Officials see little hope of averting “Fiscal Cliff”

Officials see little hope of averting “Fiscal Cliff”

President Obama will meet with Congressional leaders on Friday, and House Republicans summoned lawmakers back for a Sunday session, in a last-ditch effort to avert a fiscal crisis brought on by automatic tax increases and spending cuts scheduled to hit next week.

Republicans expressed a flicker of hope Thursday that a deal could still be reached to at least avert most of the tax increases on Jan. 1, to prevent a sudden cut in payments to medical providers treating Medicare patients and to extend expiring unemployment benefits. But both parties’ leaders said time is running out.

“Here we are, five days from the New Year, and we might finally start talking,” said Senator Mitch McConnell of Kentucky, the Senate Republican leader.

The overriding emotion Thursday, as senators convened for a rare session between Christmas and New Year’s Day, appeared to be embarrassment. The continuing impasse “demonstrates a tremendous lack of courage here in Washington to address the issues that need to be addressed — at every level,” said Senator Bob Corker, Republican of Tennessee.

Lawmakers and aides from both parties cautioned that the burst of activity could be more about making sure the other side gets the blame than any real search for a resolution before the Jan. 1 deadline. Under Senate rules, no deal could run the gantlet of procedural hurdles in time for a final vote before the deadline without all the senators agreeing not to slow progress.

“I have to be very honest,” Senator Harry Reid of Nevada, the majority leader, said Thursday. “I don’t know time wise how it can happen now.”

White House officials continued to put the onus on Republicans to clear a procedural path to a quick vote on a negotiated deal.

“The only way America goes over the cliff is if the Republican leaders in the House and the Senate decide to push us by blocking passage of bills to extend tax cuts or the middle class,” said the White House communications director Dan Pfeiffer. “It’s a question of their willingness to put country before party.”

Republicans said there was nothing preventing Mr. Reid from putting formal legislation on the Senate floor, and to date, no such bill has been written.

But the contours of a fallback deal did come into view Thursday, even as the will to achieve it lagged behind.

Republicans involved in the talks said both sides would probably be able to agree to extend expiring Bush-era tax cuts up to some income threshold higher than Mr. Obama’s $250,000 cutoff but lower than the $1 million sought by the House speaker, John A. Boehner. To that, leaders would probably agree to add provisions to stop the alternative minimum tax from suddenly enlarging to hit more middle class households, and possibly to extend expiring unemployment benefits.

Republicans would be far less receptive to Mr. Obama’s call to temporarily suspend across-the-board spending cuts unless such a suspension was accompanied by significant and immediate spending cuts elsewhere.

But no such deal could be reached without significant, face-to-face negotiations between the president, Senate leaders and House leaders, aides said. McConnell aides said a phone call between the president and the Senate Republican leader Wednesday night was the first outreach Mr. McConnell has had from any Democrat since Thanksgiving.

“It appears to me the action, if there is any, will be on the Senate side,” Mr. McConnell said Thursday afternoon on the Senate floor.

After a House Republican leadership conference call on Thursday, Representative Eric Cantor of Virginia, the majority leader, announced that House members would return to Washington on Sunday for legislative business, with votes in the evening. Lawmakers were warned that the House might be in session through Jan. 2, the day the 112th Congress disbands. The next day, the 113th Congress will convene, wiping out any unfinished work of the past two years.

Between such glimmers of hope, the talk in Washington on Thursday was anything but conciliatory. Representative Steny H. Hoyer of Maryland, the No. 2 House Democrat, said Republicans would use an imminent fight over raising the government’s statutory borrowing limit to fight for big spending cuts, and compared that to taking one’s own child hostage and threatening to kill it.

On the Senate floor Thursday, Mr. Reid excoriated House Republicans for failing to consider a Senate-passed measure that would extend lower tax rates on household income up to $250,000. He urged House members to return to the Capitol to put together at least a modest deal to avoid the more than a half-trillion dollars in automatic tax increases and spending cuts set to begin in January.

“The American people are waiting for the ball to drop,” Mr. Reid said, “but it’s not going to be a good drop.”

Source: The New York Times