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The way to avert the fiscal cliff is for the House to pass a bill that extends the Bush tax cuts for all but those families earning more than $250,000 in income, he added. The bill passed the Senate last July with no Republican votes.
So, with just five days to go before some $600 billion in tax hikes and spending cuts take hold, congressional leaders are hunkering down in bargaining positions back to where they were before the August break. But at the same time, leaders on both sides of the aisle say that there is flexibility in the system to come to terms even after the Jan. 1 deadline expires.
One approach is for Congress to pass a stopgap measure akin to a “continuing resolution,” which is used to continue spending at current levels until Congress can complete work on a new spending bill, said House minority whip Steny Hoyer (D) of Maryland, after a briefing with reporters on Thursday.
If Congress was close to a deal but ran out of time to draft the legislative language needed to implement it, a 10-day extension could avert the cliff, he said. If Boehner allowed a floor vote on extending all the Bush tax cuts except for those over $250,000, “I think it would pass,” he said.
Another might be for President Obama to direct the Treasury to delay tax hikes unilaterally, until a deal is finalized, a strategy President George H.W. Bush used for a limited period of time when a tax deal with Congress appeared imminent.
On Wednesday, Treasury Secretary Timothy Geithner made a similar proposal when he told Congress that the nation would run up against its debt ceiling on Dec. 31, but that he would use “exceptional measures” to avoid the US breaching its borrowing limits for at least another month.
“The message from Geithner is that the world is not going to end on New Year’s eve, that there’s some flexibility in the system,” says Ross Baker, a congressional expert at Rutgers University in New Brunswick, N. J.