living increases.

Reid said that proposal is no longer on the table, now that the Senate is trying to produce a stripped-down agreement rather than the broader deal Obama and House Speaker John Boehner had been attempting to reach.

Some Republicans told reporters said they never were insisting upon a Social Security reduction, but they said more spending cuts needed to be identified in a potential agreement to balance tax increases on the wealthy.

“Taxes on the wealthy, we know that will happen today, tomorrow, or in the next two weeks, but what [Democrats] are now proposing is spending it all,’’ said Senator Robert Corker, Republican of Tennessee. Corker said $110 billion in automatic “sequester’’ cuts — the budget cut end of the fiscal cliff — should not be delayed, as Democrats were seeking.

If no deal is reached by Monday, Democrats are expected to seek a bill setting $250,000 as the threshold for taxes to rise, extending unemployment benefits, and possibly containing the Medicare and alternative minimum tax fixes. But that seemed like a long-shot bid. For such a measure to reach a Senate floor vote in a single day, Republicans would have to agree not to filibuster the measure.

The day began in Washington with a public exchange of accusations by Obama and Boehner. In a prerecorded interview on NBC’s “Meet the Press” Sunday morning, Obama said Republicans had failed to compromise and accept concessions that the president said he has made.

“The offers that I’ve made to them have been so fair that a lot of Democrats get mad at me,’’ Obama said. “I offered to make some significant changes to our entitlement programs.

“The way they’re behaving is that their only priority is making sure that tax breaks for the wealthiest Americans are protected. That seems to be their only overriding, unifying theme,’’ he said.

Boehner issued a statement that was sharply critical of the president. “Americans elected President Obama to lead, not cast blame,’’ Boehner said. “The president’s comments today are ironic, as a recurring theme of our negotiations was his unwillingness to agree to anything that would require him to stand up to his own party.’’

The Senate began negotiating toward a scaled-back fiscal cliff deal on Friday after a meeting with Obama at the White House. That provided the greatest hope for a deal since Dec. 17, when Obama offered to reduce the amount of future Social Security cost-of-living increases and said he would accept a $400,000 threshold for tax increases on the wealthy, instead of $250,000.

Boehner stepped away from that negotiation and unilaterally pursued a bill to allow tax cuts to expire only for people earning more than $1 million. Predictions that Washington would go over the fiscal cliff began to rise after Boehner failed to rally his GOP majority around that plan.

Christopher Rowland can be reached at crowland@globe.com.
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