By JIM KUHNHENN
Associated Press
WASHINGTON (AP) - A last-gasp effort Thursday to
avoid automatic tax increases and spending cuts got off on the same
convulsive, partisan tone that marked congressional attempts to resolve
the impasse before lawmakers left Washington to go home for Christmas.
With a Dec. 31 deadline for an agreement to avert
the so-called "fiscal cliff" rapidly approaching, leaders in each party
demanded the other side take the initiative. The new flare-up happened
despite a round of calls that President Barack Obama made to
congressional leaders by phone Wednesday night from Hawaii before he
boarded Air Force One to head home from vacation.
Obama's plane landed in late morning at a suburban
Maryland Air Force base, not long after Majority Leader Harry Reid took
to the Senate floor to chastise House Republicans who last week opposed
Speaker John Boehner's efforts to pass a narrowly crafted bill.
Boehner's "Plan B" would have raised tax rates only on the very
wealthiest Americans. But the opposition within his own party caucus
forced the Ohio Republican to cancel a vote on the bill.
Reid charged Thursday that the House was "being operated with a dictatorship of the speaker."
"John Boehner seems to care more about keeping his
speakership than about keeping the nation on sound financial footing,"
the Nevada Democrat said on the Senate floor.
Upon his return from a brief vacation, Obama was
facing what has become a familiar 11th-hour scenario - one the GOP says
is his fault - and even a stopgap solution was in doubt.
Without congressional action, current tax rates
will expire on Dec. 31, resulting in a $536 billion tax increase that
would touch nearly all Americans. Moreover, the military and other
federal departments would have to cut $110 billion in spending.
But while economists have warned about the economic
impact of tax hikes and spending cuts of that magnitude, both sides are
increasingly proceeding as if Congress could still act in January in
time to retroactively counter the effect on most taxpayers and
government agencies without causing economic harm.
The issue has been Obama's first test of muscle
after his re-election in November. Obama ran on a theme of having the
wealthy pay a greater share toward deficit reduction with a focus on
raising upper tax rates for individuals earning $200,000 or more and
couples making more than $250,000. In negotiations with Boehner toward a
deficit reduction plan of more than $2 trillion over 10 years, he
offered to increase that threshold to $400,000, but those negotiations
collapsed.
House GOP leaders this week put the burden on Reid,
urging him in a statement Wednesday to take up a House-passed bill that
would extend current tax rates to all taxpayers, a bill Obama has vowed
to veto.
Reacting to Reid's floor remarks Thursday, Boehner
spokesman Brendan Buck said: "Harry Reid should talk less and legislate
more if he wants to avert the fiscal cliff. The House has already passed
legislation to do so."
The White House said Obama, before leaving Hawaii,
called Boehner, Reid, Senate Minority Leader Mitch McConnell and House
Minority Leader Nancy Pelosi. The White House statement said the
president got an update on the "fiscal negotiations," but offered no
detail on who, exactly, was negotiating and whether those talks were
getting anywhere.
McConnell's office said Obama's phone call was the first from a Democrat on the fiscal cliff since Thanksgiving.
Last Friday, Obama and Reid voiced support for a
proposal that would extend current rates to taxpayers with earnings up
to $200,000 and families with earnings up to $250,000. Taxpayers above
those thresholds would see their top rates rise. The proposal would have
included extended aid to unemployed workers and some surgical cuts to
avoid steeper and broader spending cuts.
For the Senate to act would require a commitment
from McConnell not to demand a 60-vote margin to consider the
legislation on the Senate floor. McConnell's office says it's too early
to make such an assessment because Democrats have not put forward a
specific plan and have been unclear on whether extended benefits for the
unemployed would be paid for with cuts in other programs or on how it
would deal with an expiring estate tax, among other issues.
The questions hanging over Washington Thursday
centered on whether Reid would offer a specific piece of legislation,
whether McConnell would allow it to proceed to a vote on the Senate
floor and, if the Senate bill passed, whether Boehner would then call
House lawmakers back to Washington to vote on it. All those issues
remained unresolved, and success before the end of the year appeared a
long shot at best.
Reid said the GOP-controlled House easily could
have passed a White House-approved plan with a majority of Democratic
votes and a few dozen Republican votes. But House leaders generally
avoid such tactics, because they might alienate the Republican caucus
and jeopardize the speaker's job.
The House has passed a Republican plan to avert the
fiscal cliff, and the Senate has passed a Democratic version. Their
deficit-reduction projections differ by hundreds of billions of dollars
over 10 years.
Adding to the mix of developments pushing toward a
"fiscal cliff," Treasury Secretary Timothy Geithner on Wednesday
informed Congress that the government was on track to hit its borrowing
limit on Monday and said he would take "extraordinary measures as
authorized by law" to postpone a government default.
Still, he added, uncertainty about the outcome of
negotiations over taxes and spending made it difficult to determine how
much time those measures would buy.
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