Senate Republicans, who have opposed tax hikes, proposed preserving existing rates for a family income level of $550,000 and below, according to aides close to the talks. Senate Democrats countered with $450,000. President Obama proposes extending tax breaks only for incomes below $250,000.
All eyes were on Senate majority leader Harry Reid (D) of Nevada Monday morning, when he spoke from the Senate floor on the "fiscal cliff" talks. But he didn't tip his hand, saying "there are still some issues that need to be resolved before we can bring legislation to the floor."
Indeed, the fiscal cliff is about much more than finding a compromise on the Bush tax cuts. Just addressing taxes for the middle class – and little else – could actually take attempts to rein in federal deficits in the wrong direction. "If at the end of the day we end up with this deficit discussion adding to the deficit, many people will question our sanity," said Sen. Richard Durbin (D) of Illinois, the Senate majority whip.