Obama reaches out to congressional leaders on ‘fiscal cliff’ talks

With just five days left before the year-end “fiscal cliff” and pessimism mounting that a deal to avert it can be reached, President Obama returned to Washington on Thursday in an effort to jump-start talks after placing late-night calls to Congress’s four top leaders. Obama made calls from Hawaii late Wednesday to Senate Majority Leader Harry M. Reid (D-Nev.), Minority Leader Mitch McConnell (R-Ky.), House Speaker John A. Boehner (R-Ohio) and House Minority Leader Nancy Pelosi (D-Calif.), White House spokeswoman Amy Brundage said. Obama was seeking an update on the state of fiscal cliff talks before departing on an overnight flight back to Washington, Brundage said. The White House provided no details about the conversations. The House is in recess pending action in the Senate, which convened Thursday amid a sense of gloom about chances for a deal to avert more than $500 billion in spending cuts and tax hikes set to hit in January. McConnell “is happy to review what the president has in mind, but to date, the Senate Democrat majority has not put forward a plan,” a spokesman for the Republican leader said. “When they do, members on both sides of the aisle will review the legislation and make decisions on how best to proceed.” Obama landed aboard Air Force One at Joint Base Andrews late Thursday morning Eastern time. Earlier, Reid opened the Senate’s session with a scathing floor speech castigating Republican leaders in the House for not calling their members back to Washington to restart negotiations. He called the chances of going over the cliff increasingly likely. Reid accused Boehner of putting a higher priority on keeping his job as leader of the House than on securing the nation’s economy. He said the only “escape hatch” out of the stalemate would be for Boehner to allow the House the vote on a measure adopted by the Senate over the summer to extend tax cuts for families making less than $250,000 a year. Boehner has said the Senate must move first, and he has asked Democrats to take up a bill passed by the House in August to extend the rate cuts for Americans at all income levels. He has put the House on 48 hours notice to return to Washington but has indicated he has no plans to ask members to return without Senate action. “Nothing can move forward in regards to our budget crisis unless Speaker Boehner and Leader McConnell are willing to participate in coming up with a bipartisan plan,” Reid said. “So far, they are radio silent.” As a result, Reid said, the nation is increasingly unlikely to forestall tax hikes on nearly every American and deep automatic spending cuts on Jan. 1 — provisions that Congress approved in 2011 as a way to force compromise on a deficit-reduction deal. “It looks like that’s where we’re headed,” the Senate Democratic leader said. Reid said Boehner will not bring up the Senate’s bill because he knows it would pass on the votes of Democrats and a handful of Republicans. He charged that the House is now run as Boehner’s own “dictatorship.” “If we go over the cliff, we’ll be left with the knowledge that it could have been prevented with a single vote in the Republican-controlled House of Representatives,” he said. In response, Boehner spokesman Michael Steel said: “Senator Reid should talk less and legislate more.... The House has already passed legislation to avoid the entire fiscal cliff. Senate Democrats have not.” He referred to the bill that the House passed in August to extend tax cuts for all income levels and to a bill passed in May that would avert part of the automatic spending cuts set to hit the military next month by shifting those cuts to domestic programs. House leaders have said the Senate bill that Reid wants the House to take up is not viable because measures that deal with revenue must, by law, originate in the House. Instead, the House leaders want the Senate to send back an amended version of the House legislation. Senate Democrats say the House leaders have the ability to waive the requirement that revenue measures originate in the House. If anything, hope for success appeared to have dimmed over the Christmas holiday. The House last week abdicated responsibility for resolving the crisis, leaving all eyes on the Senate. But senior aides in both parties said Wednesday Reid and McConnell had not met or even spoken since leaving town for the weekend. After failing to persuade their fellow Republicans last week to let taxes rise on income over $1 million, GOP leaders offered no guidance on the shape of a package the House could ultimately accept. “The House will take . . . action on whatever the Senate can pass, but the Senate first must act,” the leaders said in a joint statement. The White House, meanwhile, was working with Reid on an alternative package that would keep Obama’s vow to let taxes rise on income over $250,000. Top Senate aides said their approach also would protect millions of middle-class Americans from having to pay the costly alternative minimum tax for the first time and would keep benefits flowing to 2 million unemployed workers who otherwise would be cut off in January. The measure also could delay deep spending cuts set to strike at the Pentagon and other federal agencies next month. But aides said the scope of the package depends on negotiations with Senate Republicans, and the talks had yet to get off the ground. Unless the House and the Senate can agree on a way to avoid the fiscal cliff, economists fear that the more than $500 billion in automatic tax increases and spending cuts could spark a new recession. Financial markets, already unsettled by the prospect of dramatic tax increases and spending reductions, may also face a new battle over the limit on federal borrowing. Treasury Secretary Timothy F. Geithner announced Wednesday that the debt will hit the $16.4 trillion cap on Dec. 31, leaving roughly two months for Congress to raise it or default on the nation’s obligations.