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Obama, top lawmakers meet over fiscal cliff

 President Barack Obama waves to reporters as he steps off the Marine One helicopter and walks on the South Lawn at the White House in Washington, Thu...
 President Barack Obama walks down the the lower steps instead of the usual longer stairway from Air Force One upon his arrival at Andrews Air Force B...
 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 Wa...
 President Barack Obama walks down the the lower steps instead of the usual longer stairway from Air Force One upon his arrival at Andrews Air Force B...
 President Barack Obama returns a Marine honor guard's salute as he steps off the Marine One helicopter and walks on the South Lawn at the White House...

Obama

President Barack Obama waves to reporters as he steps off the Marine One helicopter and walks on the South Lawn at the White House in Washington, Thu...

Obama

President Barack Obama walks down the the lower steps instead of the usual longer stairway from Air Force One upon his arrival at Andrews Air Force B...

Obama

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 Wa...

Obama

President Barack Obama walks down the the lower steps instead of the usual longer stairway from Air Force One upon his arrival at Andrews Air Force B...

Obama

President Barack Obama returns a Marine honor guard's salute as he steps off the Marine One helicopter and walks on the South Lawn at the White House...

President Barack Obama presented a proposal to avoid tax hikes for middle-class Americans to Congressional leaders during a high-stakes meeting Friday afternoon. The last-chance effort aimed to avoid the drastic austerity measures known as the "fiscal cliff" that automatically begin next week and threaten the U.S. economy's fragile recovery.
As the Jan. 1 deadline nears, lawmakers and White House officials held out slim hope for a deal to avoid tax increases for most Americans and deep spending cuts.
The meeting lasted a little over an hour and Obama planned to make a statement at 5:45 p.m. EST (2245 GMT).
Congressional Democrats said Obama was ready with a revised offer to present.
But that drew a denial from a person familiar with the talks, who said the president would review his proposal from a week ago, when he urged lawmakers to preserve tax cuts for most while letting rates rise above incomes of $250,000 a year. At the same time, Obama said lawmakers should extend unemployment benefits for the long-term jobless. The person was unauthorized to discuss the private meeting publicly and spoke on condition of anonymity.
House of Representatives Speaker John Boehner, Senate Republican Leader Mitch McConnell, Senate Democratic Leader Harry Reid and House Democratic Leader Nancy Pelosi were all attending Friday's White House meeting. Vice President Joe Biden and Treasury Secretary Timothy Geithner also were attending.
Obama's Friday meeting with Congressional leaders _ the first since Nov. 16 _ started at 3:10 p.m. (2010 GMT). The president, who had cut short his Hawaiian holiday to return to Washington, called for the meeting as top lawmakers blamed each other while claiming to be open to a reasonable last-minute bargain. It was likely to center on which income thresholds would face higher tax rates, extending unemployment insurance and preventing a cut in federal Medicare payments to doctors, among other issues.
For Obama, the eleventh-hour scramble represented a test of how he would balance strength derived from his re-election against an avowed commitment to compromise in the face of divided government. Despite early talk of a grand bargain between Obama and Boehner that would reduce deficits by more than $2 trillion, the expectations were now far less ambitious
Both the White House and Congress are in this situation because of their inability, or unwillingness, in recent years to come to terms with the country's chronic deficit spending. A bitterly divided Congress hasn't helped.
Adding pressure is this week's warning from Geithner that the government would hit its $16.4 trillion borrowing limit on Monday, the final day of the year. That would make it harder for the U.S. to pay its bills.
Republicans and Democrats said privately that any agreement would likely include an extension of middle-class tax cuts that had been set to expire at the end of the year, with increased tax rates at upper incomes _a priority that was central to Obama's re-election campaign.
A key question was whether Obama would agree to abandon his insistence during his re-election campaign on raising taxes on households earning more than $250,000 a year and instead accept a $400,000 threshold like the one he has offered in negotiations with Boehner.
The deal also would likely put off the scheduled spending cuts and extend expiring unemployment benefits, officials said.
Even to reach a lesser deal now, Obama and Reid would have to propose a package that McConnell would agree not to block.
McConnell on Thursday warned, "Republicans aren't about to write a blank check for anything the Democrats put forward just because we find ourselves at the edge of the cliff."
Nevertheless, he said he told Obama in a phone call late Wednesday that "we're all happy to look at whatever he proposes."
If a deal were to pass the Democratic-controlled Senate, Boehner would have to agree to take it to the floor in the Republican-controlled House.
Boehner discussed the fiscal cliff with Republican members in a conference call Thursday. Rep. Tom Cole, an ally of the speaker, did not rule out Republican support for some increase in tax rates _ which Republicans have adamantly opposed for decades.
If a deal is not possible, it should become evident during Friday's meeting. If that occurs, Obama and the leaders would leave the resolution to the next Congress to address in January.
Such a delay could unnerve the stock market, which was down again Friday amid the developments in Washington. Economists say that if the tax increases are allowed to hit most Americans and if the spending cuts aren't scaled back, the recovering but fragile economy could sustain a shock.
But a sentiment is taking hold that Congress could weather the fiscal cliff without significant economic consequences if it acts decisively next month.
The debate over spending cuts, however, would have to start anew.
___
Associated Press writers Jim Kunnhehn, Alan Fram, Charles Babington and David Espo contributed to this report.


Updated : 2021-07-25 09:06 GMT+08:00