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Fiscal cliff’ talks take back seat to shooting
Obama to visit Newtown; some movement in budget fight

Continuing talks to end a U.S. budget standoff took a back seat on Sunday to a debate over gun control after the horrific mass shooting at an elementary school in Connecticut.

President Obama was scheduled to visit Newtown. Conn. to meet privately with families of the 26 people killed on Friday during an attack at an elementary school. Twenty children, ages 6 to 7, were among the victims. Read about president’s visit.

The Sunday morning news shows, which have focused on the budget impasse over the past month, were dominated by discussions about the mass shooting and whether the nation should adopt stricter gun-control laws.

Budget negotiations did appear to show some movement over the weekend. Speaker John Boehner, leader of the House Republicans, reportedly told the president he might accept higher taxes on millionaires in exchange for restraint on spending for entitlement programs such as Medicare and Social Security.

Yet the White House wants the tax increases to start at a lower rate of income, ranging from $200,0000 per individual or $250,000 per family.

The new Republican proposal would represent the first time the party has indicated a willingness to raise taxes.

Unless Obama and House Republicans reach a deal, taxes on most Americans are set to rise sharply in the new year. Deep cuts in federal spending would also kick in.

Such a scenario, known as the fiscal cliff, could hurt the U.S. economy and even send it back into recession, some analysts warn.


Reuters
House Speaker John Boehner, the lead Republican negotiator in fiscal cliff talk with the White House.
Democrats and Republicans also have a host of other issues to resolve. Obama wants extra benefits from the unemployed to be extended and he’s pushing for an increase in the U.S. debt limit.

Congressional approval is required for the federal government to increase its debt limit — now at $16 trillion — above a certain threshold. The parties fought over the debt limit in mid-2011 before agreeing to a short-term increase, but not before the drawn-out fight damaged the economy.

Lawmakers also have go figure out what to do about the planned cuts in federal spending. Tens of billions would be subtracted equally from the military budget and nondefense programs if the cuts take place as scheduled.

Investors are also likely to see taxes on dividends and capital gains rise.