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Negotiations to avoid 'fiscal cliff' continue

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    Where do both parties stand?

  • Duration 4:23
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Well as the clock ticks toward that looming fiscal cliff President Obama is taking his case to small business owners from across the country.

Meeting with more than a dozen of them of the White House later today looking to build support for his approach to avoiding -- year and tax hikes and spending cuts.

Meanwhile Republican leaders will meet with a bipartisan group of former members of congress and business leaders as well.

As both sides hold the line on taxes.

I'm willing to put revenue on the table to pay down debt and create a better economy.

But my democratic friends have to reform entitlements what will make -- Greece.

It's not raising taxes or raise make disgrace.

Is not fixing Medicare and Medicaid and Social Security.

White house Press Secretary Jay Carney says President Obama will not give on extending current tax rates on wealthy Americans.

On entitlements Carney says the president is open to changes except when it comes to Social Security.

President has long made clear that he is open to discussions about.

Strengthening Social Security.

As part of a separate track.

So is the US economy heading for a plunge over the fiscal cliff.

-- -- now associate editor and columnist for the hill AB Stoddard Stillwater the folks that you cover there on Capitol Hill.

What are they saying about the prospects here AB.

Well in the last ten days it's starts to sound more and more like Democrats don't really -- -- problem.

With going over this slope -- the -- they won't really admit that but it seems that they're not.

Working so hard to stop -- you see the White House.

Trying to tell Americans that there is going to be such a steep tax increase on the middle class that it can affect consumer spending it.

The holidays that's 20%.

Of total retail consumer demand for the year and I would have about.

Effect on the economy Republicans have already agreed to increase taxes on the wealthy when you heard senator Graham and others say they're willing to cap deductions and close loopholes.

They're willing to find new revenues.

You we know that taxes on the wealthy are going up we're talking about as the increase in rates.

Republicans tell me if the president moves off of the 250000.

Number just somewhere between 500000.

And a million they are going to end up agreeing to an increase in rates that will be -- won't be 39 point six.

But that would probably end up -- with Republicans -- there Democrats -- one place to go they have to agree to some movement on Medicare reform.

The president has inched over there but he's under tremendous pressure from liberals not to touch Medicare and he's gonna have to give something -- Republicans won't give him.

An increase in the deficit.

I know you talk to Brett bear a lot of special report he was on what is yesterday and gave a statistic that our -- room development but Brett.

Actually didn't get it right and -- -- to.

Corrected.

If you take -- the increase in the bush tax rates that President Obama campaigned on and wants to go forward with you get funding for the federal government.

-- for about eight and a half days per year that's all now that's I guess you might -- more than a drop in the bucket I'm not sure.

But you're gonna have to come up with a lot of other something either cuts or revenue to make up the -- That's right it's not enough and what we're looking at now is just trying to get knocked.

Four trillion dollar deal but just to one point two trillion dollar deal one the president wants one point six.

What we have to see a compromise of around -- of a trillion and that's that's really going -- that's not going to be -- found by.

-- by expire in the bush tax cuts for top earners you have to find more money.

And that's why both sides have to give that I think Democrats who haven't propose any spending cuts replace the sequester.

Really need to move on entitlement reform if they don't want to touch Social Security Medicare is the one they have to move on know spending cuts at all from Democrats so far.

Well I think that's why you get a sense Democrats are actually fine to let the sequester cuts.

There were greeted agreed in the budget control act of 2011.

To -- actually let them take place I think there really fine with the sequester to see that deep.

Defense cuts and not actually replace some before December 31.

And and proposed.

That is going to be interesting if that happens AB Stoddard from the hill AB thank you thank you.

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