Senate Majority Leader Harry Reid said negotiators could reach a U.S. budget deal today that would protect all but top earners from a tax increase at midnight.
“Negotiations are continuing as I speak,” Reid, a Nevada Democrat, said as the Senate reconvened in Washington. “Americans are still threatened with a tax hike in just a few hours.” Earlier, asked as he entered the Capitol whether he thought a deal could be reached today, Reid said, “I really hope so. We’re not there yet, though.”
Republicans insist that the spending cuts be offset with savings elsewhere in the budget and that new revenue should be used to reduce the deficit. Democrats have sought for more than a year to use new revenue to turn off the spending cuts.
Durbin also said there is a debate over raising the rate for capital gains and dividends from 15 percent to 20 percent. The issue is at what income level the rate would jump to the higher percentage, he said.
Allowing the fiscal changes to take effect would cause a recession in the first half of 2013, according to the Congressional Budget Office.