Obama and Senate return to D.C., can’t find a deal

12/31/2012 7:10 PM

08/11/2014 12:35 PM

President Barack Obama and the Senate returned Thursday to Washington to revive stalled negotiations to avert a potentially devastating series of tax increases and spending cuts – but both parties remained pessimistic they would find a solution before a crucial end-of-the-year deadline.

“I have to be very honest,” said Senate Majority Leader Harry Reid, D-Nev. “I don’t know time-wise how it can happen now.”

The president cut short his family vacation in Hawaii to fly back to Washington on Thursday. The Democratic-controlled Senate also returned. But House Speaker John Boehner, R-Ohio, on Thursday instructed members not to come back to the Capitol for votes until 6:30 p.m. Sunday, less than 30 hours before the New Year.

Obama will meet at the White House with Republican and Democratic congressional leaders Friday afternoon, according to the White House.

Obama is calling for a scaled-back package that would raise taxes for individual income above $200,000 and family income above $250,000 – his original proposal that he campaigned on – and an extension of jobless benefits for 2 million unemployed workers.

His latest proposal on taxes is less palatable to anti-tax Republicans than his earlier offer to raise taxes only on income above $400,000 – and much less popular than a fallback plan that Boehner floated but could not get past his own Republican House. And it no longer includes proposed cuts in projected spending Obama had offered before the holidays, all part of a plan that the Republicans rejected.

The president made a fresh round of call to congressional leaders – Boehner, Reid, Senate Minority Leader Mitch McConnell, R-Ky. and House Minority Leader Nancy Pelosi, D-Calif. – late Wednesday in the hopes of jumpstarting the talks. The White House declined to release details of the conversations.

“I told the president that we’re all happy to look at whatever he proposes,” McConnell said. “But the truth is, we’re coming up against a hard deadline here, and, as I said, this is a conversation we should have had months ago. And Republicans aren’t about to write a blank check for anything Senate Democrats put forward just because we find ourselves at the edge of the cliff. It’s not fair to the American people.”

Obama and Boehner had been working on a compromise in the weeks following the election. After a possible solution fell apart, the speaker insisted the Senate first pass a bill.

The House previously had passed legislation to extend all the George W. Bush-era tax cuts that expire Tuesday and prevent $109 billion in automatic spending cuts that will take effect Wednesday. The Senate this summer passed a measure to extend only tax cuts for individuals earning less than $200,000 and families making less than $250,000.

Reid opened the Senate session Thursday with a full-throated blast against the House for its failure to be in Washington working to solve the so-called fiscal cliff that could thrust the nation back into a recession. He accused Boehner of not wanting to bring a viable solution to his caucus until after the New Year because of concerns about alienating some House Republicans before he is re-elected speaker Jan. 3 at the start of the new Congress.

“We are here in Washington working,” Reid said. “While the members of the House of Representatives are out watching movies and watching their kids play soccer and basketball and doing all kinds of things. They should be here.”

The Senate was working on unrelated foreign intelligence legislation, not on the budget crisis.

In response, Boehner spokesman Brendan Buck said Reid “should talk less and legislate more.”

“The House has already passed legislation to avoid the entire fiscal cliff,” he said. “Senate Democrats have not.”

House Republicans were told that the chamber will come back into session on Sunday with votes expected after 6:30 p.m., according to the office of House Majority Leader Eric Cantor, R-Va.

Failure to reach a deadline by the end of the year would mean that $500 billion in tax increases take effect early next year, coupled with $109 billion in spending reductions, the first installment toward $1.2 trillion in cuts over two years. Combating the problem, Congress learned this week that the government will reach the $16.4 trillion debt limit Monday.

Obama and Boehner had been debating a plan that would raise taxes for households with annual incomes of more than $400,000, cut spending $2.1 billion and apply a less-generous measure of inflation to Social Security and other programs to lower cost-of-living adjustments. But Republicans were skeptical of the White House’s calculations on budget cuts.

House Minority Whip Steny Hoyer, D-Md., took his frustration of lack of progress on fiscal cliff talks to the House floor Thursday.

“Some of us are here in this chamber today, but very frankly, all of us ought to be here in this chamber today – all the Republicans and all the Democrats – working so that our people have confidence that although our challenges are tough, that we are at least here trying to reach a consensus on solutions to those challenges,” he said.

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