December 28, 2012

Obama calls for last-ditch fiscal cliff discussions

Congressional leaders say they'll talk to the president, but some wonder if there is still time to agree on a deal.


WASHINGTON - President Barack Obama summoned congressional leaders to a Friday summit at the White House in a last-ditch effort to protect taxpayers, unemployed workers and the fragile U.S. recovery from severe austerity measures set to hit in just four days.

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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, Dec. 27, 2012, as he returned early from his Hawaii vacation for meetings on the fiscal cliff. (AP Photo/Charles Dharapak)

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House Minority Whip Rep. Steny Hoyer of Md. gestures during a news conference in Washington, Capitol Hill, Thursday, Dec. 27, 2012, where he urged House Republicans to end the pro forma session and call the House back into legislative session to negotiate a solution to the fiscal cliff. (AP Photo/ Evan Vucci)

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Also Thursday, House Speaker John Boehner, R-Ohio, announced that he would call the House back into session this weekend. And in perhaps the most significant development, Senate Minority Leader Mitch McConnell, R-Ky., for the first time was engaged directly in talks with the White House. He signaled an interest in cutting a deal.

"The truth is, we're coming up against a hard deadline here ... 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," McConnell said in a speech Thursday afternoon on the Senate floor.

"We'll see what the president has to propose," McConnell said. "Hopefully, there is still time for an agreement of some kind that saves the taxpayers from a wholly preventable economic crisis."

This marks just the fifth time since the 1930s that members of Congress have been dragged back from holiday break to a post-Christmas session in Washington.

With uncertainty about a solution producing volatility in the equity markets, aides in both parties expressed hope that legislation could be enacted before the New Year's Eve deadline. They cautioned, however, that quick action would require leaders in both chambers to rally firmly around a specific set of proposals.

Democratic U.S. Rep. Mike Michaud of Maine told the Press Herald that negotiators should have stayed in Washington last week until a deal was complete.

Michaud had planned to vote against Boehner's "Plan B" had it been brought to the floor last week and has supported the Democratic plan to extend the tax cuts only for families earning less than $250,000 a year.

"The lack of progress so far and the last-minute maneuvering not only makes Washington look incompetent, it could also damage our economy and impact millions of people," Michaud said in a prepared statement. "Both sides need to work together, and the finger-pointing and excuses must end."

Rep. Chellie Pingree was among Democrats calling on the House Republican leadership to allow a vote on the Senate-passed plan to extend tax cuts for those earning $250,000 or less.

"If Republican leaders would give us the chance to vote on that, I think it would pass and we could avert this crisis," Pingree said in a statement. "Unfortunately, again and again the roadblock is a group of extremist Republicans in the House who wouldn't even support a deal that gives millionaires a huge tax break."

Pingree is married to S. Donald Sussman, majority share owner of the Portland Press Herald.

One option that could potentially win broad support, aides said, was allowing taxes to rise on household income over $400,000 a year -- Obama's latest offer in negotiations with Boehner -- rather than the lower threshold of $250,000 a year, as Obama proposed during the presidential campaign. Publicly, there was little sign of such a thaw Thursday.

Instead, a sense of gloom pervaded the Capitol. Senate Majority Leader Harry Reid, D-Nev., openly speculated on the Senate floor that there may no longer be time to avoid more than $500 billion in tax increases and spending cuts scheduled to take effect next week.

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