Just two more days until the federal government drives over the fiscal cliff — and there’s not a guardrail in sight.
Congressional leaders worked behind closed doors yesterday to avert automatic tax hikes and spending cuts that could send the economy careening back into recession.
But there were no breakthroughs, and time is running out to push even a scaled-down package through a gridlocked Congress before a Jan. 1 deadline.
Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.) were reported in last-ditch negotiations after President Obama and House Speaker John Boehner failed to reach a deal.
But there was no indication that Reid and McConnell were making any progress.
If they’re able to strike an agreement, the pair will try to sell the deal to their members during caucus lunches today, when the Senate is set to be in the Capitol for a rare Sunday session.
The House is also returning to session Sunday, but Boehner has made clear he won’t bring anything to the floor until the Senate acts.
If Reid and McConnell can’t make a deal, Reid will push for a vote on a plan to avert the tax hikes on families earning less than $250,000.
That could put great pressure on Boehner and other House Republicans to pass such a bill, which would protect most Americans before everyone sees their taxes go up on Jan. 1.
“Leaders in Congress are working on a way to prevent this tax hike on the middle class, and I believe we may be able to reach an agreement that can pass both houses in time,” Obama said in his weekly address yesterday. “We just can’t afford a politically self-inflicted wound to our economy.”
Congress finds itself in this mess because of its failure last year to reach a deficit-reduction deal.
Instead, the House and Senate set up hundreds of billions in automatic spending cuts that would take effect Jan. 1, at the same time the Bush-era tax cuts and extended benefits to the unemployed expired.
On Wall Street, stocks dipped for five straight days last week as investors displayed their fear of going off the cliff.
Republicans and Democrats seemed most likely to compromise on whether the Bush tax cuts would end for people in upper tax brackets.
Republicans want to avoid tax increases on all earners, while Obama has publicly insisted the Bush tax cuts expire for families earning more than $250,000 per year.
A threshold higher than $250,000 could bring at least some Republicans on board to a tax deal.
Obama will have a chance to hammer the GOP from a TV bully pulpit today as he appears on NBC’s “Meet the Press. ” It would be only his second appearance on the show as commander-in-chief.