Obama invites congressional leaders to cliff talk

Pres­i­dent Barack Obama walks past a Marine honor guard as he steps off the Marine One heli­copter and walks on the South Lawn at the White House in Wash­ing­ton Thurs­day as he returned early from his Hawaii vaca­tion for meet­ings on the fis­cal cliff. (Asso­ci­ated Press | Charles Dharapak)

DAVID ESPO

AP Spe­cial Correspondent

WASHINGTON — A dead­line loom­ing, Pres­i­dent Barack Obama will meet with con­gres­sional lead­ers at the White House on Fri­day in search of a com­pro­mise to avoid a year-end “fis­cal cliff” of across-the-board tax increases and deep spend­ing cuts.

The devel­op­ment capped a day of grow­ing urgency in which Obama returned early from a Hawai­ian vaca­tion while law­mak­ers snarled across a par­ti­san divide over respon­si­bil­ity for grid­lock on key pock­et­book issues. Speaker John Boehner called the House back into ses­sion for a highly unusual Sun­day evening session.

Adding to the woes con­fronting the mid­dle class was a pend­ing spike of $2 per gal­lon or more in milk prices if law­mak­ers failed to pass farm leg­is­la­tion by year’s end.

Four days before the dead­line, the White House dis­puted reports that Obama was send­ing law­mak­ers a scaled-down plan to avoid the fis­cal cliff of tax increases and spend­ing cuts.

Admin­is­tra­tion offi­cials con­firmed the Fri­day meet­ing at the White House in a bare-bones announce­ment that said the pres­i­dent would “host a meeting.”

An aide to Sen­ate Repub­li­can Leader Mitch McConnell said the Ken­tucky law­maker “is eager to hear from the president.”

A spokesman for House Speaker John Boehner issued a state­ment that said the Ohio Repub­li­can would attend and “con­tinue to stress that the House has already passed leg­is­la­tion to avert the entire fis­cal cliff and now the Sen­ate must act.”

While there was no guar­an­tee of a com­pro­mise, Repub­li­cans and Democ­rats said pri­vately ele­ments of any agree­ment would likely include an exten­sion of mid­dle class tax cuts with increased rates at upper incomes as well as can­cel­la­tion of the sched­uled spend­ing cuts. An exten­sion of expir­ing unem­ploy­ment ben­e­fits, a reprieve for doc­tors who face a cut in Medicare pay­ments and pos­si­bly a short-term mea­sure to pre­vent dairy prices from soar­ing could also become part of a year-end bill, they said.

That would post­pone polit­i­cally con­tentious dis­putes over spend­ing cuts for 2013.

Top Sen­ate lead­ers said they remain ready to seek a last-minute agree­ment. Yet there was no leg­is­la­tion pend­ing and no sign of nego­ti­a­tions in either the House or the Sen­ate on a bill to pre­vent the tax hikes and spend­ing cuts that econ­o­mists say could send the econ­omy into a recession.

Far from con­cil­ia­tory, the rhetoric was con­fronta­tional and at times unusu­ally personal.

Sen­ate Major­ity Leader Harry Reid, D-Nev., accused Boehner of run­ning a dic­ta­tor­ship, cit­ing his refusal to call a vote on leg­is­la­tion to keep taxes steady for most while let­ting them rise at upper incomes. The bill “would pass over­whelm­ingly,” Reid pre­dicted, and said the Ohio Repub­li­can won’t change his mind because he fears it might cost him re-election as speaker when the new Con­gress con­venes next week.

Boehner seems “to care more about keep­ing his speak­er­ship than keep­ing the nation on a firm finan­cial foot­ing,” he said in remarks on the Sen­ate floor.

A few hours later, McConnell expressed frus­tra­tion and blamed the stand­off on Obama and the Democ­rats. “Repub­li­cans have bent over back­wards. We stepped way, way out of our com­fort zone,” he said, refer­ring to GOP offers to accept higher tax rates on some taxpayers.

