Maine Republican U.S. Sens. Susan Collins and Olympia Snowe
By Kevin Miller
Washington Bureau Chief
WASHINGTON — As congressional leaders and the White House continue their high-stakes dance around the fiscal cliff, Maine's two Republican senators said Congress should at least extend tax cuts for middle-income families this year rather than risk pushing the economy back into recession.
Sens. Olympia Snowe and Susan Collins – both moderates known for their willingness to break with the party line – are among a growing number of Republicans suggesting that the threat posed by the fiscal cliff is too grave to risk a stalemate over tax cuts for the wealthiest Americans.
Congress could revisit the issue of taxes on the wealthy next year, the senators said. But both also argued that small-business owners need protection from tax increases.
"By focusing on (extending) the middle-income tax cuts that everybody agrees on and providing some assurances on the small-business side, we can take those issues off of the table," Snowe, who is retiring next month, said in an interview. "More than anything else, we have to build confidence – both market confidence and public confidence – because there is enormous skepticism that elected officials in the White House and Congress will be able to reach a consensus on these critical issues."
Economists worry that failure to address the fiscal cliff – $500 billion to $600 billion in automatic tax increases on most Americans and deep across-the-board spending cuts to take effect Jan. 1 – will trigger another recession next year.
The political posturing continued Wednesday even as the two sides resumed talks. President Obama warned Republicans not to attempt to drag the debate over raising the debt ceiling into negotiations on the fiscal cliff, saying "It's not a game I will play." Republican leaders, meanwhile, continued to bash the administration's latest fiscal cliff offer and called for serious plans to cut entitlements and spending.
But the momentum appeared to be shifting as Republicans heeded warnings – reinforced by recent polls – that voters will blame them more than Democrats if taxes on most Americans rise next year.
To up the pressure on Republicans, the White House released figures detailing how many families would be affected by a failure to reach a deal. In Maine, 500,000 middle-income households would see their income taxes rise, 122,000 families would lose access to the Child Care Tax credit altogether and 38,000 families would lose access to the American Opportunity Tax Credit for college expenses, according to the White House.
At this point, none of Maine's representatives to Congress are heavily involved in the high-level fiscal cliff negotiations. Collins and Snowe could play roles in any closely divided votes on a compromise, however.
Collins indicated she could support extending the income tax breaks on families earning $250,000 or less and individuals earning less than $200,000.
"Representative (Tom) Cole's (R-Okla.) proposal to proceed with an extension of tax relief for working families making $250,000 or less has merit because everyone agrees lower and middle-income families should not be subjected to higher taxes," Collins said in a statement to the Press Herald. "I believe that very wealthy individuals -- millionaires and billionaires -- should pay a greater percentage of their income in taxes to help us reduce the soaring deficit."
Collins voted earlier this year against a Democratic bill to only extend the middle class tax cuts. But she also voted against a Republican plan and was the only member of her party to support proceeding with a bill that would have imposed a new minimum tax on the super-wealthy.
Collins is also attempting to revive a proposal that would impose a 2 percent surtax on those earning $1 million or more. Co-authored with Democratic Sen. Claire McCaskill of Missouri, Collins' proposal would exempt or "carve out" many small-business owners who file their business taxes on their individual tax returns.
"Small business owner-operators are on the front lines of our economy," Collins said. It did not appear that Collins' support for extending tax cuts for lower- and middle-income families was contingent on a small-business exemption, however.
Snowe said she had not read the specifics of Collins' proposal but endorsed the concept. But Snowe was critical of the on-again, off-again negotiations as well as all of the "posturing and press statements" from both sides.
"It is imperative that they meet every day -- whether the principles or their staff -- to move this process forward," Snowe said.
Like other rank-and-file lawmakers on both sides, Maine Democratic Reps. Mike Michaud and Chellie Pingree have largely avoided showing their hands to the opposing side on areas of possible compromise.
Pingree, the delegation's most liberal member, has signed on to a petition that aims to force the majority House Republicans to hold a vote on the Senate Democrats' plan to extend tax cuts only for those earning $250,000 or less.
Pingree also indicated Wednesday that she would oppose cuts to such entitlement programs as Social Security and Medicare. Pingree is married to S. Donald Sussman, majority shareholder of MaineToday Media, publisher of the Portland Press Herald, Kennebec Journal and Morning Sentinel.
"Most Social Security and Medicare beneficiaries are already struggling to make ends meet," Pingree said in a statement. "I have significant concerns about any deal that includes cuts to these programs that would affect the most vulnerable or does anything to privatize either of these programs."
Michaud didn't endorse any specific plan as the negotiations continue.
"I'm willing to look at everything," Michaud said. "I know Speaker Boehner has been talking about some of the tax loopholes, which I think definitely have to be looked at."
Extending any tax cuts will open up a budget hole that will have to be filled, Michaud said. So the current fiscal crisis could present an opportunity for both tax and spending reform, he said.
Washington Bureau Chief Kevin Miller can be contacted at 317-6256 or at: