Washington stirs for ‘fiscal cliff’ talks as Obama heads home

WASHINGTON/HONOLULU,  (Reuters) – Efforts to prevent the U.S. economy from going over a “fiscal cliff” stirred back to life yesterday with less than a week to go before potentially disastrous tax hikes and spending cuts kick in at the New Year.

In a sign that there may be a way through deadlock in Congress, Republican House of Representatives Speaker John Boehner urged the Democrat-controlled Senate to act to pull back from the cliff and offered to at least consider any bill the upper chamber produced.

President Barack Obama will try to revive budget crisis talks – which stalled last week – when he returns to Washington today after cutting short his Christmas holiday in Hawaii.

But the White House and Republicans are still far apart, as hopes for legislation to prevent the economy from tumbling off the fiscal cliff switch to the Senate.

Democrats control a majority in that chamber but still need some support from Republicans across the aisle for a likely attempt to raise taxes on the wealthy.

A senior administration official told reporters traveling with Obama in Hawaii that senior Republican leaders in Congress, Senator Mitch McConnell and Boehner, should step up to head off the looming tax and spending hit.

“It’s up to the Senate Minority Leader not to block a vote, and it’s up the House Republican leader, the Speaker of the House … to allow a vote,” the official said.

Months of congressional gridlock on how reduce the deficit and rein in the nation’s $16 trillion federal debt have begun to affect ordinary Americans.

Shoppers might have spent less this holiday season for fear of looming income tax increases and reports of lackluster retail holiday sales added to the urgency for a deal. U.S. stocks fell yesterday, dragged lower by shares of retail companies.

To avoid defaulting on the national debt if the budget crisis spins out of control, the Treasury Department announced measures essentially designed to buy time to allow Congress to resolve its differences and raise the debt borrowing limit.

Obama flies back from Hawaii overnight and is due in the White House this morning.

Starbucks Chief Executive Howard Schultz is urging workers in the company’s roughly 120 Washington-area coffee shops to write “come together” on customers’ cups today and tomorrow to tell politicians to end the crisis.

“We’re paying attention, we’re greatly disappointed in what’s going on and we deserve better,” Schultz told Reuters.

Boehner and his House Republican leadership team said in a statement that “the Senate must act first.”

That puts the ball in the court of the Democrats in the Senate, which is likely to base any legislation on a bill it passed earlier this year to continue tax breaks for households with incomes below $250,000.

A spokesman for Senate Majority Leader Harry Reid issued a strongly worded statement calling on Republicans to “drop their knee-jerk obstruction.”

“The Senate bill could pass tomorrow if House Republicans would simply let it come to the floor,” the spokesman said.

A Senate bill would likely contain an extension of expiring unemployment benefits for those who have been out of work for extended periods.

More in World News


About these comments

The comments section is intended to provide a forum for reasoned and reasonable debate on the newspaper's content and is an extension of the newspaper and what it has become well known for over its history: accuracy, balance and fairness. We reserve the right to edit or delete comments which contain attacks on other users, slander, coarse language and profanity, and gratuitous and incendiary references to race and ethnicity.

Get the day's headlines from SN in your inbox every morning:

Most Read This Week

  1. Fast food lovers inside KFC yesterday

    KFC back in business

  2. Bibi Shareema (left) and her mother Bibi Shameela in
happier times

    Greenwich Park woman died 44 days after brutally stabbed by ex-partner

  3. Ameer Abdool Subrati

    Man dies after bandits target overseas-based couple at Herstelling

  4. Updated: Man dies after bandits attack overseas-based Guyanese at Herstelling

  5. The building housing the home and grocery

    Bandits invade Alness businessman’s house, shots fired

  6. Barry Dataram

    Datarams getaway passports had been issued to other people

  7. Alimudeen Gobin’s demolished house

    Violent storm lashes No. 19 Village

  8. Bharrat Jagdeo

    Crime has never been this bad – Jagdeo

  9. The ganja found in Prashad Nagar (Police photo)

    Police find 52 lbs of ganja in Prashad Nagar house

Recommended For You