“We wanted an agree­ment, but we had no tak­ers. The phone never rang, and so here we are five days from the new year and we might finally start talk­ing,” McConnell said.

Still, he warned: “Repub­li­cans aren’t about to write a blank check for any­thing the Democ­rats put for­ward just because we find our­selves at the edge of the cliff.”

Bren­dan Buck, a spokesman for Boehner, responded in a sim­i­lar vein to Reid’s com­ments. “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,” he said, refer­ring to a mea­sure that extends exist­ing cuts at all income levels.

Address­ing the GOP rank and file by con­fer­ence call, Boehner said the next move is up to the Sen­ate, which has yet to act on House-passed bills to retain expir­ing tax cuts at all income lev­els and replace across-the-board spend­ing cuts with tar­geted sav­ings aimed largely at social programs.

“The House will take this action on what­ever the Sen­ate can pass — but the Sen­ate must act,” he said, accord­ing to a par­tic­i­pant in the call.

Boehner told Repub­li­can law­mak­ers the House would con­vene on Sun­day evening. Rep. Tom Cole, R-Okla., an ally of the speaker, quoted him as hav­ing said “he didn’t really intend to put on the floor some­thing that would pass with all the Demo­c­ra­tic votes and few of the Repub­li­can votes.”

The risk of higher milk prices stems from the pos­si­bil­ity that exist­ing farm pro­grams will expire at year’s end, and nei­ther cham­ber of Con­gress has sched­uled a vote on even a tem­po­rary exten­sion to pre­vent a spike. There have been unver­i­fied esti­mates that the cost to con­sumers of a gal­lon of milk could dou­ble with­out action by Congress.

The pres­i­dent flew home from Hawaii overnight after speak­ing with top con­gres­sional leaders.

Before leav­ing the White House last Fri­day, the pres­i­dent had called on law­mak­ers to pass scaled-down leg­is­la­tion that pre­vents tax increases for the mid­dle class, raises rates at upper incomes and renews expir­ing unem­ploy­ment ben­e­fits for the long-term job­less. He said he still sup­ports a more sweep­ing mea­sure to include spend­ing cuts to reduce deficits, but said they could wait until the new year.

That capped an unpre­dictable week in which Boehner piv­oted away from com­pre­hen­sive deficit reduc­tion talks with Obama to an aborted attempt to push leg­is­la­tion through the House that retained exist­ing tax lev­els except above $1 mil­lion. Anti-tax Repub­li­cans rebelled at rais­ing rates on million-dollar earn­ers, and Boehner backpedaled and can­celed the planned vote.

With­out con­gres­sional action, cur­rent tax rates will expire on Dec. 31, result­ing in a $536 bil­lion tax increase over a decade that would touch nearly all Amer­i­cans. In addi­tion, the mil­i­tary and other fed­eral depart­ments would have to begin absorb­ing about $110 bil­lion in spend­ing cuts.

Fail­ure to avoid the “fis­cal cliff” doesn’t nec­es­sar­ily mean tax increases and spend­ing cuts would become per­ma­nent, since the new Con­gress could pass leg­is­la­tion can­celling them retroac­tively after it begins its work next year.

But grid­lock through the end of the year would mark a sour begin­ning to a two-year exten­sion of divided gov­ern­ment that resulted from last month’s elec­tions in which Obama won a new term and Repub­li­cans retained their major­ity in the House.

The tax issue in par­tic­u­lar has been Obama’s first test of mus­cle after his re-election in Novem­ber. He ran for a new term call­ing for higher taxes on the wealthy, and post­elec­tion pub­lic opin­ion polls show con­tin­ued sup­port for his position.

Boehner’s deci­sion to sup­port higher rates on million-dollar earn­ers marked a sig­nif­i­cant break with long-standing GOP ortho­doxy, but the resis­tance among his rank and file so far has trumped him as well as any man­date the pres­i­dent claims.

Posted by AP News on Dec 27 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.