Gerald Herbert, Associated Press
WASHINGTON — 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.
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