WASHINGTON/HONOLULU, Dec 26 (Reuters) - President Barack
Obama is due back in Washington early Thursday for a final
effort to negotiate a deal with Congress to avert or at least
postpone the "fiscal cliff" of tax increases and government
spending cuts set to begin next week.
No specific bill dealing with the cliff was on the schedule
of either the U.S. Senate or House of Representatives, which are
expected to return on Thursday after the holiday break.
Investors are closely watching the talks, concerned that going
over the cliff could throw the economy into recession.
Aides and members of Congress have said that a modest,
last-minute measure to avoid the spending cuts and most of the
tax hikes could pass the Democratic-controlled Senate if
Republicans agree not use a procedural roadblock known as a
filibuster, a commitment that Senate Republican leader Mitch
McConnell has so far not made.
But to win approval in the Republican-controlled House of
any bill that raises taxes on anyone, a rare bipartisan vote
would be required. All 191 Democrats would have to team with up
with at least 26 Republicans to get a majority if the bill
included tax hikes on the wealthiest Americans, as Obama is
demanding.
Some of those votes could conceivably come from among the 34
Republican members who are either retiring or were defeated in
the November elections and no longer have to worry about the
political fallout.
In the alternative, Congress could let income taxes go up on
everyone as now scheduled and then during the first week of
January, scramble and get a quick deal to cut them back except
for the highest brackets, along with a measure putting off the
$109 billion in automatic spending cuts that most lawmakers want
to avoid.
Once the clock ticks past midnight on Dec. 31, no member of
Congress would have to vote for a tax increase on anyone - taxes
would have risen automatically - and the only votes would be to
decrease tax rates for most Americans back to their 2012 levels.
Obama and congressional lawmakers left Washington on Friday
for the Christmas holiday with talks to avert the fiscal cliff
in limbo.
Obama is expected to turn to a trusted Democratic ally,
Senate Majority Leader Harry Reid, to help craft a quick deal.
White House aides began discussing details of the year-end
budget measure with Senate Democratic counterparts early this
week, a senior administration official said on Monday