President Obama speaks at the White House on Wednesday.(Photo: Alex Wong, Getty Images)
Susan Davis and David Jackson, USA TODAY
WASHINGTON -- President Obama called on Congress to return to Washington next week to approve his proposal to extend tax rate for 98% of Americans to avert the "fiscal cliff" before leaving for Hawaii Friday evening to spend Christmas with his family.
Obama said he spoke with House Speaker John Boehner, R-Ohio, and met with Senate Majority Leader Harry Reid, D-Nev., and asked them to put together a legislative package to extend the George W. Bush-era tax rates for those earning $250,000 or less.
"All of us, every single one of us, agree that tax rates shouldn't go up for the other 98% of Americans," Obama said, "Every member of Congress believes that."
The president's proposal, a focal point of his reelection bid, has met with resistance from congressional Republicans who want to extend all of the current tax rates. Boehner tried and failed to pass a tax bill on the strength of GOP votes alone to extend rates on earners about $1 million. Obama's proposal will need a combination of Republican and Democratic votes to pass a divided Congress.
Obama said he also asked Congress to extend unemployment benefits affecting 2.1 million Americans and he charged leaders with coming up with a package that "lays the foundation" for economic growth and deficit reduction, suggesting broader work to reduce spending and overhaul the tax code will have to come in a multi-step process next year.
The president's remarks come as House Republicans were divided on their party's strategy to avert the "fiscal cliff" and as Boehner and Obama remain at a stalemate on a broader deficit reduction package to avoid the year-end collision of expiring tax rates and steep spending cuts that threaten the U.S. economic recovery.
Obama said he would continue to work with Congress, but that the tax bill should come first. "Let's get that done," he said
Earlier Friday, Boehner said he will continue looking for ways to resolve the "fiscal cliff" even after fellow Republicans rejected his proposed "Plan B."
Referring to Obama and the Democratic-run Senate, Boehner told reporters: "Republicans don't want taxes to go up. But we only run the House. Democrats continue to run Washington."
Internal GOP divisions has shifted the "fiscal cliff" talks to the Democratic-controlled U.S. Senate, where Reid also called on Boehner Friday to take up a Senate-passed bill to extend the tax rates for those earning $250,000 or less.
"If Republicans truly want to ensure American families' taxes don't go up on January 1, they should simply pass the Senate bill," Reid said on the Senate floor. The leader added that any final deal will have to be approved by a bipartisan combination of GOP and Democratic votes.
"No comprehensive agreement can pass either chamber without both Democratic votes and Republican votes," Reid said, "Which means any solution will have to ask the most fortunate among us to pay a little more to reduce the deficit and ensure partisanship doesn't take the nation to the brink of default a few months from now."
The House adjourned for the Christmas holiday. Reid advised senators they will return Dec. 27, while House leaders told their members they would be given 48 hours notice if they have to return to Washington for votes.
Republican resistance to the president's tax plan is weakening in the wake of Boehner's failure to muster enough of his own members to support his alternative plan to avert the cliff, and the looming reality that tax rates will rise for everyone if Washington doesn't act. "I say take the [$250,000 proposal]. Get it done," said Rep. Jeff Flake, R-Ariz., who won a Senate seat and will join the upper chamber in January.
Boehner has ceded his role in the negotiations and put the burden on the president and Reid to find a deal that can pass. "There is no Senate bill that has been sent to the House," Boehner said, If the Senate wanted to act on the House tax bill from August, "we'll take a look at it," he said.
Boehner and House Republican leaders planned to vote on his alternative plan Thursday night, but they abruptly reversed course after it became clear that enough Republicans opposed it, Boehner said, "because there was a perception created that that vote last night was going to raise taxes."
He also nodded at the partisan gridlock in Washington over addressing taxes and spending cuts. "We see a situation where because of the political divide in the country, because of the divide here in Washington, trying to bridge these differences has been difficult," he said.
The speaker said he would keep trying to work out a deal with Obama. "How we get there, God only knows."
Boehner said he did not believe Thursday's failure would hurt his speakership. "If you do the right thing every day for the right reasons, the right thing will happen." The U.S. House will re-elect Boehner speaker on Jan. 3, when the next Congress convenes.