CNN just reported that President Obama will speak to the the nation about the so called "fiscal cliff" negotiations at 1:30 p.m.
This report comes just as several outlets are reporting that Significant progress made in fiscal cliff discussions, sources say, as the Democrats seem to have made major concession adopting much of the Republican proposals on the tax revenue side.
(CNN) -- A possible deal to avert the midnight deadline for the "fiscal cliff" of automatic tax increases and spending cuts began to take shape on Monday, including an agreement to raise the income tax rate on top earners to what it was during President Bill Clinton's last term in office, according to sources close to the process.
Senator Tom Harkin (D-Iowa) is warning of possible opposition from Senate liberals who recognized that if we cap the level of maximum government revenues closer to the Bush era level than the Clinton era level we are simultaneously setting the maximum level of government spending so low we guarantee major cuts to social spending.
Sources say the concession under discussion is raising the threshold on individual incomes to $400,000, and for households on incomes up to $450,000. Liberals are concerned that to the extent we lock in Bush era tax revenues we set the cap on total spending so low we have no choice but to cut social spending.
"No deal is better than a bad deal, and this looks like a very bad deal the way this is shaping up," Sen. Tom Harkin, D-Iowa, said.
The proposal under discussion calls for rolling back tax rates on the highest-income earners to Clinton-era levels, increasing the estate tax rate, extending unemployment benefits and potentially putting off the $110 billion in automatic spending cuts called for in the legislation that created the cliff, according to sources close to the process.
The two sides are closer to an agreement than they were on Sunday, the sources told CNN. But as the Senate opened for business Monday morning, Senate Majority Leader Harry Reid said negotiators remained apart on key issues.
"There are still some issues that need to be resolved before we can bring legislation to the floor," the Nevada Democrat said.
Greg Robb, of |Market Watch confirms CNN's reports which I haven't yet found in writing from CNN.
WASHINGTON (MarketWatch) -- President Barack Obama will speak about the fiscal cliff at 1:30 p.m. Eastern, the White House announced Monday. Middle class Americans will attend the event, the statement said. Negotiations to avert the fiscal cliff continue on Capitol Hill.
10:06 AM PT: Dem Sen. Harkin criticizes possible tax compromise in 'fiscal cliff' talks, saying Democrats are "giving up too much on tax rates for the rich."
“What it looks like is, it looks like all of the tax things are going to be made permanent, but all of the other things that the middle class in America depend on is extended for one year, maybe two years. I think that’s grossly unfair. Grossly unfair.”
Harkin argued Democrats were making permanent generous tax rates for wealthier households even as, in return, they were only winning temporary extensions of programs that would help the poor and middle class, such as federal unemployment benefits.
Harkin also voiced concern that Vice President Biden, Senate Majority Leader Harry Reid (D-Nev.) and Senate Republican Leader Mitch McConnell (Ky.) might extend the estate tax at its current rate: 35 percent for inheritances over $5 million.
“We’re going to lock in forever the idea that $450,000 a year is middle class in America? Need I remind people that at $250,000 a year, that’s the top 2 percent income earners in America?” Harkin said. “I know the president keeps saying he wants to protect tax cuts for the middle class — have we forgotten average income earners in America are making $25,000, $30,000, $40,000, $60,000 a year?” he said. “That’s the real middle class in America and they are the ones getting hammered now.”
CNN is also reporting second source confirmation that Democrats have agreed to move the threshold of "middle class tax cuts" to $400,000 for individuals and $450,000 for households.
WASHINGTON — The contours of a deal to avert the U.S. “fiscal cliff” were emerging with just hours before a midnight deadline, officials familiar with the negotiations said Monday.
The deal in the works would raise tax rates on families making over $450,000 a year to 39.6 percent. The tax on estates worth more than $5 million would increase to 40 percent from 35 percent. Unemployment benefits would continue for one year.
But the officials said the White House and Republicans were at an impasse over what to do about automatic, across-the-board spending cuts set to start taking effect Tuesday. Democrats want to put off the cuts for one year and offset them with unspecified revenue.
Stocks bounced to trade near session highs in choppy trading Monday as lawmakers in Washington scrambled to strike a last-minute deal to avert the "fiscal cliff." ...
"The discussions are going very well…I do think there's going to be a resolve to this," said Senator Bob Corker on CNBC. "It's almost irrelevant when it happens—it's going to happen and it's probably going to happen today."
The Guardian also reports the Senator Kyl (R) is reporting "happy news" that the negotiations are going well.
More than $600 billion in revenue would be raised – far less than the target President Obama first set in talks with congressional leaders. The president sought $1.6 trillion in new revenue from a large deficit-reduction package, and at least $800 billion in earlier talks with Republicans over a deal on tax increases.
The agreement would set the top tax rates at 39.6% for income above $450,000 for households and $400,000 for singles, which is a narrower definition of who is wealthy than Obama once sought, according to a source who was not authorized to discuss the negotiations. The president won reelection campaigning on asking those who earn above $250,000 to contribute more in taxes.
The investement income tax rate will rise for those with higher incomes from 15% to 20% for capital gains and dividends.
The estate tax, which has been a key sticking point throughout the weekend of negotiations, appears to have been settled. The agreement cuts the difference, setting the new rate at 40% on estates valued at more than $5 million – a compromise between today’s 35% rate and the 45% rate Democrats sought on estates of $3.5 million or more.
Democrats apparently have gained a phase-out of tax deductions on incomes over $250,000.
However, the current snag is a 90 day delay of the sequestration cuts. Republicans are pushing for a one month delay, while the Democrats prefere to postpone them for one year.