President Barack Obama on Friday tried to jumpstart stalled talks over how to avert the fiscal cliff, urging congressional leaders to craft a less ambitious deal that keeps tax rates intact for the middle class and extends jobless benefits for the long-term unemployed.
Obama made a seven-minute pitch in the White House briefing room after talking with House Speaker John Boehner, R-Ohio, and meeting with Senate Majority Leader Harry Reid, D-Nev..
“Call me a hopeless optimist, but I actually still think we can get it done,” said Obama, who said he hoped a brief Christmas break would allow lawmakers to “cool off,” enjoy some Christmas cookies and eggnog and “the company of loved ones” while thinking about obligations back in Washington.
“Think about the hardship that so many Americans endure if Congress does nothing at all,” he said. “There are real world consequences to what we do here.”
Bush-era tax rates are slated to expire in a week and a half, and automatic spending cuts are due to take effect Jan. 2, but Obama said he hopes lawmakers will return to Washington next week to meet the deadline. He and the first family were to leave for Christmas in Hawaii late Friday, but Obama – who had planned to stay in his home state until after the New Year, told reporters, “because we didn’t get this done, I will see you next week.”
Obama said his package would set the "groundwork for further work on both growth and deficit reduction." But left undone would be efforts to address the growing deficit and tackle tax reform and entitlement spending. There also would be no resolution to raising the debt ceiling.
The "fallback plan" extends tax cuts for families up to $250,000, extends unemployment insurance, and delays the so-called sequester while lawmakers negotiate.
Nonetheless, Brendan Buck, a spokesman for Boehner, said that although Obama had “failed to offer any solution that passes the test of balance,” Boehner would return to Washington after Christmas “ready to find a solution that can pass both houses of Congress.”
Obama’s plea for a less ambitious package – far less than the grand deficit reduction bargain he and Boehner have sought for weeks – came after 24 hours of turmoil and uncertainty. Boehner’s plan to continue tax rates for all but million-dollar earners could not get enough Republican votes to succeed and was pulled from consideration Thursday.
Obama, echoing the view of congressional leaders, Friday still thought a deal was possible, particularly if members of Congress would listen to their constituents.
“The American people are a lot more sensible and a lot more thoughtful, and much more willing to compromise and give and sacrifice and act responsibly than their elected representatives are,” Obama said.
The president and Democratic leaders have been pushing a plan to continue the Bush-era rates for individuals earning less than $200,000 and families making less than $250,000.
They also want the extended jobless benefits, which expire at the end of this year, to continue, or an estimated 2 million people will lose the aid. Many Republicans insist the price tag be offset with spending cuts.
Reid on Friday urged the House to take up the middle-class tax bill.
“The only reason Speaker Boehner hasn’t brought our bill to the floor sooner is that he knows it will pass,” Reid charged. “Americans are not fooled by the speaker’s phony, procedural excuses for failing to bring this solution to a vote. They’re tired of excuses. They expect action.”
Boehner would rather take up a House-backed plan to continue all the Bush tax cuts. He and other Republicans also want Obama to offer more spending cuts. Democrats counter they’ve already offered plenty and urged the House of Representatives to consider extending Bush-era tax cuts for everyone but those families earning more than $250,000.
Any progress in the days ahead is likely to come in private conversations, perhaps in phone calls between Obama, Reid and Boehner.
While hopes for a deal were still alive, “how we get there, God only knows,” Boehner said.
Obama and Boehner had been close to finding common ground. But Boehner was embarrassed Thursday night, when Republicans refused to give him enough votes to pass his tax-the-millionaires plan and the vote was canceled.
Boehner faces a big hurdle in overcoming his party’s reluctance to embrace measures that are highly unpopular with their constituencies. Democrats face the same problem.
Hardcore conservative Republicans are making it clear they are reluctant to back tax increases even on million-dollar earners. Liberal Democrats have been just as adamant they dislike changes that would reduce Social Security or Medicare benefits.
As a result, lawmakers have to craft a plan that will gain roughly equal numbers of Republican and Democratic votes in each House – not an impossible task, since the 2011 debt limit deal attracted that kind of coalition.
Boehner quickly moved to regain stature Friday, calling a morning press conference and having House Majority Leader Eric Cantor, R-Va., a hero of hardcore conservatives, standing by his side and offering support.
Boehner’s chief message was he wants more spending cuts. He called his latest offer, $1 trillion in new revenue and an equal amount in cuts, his “bottom line.” He wants Democrats, who control the Senate, to make the next move.
“We only run the House,” he said. “Democrats continue to run Washington.”
Obama has offered $1.2 trillion in revenue and a nearly equal amount in spending reductions, but Republicans aren’t buying the spending part. They maintain that too much is interest the White House assumes would be saved and not enough is real trims to government programs.
“The president told me his numbers . . . were the bottom line, that he couldn’t go any further” Boehner said. “And so we see a situation where because of the political divide in the country . . . trying to bridge the differences has been difficult.”
Unless Democrats come up with more cuts, chances are Boehner will be unable to attract sizable Republican support for a deal.
Most Republicans have made it clear they’re unlikely to vote for any tax increases unless Democrats shoulder similar political pain, and they’re freely accusing Democrats of wanting higher taxes to pay for pet programs.
“The president may want to soak the American people to fund his vision of a social welfare state, but we are not going to let him do it,” said Senate Minority Leader Mitch McConnell, R-Ky.
Democrats have their own trouble, as many protest changing the way Social Security cost of living adjustments are calculated.
“It’s a benefit cut – pure and simple,” said Rep. Jan Schakowsky, D-Ill. “It’s particularly devastating for women – who live longer, rely more on Social Security, and receive lower benefits.”
Party leaders acknowledge they could have a problem getting members to back a plan, but are hoping that they can find exemptions, perhaps for poorer recipients, that will win some votes.
“The level of support will depend on what shape this takes,” said House Democratic Caucus Chairman John Larson, D-Conn.
Nothing, though, is likely to become final for awhile. Friday, the House chamber and offices were largely empty, and members had been sent home until further notice. The Senate spent its time wrangling over a disaster aid bill, planned to head home and not return until Dec. 27.
By David Lightman and Lesley Clark