WASHINGTON (AP)—Stocks fell, congressional leaders squabbled and the fiscal cliff drew implacably closer.
“How we get there, God only knows” said House Speaker John Boehner, referring Friday to the increasingly complicated attempts to beat the January 1 deadline and head off the perilous combination of across-the-board tax hikes and deep spending cuts that threaten to send the economy into recession.
Progress was invisible one day after House Republican rebels thwarted Boehner’s plan to prevent tax increases for all but the nation’s million-dollar earners. And while neither House is expected to meet again until after Christmas, officials in both parties said there was still time to prevent the changes from kicking in with the new year.
Yet they pointedly disagreed which side needed to make the first move.
“It’s time for the speaker and all Republicans to return to the negotiating table,” said Senate Majority Leader Harry Reid, D-Nev. Late Friday, Reid was meeting with Obama at the White House, and Obama was to make a statement.
He said that, for now, Boehner should allow a vote on legislation that would block all tax increases except for individuals making more than $200,000 and couples making $250,000—the position that Obama carried through his successful campaign for re-election.
Reid said it would pass the House with votes from lawmakers from both parties, and, separately, some Democrats said it was possible similar legislation may yet be launched in the Senate.
Moments later, Senate Republican leader Mitch McConnell said Democrats had spent all day yesterday defeating the legislation in the House—even though Boehner himself said it had been deep-sixed by GOP opposition.
Countering Reid’s offer, McConnell said the Senate should pass legislation extending tax cuts at all income levels and requiring a comprehensive overhaul of the tax code. Beyond that, he said, “Look: It’s the president’s job to find a solution that can pass Congress. He’s the only one who can do it.”
Rhetoric aside, the Dow Jones Industrial Average declined 121 points in what analysts said was a reaction to the events in the capital.
The developments marked yet another baffling turn in a week that began with news that Obama and Boehner had significantly narrowed their differences on a plan to erase the cliff. Both were offering a cut in taxes for most Americans, an increase for a relative few and cuts of roughly $1 trillion in spending over a year. Also included was a provision to scale back future cost-of-living increases for Social Security recipients—a concession on the president’s part as much as agreeing to higher tax rates was for the House speaker.
GOP officials said some senior Republicans balked at the emerging terms.