Chill Hits ‘Fiscal Cliff’ Talks
(WASHINGTON) -- A chill has descended on Washington, D.C., just in time for Thursday night's lighting of the National Christmas Tree.
President Obama will preside over an evening festival of star-studded carols and sparkling displays of holiday cheer on the White House Ellipse. But don't expect any of the holiday good will to warm the political frost over the "fiscal cliff" talks.
The White House is mandating that tax hikes for the wealthiest Americans must be part of any deficit-reduction deal with congressional Republicans, who stand equally opposed. Negotiations have ground to a standstill.
"There's no prospect for an agreement that doesn't involve those rates going up on the top 2 percent of the wealthiest," Treasury Secretary Timothy Geithner said on Wednesday.
He also said the administration is "absolutely" willing to allow the package of deep automatic spending cuts and across-the-board tax hikes to take effect on Jan. 1 if they don't get some increase in those tax rates.
Obama spoke by phone with House Speaker John Boehner on Wednesday, the first time both men had been in contact in one week. On Monday, Boehner attended a White House holiday party but did not greet the president.
Republicans say Obama has fixated on tax hikes for the rich at the exclusion of entitlement program reforms to curb spending, which they are seeking as part of a "balanced" deal.
"The president talks about a balanced approach, but he's rejected spending cuts that he has supported previously and refuses to identify serious spending cuts he is willing to make today," Boehner said on Wednesday. "This is preventing us from reaching an agreement."
As the showdown continues, Obama will take his tax argument on the road to Virginia, visiting the home of a middle class family to highlight the importance of lawmakers extending current, lower tax rates for 98 percent of U.S. earners.
Both parties agree they should be extended before they expire at the end of the year, but they remain tangled in the broader debate over spending cuts and upper-income tax rates.
The average American family of four would pay an estimated $2,200 more in taxes next year if the rates for middle-income earners are not extended.
Economists say a failure to resolve the standoff before Dec. 31 could thrust the U.S. economy back into a recession -- a prospect many Americans are also worried about, according to a new poll.
Fifty-three percent of voters say lawmakers' failure to avoid the "cliff" would be "bad for their personal financial situation," compared to just 13 percent who said it wouldn't, according to the Quinnipiac University Polling Institute.
The same poll found a majority -- 53 percent -- trusting Obama and Democrats more than Republicans to work out a deal in the deficit negotiations.
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