Spending, Taxing Remain Sticking Points As ‘Fiscal Cliff’ Looms

KHN’s Mary Agnes Carey speaks with Jackie Judd about negotiations on Capitol Hill to avoid the “fiscal cliff” and just how close — or far apart — Democrats, Republicans and the White House seem to be on cutting spending and letting some tax cuts for the rich expire.

>>Listen to audio of the interview.

JACKIE JUDD: Good day, this is Health on the Hill. I’m Jackie Judd. The volleys between Democrats and Republicans came fast and furious today over spending and taxing. This, as the fiscal cliff is now less than two weeks away. Senior correspondent for Kaiser Health News Mary Agnes Carey is following it all on Capitol Hill and joins us now.

Mary Agnes, in a single day, we had a sense earlier that the White House and Speaker John Boehner were possibly coming closer together — and then Boehner announced his Plan B. What is it?

Spending, Taxing Remain Sticking Points As 'Fiscal Cliff' Looms

Speaker of the House John Boehner speaks about the so-called “fiscal cliff” negotiations as House Majority Leader Rep. Eric Cantor and House Majority Whip Rep. Kevin McCarthy listen after a House Republican Conference meeting Tuesday on Capitol Hill in Washington, D.C. (Photo by Alex Wong/Getty Images).

MARY AGNES CAREY: The Speaker said he hopes to move legislation later in the week that would let the Bush-era tax cuts expire for those earning $1 million or higher. Now the details are emerging and they’re going to the caucus and trying to find out who’s supporting this and who’s not. But one thing this legislation would not do, as of this point, is deal with the sequester — those are the automatic spending and tax hikes that would occur Jan. 1. And so this seems to be focused primarily on that $1 million mark.

JACKIE JUDD: Do you have any idea why Speaker Boehner took what some may see as a sharp U-turn after there were some positive musings coming out from the White House and Capitol Hill?

MARY AGNES CAREY: This provides some political cover. There are many conservatives in his caucus who do not want to see any of the Bush-era rates expire. They want to see them all extended for everyone, and, of course, that’s been a point of contention for the White House. So as the Speaker continues to talk to the White House with President Obama, which I believe that he will, this is a sign to his caucus: “I understand where you are on taxes, I’m trying to make a compromise with the $1 million mark.” And it gets them on record if, in fact, it comes to the floor and passes.

JACKIE JUDD: And then let’s move onto the Senate. Senate Democrats have already said Plan B will go nowhere, right?

MARY AGNES CAREY: Exactly, Harry Reid said it’s dead on arrival. His press release came out just a few moments after Speaker Boehner made his announcement. So in the Senate, the perception is this is basically a waste of time — why are you doing it? But again, we can’t understate the political gamesmanship that’s going among the White House, the Democrats and the Republicans as they all try to negotiate for the best deal they can get.

JACKIE JUDD: What seems so interesting here is that a week or two ago there was a lot of speculation that part of a grand deal might well include raising the eligibility age for Medicare. I haven’t heard much discussion of that. Is it off the table?

MARY AGNES CAREY: Well, Speaker Boehner addressed this today in his news conference. He was asked specifically: “Does this have to be part of the deal?” He said, “This is an idea that’s on the table, it’s off the table, it’s back on the table.” But it’s one that doesn’t have to be resolved now. Ultimately if there is a grand bargain between the White House, Democrats and Republicans, the thought is it will sketch out parameters of savings that will be determined later on Capitol Hill through the committees of jurisdiction in both the House and the Senate. So a deal doesn’t have to say at this point whether it does or does not raise the eligibility age, that could be a debate that happens in 2013.

JACKIE JUDD: I hate to use the cliché, but do you mean, “Kicking the can down the road?”

MARY AGNES CAREY: Let’s use another one: “Devil in the details.” At this point in time, I don’t think any lawmaker, nor the president, would want to tie themselves to specific policies to attain savings goals because they know this is going to be a long and deliberate discussion with both of their caucuses.

JACKIE JUDD: OK. Well there’s a lot more ahead this week, no doubt, and we will talk again. Thank you very much, Mary Agnes Carey, of Kaiser Health News.

MARY AGNES CAREY: Thank you, Jackie.