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WASHINGTON — House Speaker John Boehner yesterday told lawmakers to get back to the capital by Sunday in case of an 11th-hour fiscal-cliff deal, sparking a Wall Street rally that helped reverse big losses on the day.
The Dow Jones industrial average had dropped 151 points, but dramatically shot higher in late afternoon in response to the glimmer of hope from Boehner (R-Ohio), ending the day down 66 points.
President Obama, who cut short a family vacation in Hawaii to return to DC, will meet with congressional leaders from both parties at the White House today, their first face-to-face meeting since Nov. 16.
The meeting, announced last night, comes as both sides seemed far from a deal with just four days left to prevent big tax hikes on every American and huge federal spending cuts, mostly to the military.
Economists say that double dose is a sure recipe for recession — a prediction that has left Wall Street and US consumers jittery.
FOLKS FREAK AT SIZE OF TAX HIKES
HOW THE FISCAL CLIFF WILL AFFECT YOU
The severe austerity measures automatically take effect New Year’s Day unless Washington agrees to other measures to reduce the federal debt, now $16 trillion.
Stocks began to tumble early yesterday after Senate Majority Leader Harry Reid (D-Nev.) declared that America was probably going over the cliff’s edge.
“It looks like that’s where we’re headed,” Reid lamented on the Senate floor.
He blamed Boehner for not convening the House sooner and for not taking up a Senate-passed bill that would stop looming tax hikes for family incomes up to $250,000.
“We are here in Washington working, while the members of the House of Representatives are out watching movies and watching their kids play soccer and basketball and doing all kinds of things. They should be here,” he said.
The Democrat-run Senate and the Republican-run House traded blame for the stalled negotiations, as the country and congressional leaders increasingly looked to Obama to lead the way to a compromise.
The chief sticking point remains a demand from Obama and his Democrats for higher taxes on American families earning $250,000 a year or more. Republicans oppose any tax rate increase.
Senate Minority Leader Mitch McConnell (R-Ky.) said he is hopeful for a deal but that it’s up to the president to get it done.
“We’re coming up against a hard deadline here, and . . . this is a conversation we should have had months ago,” he said. “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. It’s not fair to the American people.”
“I say I’m a little frustrated because we’ve been asking the president and Democrats to work with us on a bipartisan agreement for months,” he said. “The phone never rang. And so now, here we are, five days from the New Year, and we might finally start talking.”
The House has passed GOP bills that would avert the cliff by extending all the Bush-era tax cuts and reprogramming the spending cuts.
Boehner told Republican lawmakers on a conference call yesterday that the House would take up whatever fiscal-cliff bill the Senate passes.
He stressed that it is up the Senate to make the next move.
“We expect the Senate to act, presumably with leadership from the president,” said Boehner spokesman Brendan Buck.
Bringing a bill to the House floor does not guarantee it will pass. The House could vote it down or amend it and send it back to the Senate for further consideration.
Last week, Boehner had to withdraw his “Plan B” fiscal-cliff bill after he couldn’t garner support from fellow Republicans because it raised taxes on millionaires.
A bill with a tax-hike threshold of $250,000 would face an uphill battle in the House. It likely would have to pass mostly with support from the Democratic minority and a few dozen Republicans.