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December 21, 2014

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Fiscal cliff: House, Senate leaders — minus Boehner — prepare to meet Obama

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Jacquelyn Martin / AP

Senate Majority Leader Harry Reid of Nev., second from left, accompanied by, from left, House Minority Leader Nancy Pelosi of Calif., House Speaker John Boehner of Ohio and Senate Minority Leader Mitch McConnell of Ky., gestures as he speaks to reporters outside the White House in Washington, Friday, Nov. 16, 2012, following a meeting with President Barack Obama to discuss the economy and the deficit.

As the days tick down to the fiscal cliff deadline, Washington’s focus is turning toward the Senate.

In part, that’s because it's the only show in town.

Republican House Speaker John Boehner announced Thursday that he would call the House back to Washington, D.C., for Sunday evening — a little more than a day before the Jan. 1 deadline when tax rates will rise and scheduled government cuts known as sequestration will go into effect.

For weeks, the negotiations to avoid the fiscal cliff centered on a series of meetings between President Barack Obama and Boehner. But that process fell apart last week, when Boehner publicly rejected a compromise offer Obama put on the table — and then publicly failed to come up with the Republican votes to get his own “Plan B” counteroffer through the House.

Since then, Obama has met privately on the fiscal cliff with Senate Majority Leader Harry Reid. He has called Senate Minority Leader Mitch McConnell for the first time since Thanksgiving. And on Friday, he will be including them — and House Democratic leader Nancy Pelosi — in the first fiscal cliff summit meeting all four have held at the White House in over a month.

It’s all part of a last-ditch effort to avert the increased tax rates, government spending cuts and national debt limit the fiscal cliff would usher in.

But Senate leaders can’t seem to make up their minds about whether they should be cautiously optimistic or cautiously pessimistic about their chances of striking a deal.

On the one hand, Reid and McConnell know that if Congress misses Tuesday's deadline, the country is not going to come to a screeching halt as it might during a government shutdown.

The fiscal cliff will take weeks to hit people in the paycheck, and months to deliver the full brunt of its promised sucker-punch to the economy.

But on the other hand, maintaining the sense of do-or-die urgency about the fiscal cliff is essential to keeping the political high ground.

On Thursday morning, Reid warned the country to brace itself for smaller paychecks “if we go over the cliff, and it looks like that’s where we’re headed.”

Thursday afternoon, McConnell sounded slightly more upbeat.

“The truth is, we’re coming up against a hard deadline here,” McConnell said. “Hopefully there is still time for an agreement of some kind that saves taxpayers from a wholly preventable economic crisis.”

But preventable how? Republican and Democratic leaders in the Senate can’t seem to agree on that any more than Boehner and Obama could.

Reid is charging that it is Republican recalcitrance keeping the country on the edge of the fiscal cliff with a bill to extend tax cuts for income levels below $250,000, calling Boehner a “dictator” who refused to hold a vote on the measure because with the help of Democrats, “it will pass.”

McConnell, meanwhile, defended Boehner, saying Republicans “stepped way, way out of our comfort zone” in floating a compromise to extend tax cuts on income levels below $1 million. (It never came up, as Boehner could not get enough Republican votes to carry it.)

He also chided Reid for acting as if Democrats were being either bipartisan or realistic by calling for their $250,000 bill — which, he said, doesn’t pass constitutional muster.

“The so-called Senate bill is nothing more than a glorified Sense of the Senate resolution. So let’s just put that convenient talking point aside from here on out,” he said. “Republicans aren’t about to write a blank check for anything Senate Democrats put forward just because we find ourselves at the edge of a cliff.”

McConnell said he would happily listen to what Obama has to offer on Friday, when congressional leaders sit down with the president.

But if anything, Obama and Democrats in Congress appear to have moved closer together since last week, when Obama was offering Boehner a deal to extend tax rates up to $400,000, avoid government cuts in the Defense Department and finance part of the deal with an amended formula to calculate Social Security payments.

Just before Christmas, Obama said he was prepared only to extend cut tax rates up to $250,000, while deferring the sequestration cuts.

If Friday’s meeting does result in a new way forward, it will be up to Reid and McConnell to test its efficacy, both in their caucuses and in their public statements, in the 48 hours between that meeting and the House of Representatives’ official return to Washington.

What reception they get could determine if there is a way to avert a fiscal crunch, or whether solutions will simply have to wait until the new year.

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