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Coats, Donnelly talk ‘fiscal cliff’

Lawmakers see pros and cons to Obama plan

– Two federal lawmakers from Indiana can see the middle ground ahead of the “fiscal cliff.”

Staking out that turf is a different matter.

“There’s obviously going to have to be some give on both sides to make this happen,” Sen. Dan Coats, R-Ind., said in an interview Wednesday.

“The thing about this is that nobody is going to get everything they want,” Rep. Joe Donnelly, D-2nd, said in a separate interview. “But everybody will get one thing that’s critically important to the future of our country, and that is a long-term sustainable financial path.”

The threat of the fiscal cliff – an economic nosedive projected next year if Congress allows $600 billion in tax increases and automatic spending cuts to occur – is supposed to produce a compromise among the Republican House, the Democratic Senate and President Obama on a sweeping debt-reduction plan before Jan. 1. It probably would affect Medicare and Social Security eligibility guidelines and revamp the tax code.

“All of that coming together in a lame-duck session is tall odds,” Coats said about the waning weeks of the 112th Congress.

Where would he start? Coats supports keeping or reducing current tax rates while eliminating tax credits, deductions and subsidies, although he favors continuing mortgage and charitable donation deductions for middle-class taxpayers.

Coats, a member of the Senate Appropriations Committee, also wants all federal agency leaders to identify nonessential spending and nonperforming programs that can be tossed. Budget caps are another idea, he said.

President Obama is insisting on higher tax rates for the wealthiest Americans. But Donnelly, who will join Coats in the Senate next year after his election Nov. 6, supports extending the Bush-era tax cuts for a year, and he predicted lower corporate tax rates along with the end of various corporate tax breaks.

Donnelly said he also would like to see a plan “that reduces spending in a very significant way.”

Both legislators oppose a temporary extension of current tax-and-spend levels into next year unless there is evidence that Congress and the White House need the time only to fine-tune what Coats describes as “a grand plan.”

“The basis of the extension would be that we need a little bit more time to put a thoughtful, common-sense plan in place,” Donnelly said.

“The problem with an extension is that this thing has been extended to the point of leaving the country in limbo. And it is having a negative effect on our economy,” Coats said.

He lamented that when the Senate returned from recess this week, the first bill the Democratic majority began considering would open more public land to hunting and fishing.

The delay in introducing fiscal legislation “has us all scratching our heads,” Coats said.