Franken sees a short-term deal to end budget crisis

Democratic U.S. Sen. Al Franken said Friday he thinks congressional leaders will strike a short-term deal to end the budget deadlock gripping Washington and push the tougher decisions into the new Year.

"You can't make these tax reform decisions in two weeks," Franken said. "And you don't want to."

Franken visited the University of Minnesota's Twin Cities campus to meet with residents and community leaders who could face program cuts if elected leaders can't broker a new budget deal before the end of the year. Franken heard from hospital officials, personal-care assistants and one man who gets dinner from Meals on Wheels.

President Obama and congressional leaders have been meeting privately to strike a new budget deal before Jan. 1, when a menu of automatic tax hikes and deep budget reductions kicks in. This so-called fiscal cliff could throw the stock market into turmoil and drag the nation's already fragile economic recovery back into recession.

Republicans have been in a bitter and protracted fight with the president over a new budget deal. Republicans are insisting on reductions to entitlement programs that Democrats have vowed to protect. Obama wants high earners to pay more in income taxes, a proposal the GOP stridently rejects.

Franken says he is holding firm in his opposition to reductions in Social Security and Medicare as part of a budget deal. He said Social Security is not a drag on the current deficit picture, and that lawmakers already sliced $716 billion from Medicare as part of Obama's health-care reform.

Franken said he is open to finding more efficiencies in health care, like allowing Medicare officials to negotiate directly with pharmaceutical companies to drive down prescription costs.

"I think there are plenty of things we can do and look at," he said.

Some congressional Republicans have started to hint that they might be open to some new tax increases, but are not embracing the president's call to raise income tax rates for high earners.

Minnesota U.S. Rep. John Kline, a Republican, has said he supports tax reform that eliminates some tax loopholes.

"[Kline] continues to oppose any plan that raises tax rates because it would hurt our economy and cripple what already has been the slowest economic recovery since the Great Depression," said Troy Young, a Kline spokesman. "He agrees with the majority of Minnesotans who tell him that Washington has a spending problem that can't be fixed with tax hikes."

Budget officials predict that without a deal, Minnesota businesses could shed 70,000 jobs by the end of 2014, driving up unemployment by a couple percentage points. That would cause the projected budget deficit to spike an additional $1.7 billion, along with at least $117 million in automatic reductions to state programs.

Franken supports the president's call to raise incomes taxes for high earners, but said the rate must not be so high that it encourages tax avoidance.

"When you see people who are very wealthy paying 14 percent, that's not fair, either," Franken said.

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