Congress won’t be able to prevent federal spending cuts scheduled for 2013 unless Republicans allow tax increases in a deficit-reduction plan, Senate Majority Leader Harry Reid wrote in a letter to Republican senators.
“Once Republicans are willing to abandon their commitment to more tax breaks for multimillionaires and special interests and their plans to end Medicare, I am confident that we can reach an agreement,” Reid, a Nevada Democrat, wrote in a letter dated May 21 to Senate Republicans. “Unfortunately, it appears that Republicans’ blind adherence to Tea Party extremism is making it impossible to reach this sort of balanced agreement before the election.”
Reid was responding to a May 17 letter sent to him by 41 Republicans, who urged Reid to act now to avert the so-called fiscal cliff waiting at the end of the year.
If Congress doesn’t act, the George W. Bush-era tax cuts on wages, capital gains, dividends and estates will expire at the end of 2012. Automatic spending cuts of $1.2 trillion over 10 years to the Defense Department and other programs will take effect in 2013.
Barclays Capital has estimated that the fiscal cliff could reduce gross domestic product in the U.S. by 3 percent.
Democrats should “get with the program” and focus on the expiring tax cuts, said Julia Lawless, a spokeswoman for Senator Orrin Hatch of Utah, the top Republican on the Senate Finance Committee, who had organized the Republican letter.
“The largest tax increase in history is set to hit almost every single American on Jan. 1,” she said. “The American people aren’t interested in a political sideshow by the president and his Capitol Hill allies.”
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