WASHINGTON — With talks over the fiscal cliff at a stalemate and a Jan. 1 deadline looming, President Obama last night threw up a Hail Mary pass with a scaled-down plan to avert an economic crisis.
“Call me a hopeless optimist, but I still think we can get it done,” Obama said in a hastily called White House announcement just hours after a jittery Wall Street saw stock prices drop 1 percent over dimming prospects for a fiscal-cliff deal.
Obama called on congressional leaders to whip up by next week a package that prevents tax hikes on family incomes up to $250,000 a year, postpones massive federal spending cuts and extends long-term unemployment benefits.
More complicated issues — like rewriting the tax code, increasing the debt limit and reforming budget-busting Medicare and Medicaid entitlement programs — would be put off until next year.
“That can get done in 10 days,” said Obama, who spoke with House Speaker John Boehner (R-Ohio) and met with Senate Majority Leader Harry Reid (D-Nev.) prior to the remarks.
Obama made the move after Boehner’s so-called Plan B failed to win support of fellow Republicans because it included a tax hike on millionaires.
Boehner’s office slammed Obama’s new plan, saying it failed to balance tax hikes with spending cuts.
“We remain hopeful he is finally ready to get serious about averting the fiscal cliff,” said Boehner spokesman Brendan Buck.
Earlier, Boehner said he was ready to restart negotiations to try to strike a deal. “How we get there, God only knows,” he said.
Obama invoked the Christmas spirit to stir Democrats and Republicans to compromise when they return to Washington next week.
“Everybody can cool off, everybody can drink some eggnog, everybody can have some Christmas cookies, sing some Christmas carols, enjoy the company of loved ones,” he said.
The demise of Boehner’s Plan B, which was yanked before a scheduled vote Thursday night, signaled that the next deal likely will have to pass the Republican-run House with a majority of support from Democrats.
Boehner didn’t rule that out.
Obama declared that to get a deal and avoid a fiscal-cliff disaster, “everybody’s got to give a little bit.”
Still, Obama’s plan included the tax hike on American families making more than $250,000 a year, which was the president’s chief demand and the main sticking point in negotiations with Boehner.
Obama’s new offer even reversed his previous concession to Republicans that would have raised taxes on incomes over $400,000.
President Obama last night rolled out a scaled-down version of a fiscal cliff proposal that House Speaker John Boehner promptly shot down. Obama’s plan:
* Raises revenue by allowing Bush-era tax cuts to expire for family income above $250,000 and individual income above $200,000.
* Extends unemployment benefits set to expire on Jan. 1.
* Includes no changes to entitlement programs like Medicare and Social Security.
* Puts off any action on tax-code reform until next year.