Senate Minority Leader Mitch McConnell, R-Ky., left, walks toward the Senate Chamber on Capitol Hill on December 27, 2012 in Washington, D.C. Senators returned to Capitol Hill on Thursday to deal with the looming "Fiscal Cliff."(Photo: Drew Angerer, Getty Images)
House Republican leaders told lawmakers to return to Washington on
Sunday, setting the stage for a dramatic final act in this Congress to
avert the year-end "fiscal cliff."
President Obama has scheduled a
meeting Friday with Senate Majority Leader Harry Reid, Senate Minority
Leader Mitch McConnell, House Speaker John Boehner and House Minority
Leader Nancy Pelosi at the White House.
Reid, D-Nev., earlier
Thursday offered a pessimistic outlook for the chances of sending Obama
legislation before Dec. 31 to avert the budgetary collision of tax hikes
and spending cuts that threaten the U.S. economic recovery.
"Nothing
is happening," Reid warned in a Senate floor speech in which he put
the blame on Republicans if Washington fails to act. "If we go over the
cliff, we'll be left with the knowledge that it could've been prevented
with a single vote in the Republican-controlled House of
Representatives," he said.
Reid wants the House to take up a
Senate-passed bill to extend the current George W. Bush era tax rates
for everyone making $250,000 or less, about 98% of earners, which
President Obama made a central issue of his re-election campaign.
House
Republicans have countered that the Senate could take up House-passed
legislation to extend all of the current tax rates, as well as a
separate piece of legislation that alters the scheduled spending cuts to
protect defense programs in order to avert the "fiscal cliff."
Boehner, R-Ohio, failed to muster enough support within his own party
last week for his alternative "Plan B" that would have allowed tax rates
to increase for those earning $1 million or more. Since then, Boehner
has put the burden on the president and Senate Democrats to come up with
a proposal that can pass a divided Congress.
House Majority
Leader Eric Cantor, R-Va., told lawmakers that the House will return
Sunday and could stay in session until Jan. 2. The 113th Congress will
convene at noon on Jan. 3, scrambling the political dynamic if
Washington fails to reach an agreement before 84 new House members and
12 new senators are sworn in next Thursday. Democrats will have a
stronger hand in the next Congress, gaining eight seats in the House and
two seats in the Senate.
Obama phoned the top four congressional
leaders before he returned to the White House on Thursday after cutting
short his Christmas vacation in Hawaii. It was the first sign that
communication between party leaders--which have been at a standstill
since last week--is restarting in the home stretch.
"Last night, I told the president that we're all happy to look at
whatever he proposes," McConnell said, "but the truth is, we're coming
up against a hard deadline here, and, as I said, this is a conversation
we should have had months ago. And Republicans aren't about to write a
blank check for anything Senate Democrats put forward just because we
find ourselves at the edge of the cliff."
The Senate returned
Thursday. The expiration of tax rates and impending spending cuts are
not the only lingering issues Congress is trying to address.
The
current 2% payroll tax holiday is scheduled to expire, as are
unemployment benefits affecting 2.1 million Americans. The alternative
minimum tax (AMT) patch will also expire, which would make millions of
taxpayers vulnerable to higher tax rates. A popular package of "tax
extenders" affecting businesses, individuals and charitable giving tax
laws are also scheduled to expire, as well as the "Medicare doc fix" a
short-term patch to avoid a scheduled 26.5% drop in payments to
physicians who treat Medicare patients.
The White House also
continues to seek an agreement as part of a "fiscal cliff" deal to lift
the debt ceiling, the nation's borrowing authority, in order to avoid
another showdown with congressional Republicans. In a Wednesday letter
to Congress, Treasury Secretary Timothy Geithner said the $16.4 trillion
debt limit will be met on New Year's Eve, and that "certain
extraordinary measures" will be taken to postpone congressional approval
for an increase.
Some rank-and-file lawmakers expressed optimism
that a deal could be reached on any number of issues before the end of
the year.
"I actually think there's still a chance to get
something done," Rep. Tom Cole, R-Okla., told MSNBC. "You know, these
deals usually come together at the last moment. That's what happened in
the budget deal, the debt ceiling deal. I think that's what's going to
happen again."
Asked why he was optimistic, Cole said, "Well, to
paraphrase Ronald Reagan, there's so much manure around here there's got
to be a pony someplace."
Rep. John Yarmuth, D-Ky., told MSNBC
that action in the next Congress remains a possibility if gridlock
continues. "We have a lot of new members -- 80-something new members --
coming to the House. Some of them are bringing the same kind of mandate
that many of the more conservative Republicans did, but a lot of them
don't. And I think there's going to be a different kind of mentality
here."
He added: "I think a lot of the new members who come here
want to govern rather than just campaign, and so I think things can
happen pretty quickly in January."
USA Today