Lawmakers say they can cooperate on budget

WASHINGTON— Leading lawmakers expressed confidence Sunday that they could reach a deal to avert the “fiscal cliff” even as theylaiddownmarkersontaxesandspending thatmaymake any agreement more difficult.

Republicans and Democratic leaders have agreed on a framework to reform the tax code and government benefit programs next year, but first need to prevent across-the-board tax increases and spending cuts due to begin in January that could push the economy into recession.

That more than $502 billion toxic combination, known as the fiscal cliff, is the legacy of failed budget deals. Both sides say they see greater willingness to compromise this time.

“What I hear is a perceptible change in rhetoric from the other side,” Dick Durbin, the No. 2 Senate Democrat, saidonCNN’s “State of theUnion.” “And what it is is an invitation for our side to basically sitdownandsay,‘Whatcanwedofor this country?’ ”

Taxes are the biggest hurdle.

President Barack Obamacampaignedonapromise to raise tax rates on the wealthiest 2 percent of households. He wants to extend lowtax rates for the bottom 98 percent of the population, but said he will not sign a budget deal that keeps lowrates for thewealthiest in place.

Nancy Pelosi, the top Democrat in the House ofRepresentatives, echoed this view.

“If it’s going to bring in revenue, the president has been very clear that the higherincome people have to pay their fair share,” she said onABC’s “ThisWeek.”

Rep. Tom Price, R-Ga., said his colleagues recognize the need to generate more tax revenue even as he said any tax-rate increase on thewealthywould lead to job losses.

Most Republican lawmakers have signed a pledge promising they will not increase tax rates. Instead, they want to generate more revenue through a rewrite of the code that would eliminate exemptions, lower rates and presumably spur the economy.

They also say tax changes must be paired with spending cuts.

Price

Pelosi