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Congressional Leaders Talk More Politics Than Fiscal Deal as Deadline Nears

December 27, 2012 at 12:00 AM EDT
Senate and House leaders Harry Reid, D-Nev., and John Boehner, R-Ohio, traded barbs over who's to blame for a lack of consensus for a budget deal. Margaret Warner talks to WNYC's Todd Zwillich about the looming deadline, only five days away, to avert automatic spending cuts and tax increases.
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MARGARET WARNER: Five days and counting with plenty of tit-for-tat charges, but no agreement in sight, that, in short, summed up the state of affairs in Washington today as the fiscal cliff deadline loomed, Jan. 1. It would mean more than $600 billion in across-the-board tax increases and automatic spending cuts.

SEN. HARRY REID, D-Nev.: Come the 1st of this year, Americans will have less income than they have today, if we go over the cliff, and it looks like that’s where we’re headed.

MARGARET WARNER: This morning, the Senate’s Democratic majority leader, Harry Reid, was blunt about the chances for a deal. And he blamed House Speaker John Boehner.

Just before Christmas, Boehner floated his so-called plan B, letting taxes rise on millionaires. But faced with opposition in Republican ranks, he pulled it, and sent the House home for the holiday. Reid charged today politics explained why the speaker had not yet called the House back.

HARRY REID: John Boehner seems to care more about keeping his speakership than keeping the nation on firm financial footing. It’s obvious, Mr. President, what’s going on. He’s waiting until Jan. 3 to get reelected as speaker before he gets serious with negotiations.

MARGARET WARNER: A Boehner spokesman shot back, “Harry Reid should talk less and legislate more.”

But late today, Republican leaders put out word that the House will reconvene on Sunday. Yesterday, they challenged the Senate to take the next step by extending the Bush-era tax cuts for all income groups.

In a joint statement, they said, “The House will take action on whatever the Senate can pass, but the Senate first must act.”

President Obama returned early from Hawaii today, still pushing to extend tax cuts for the middle class, but raise rates on the well-off. Aides said he made phone calls last night to Speaker Boehner and to House Minority Leader Nancy Pelosi, as well as Sen. Reid and his opposite number, Minority Leader Mitch McConnell.

But late today, McConnell gave no indication of movement.

SEN. MITCH MCCONNELL, R-Ky.: Last night, I told the president we’d be happy to look at whatever he proposes, but the truth is we’re coming up against a hard deadline here and, as I said, this is a conversation we should have had months ago.

And Republicans aren’t about to write a blank check or anything Senate Democrats put forward just because we find ourselves at the edge of the cliff.

MARGARET WARNER: Adding to the urgency, Treasury Sec. Timothy Geithner warned he will have to begin taking extraordinary measures to postpone a government default.

The government is on track to hit its borrowing limit next Monday, he said, with no prospect of congressional action to raise the limit.

And here now to help us unravel what’s going on Todd Zwillich. He’s Washington correspondent for “The Takeaway” on Public Radio International.

Todd, welcome back.

So, decode this for us. Are the players privately as bleak about the prospects as their public statements suggest?

TODD ZWILLICH, WNYC Radio: Not as bleak, Margaret, but bleaker than they were even a week ago. And that’s not terribly encouraging.

The president, as you reported there, flying back to Washington last night, and some members of Congress coming back earlier than others, there will be some meetings here. There have to be some meetings here between the principals that you described there and the president.

There are a couple of options even in these last couple of days, even though it seems like five days is terribly, terribly short. There are some bills floating out there to keep tax rates where they’re at for people making $250,000 and below. That could slide around. There’s a Senate bill that floats around. There’s the president’s offer which could still be amended. Option three, of course, is to go over the cliff and fight this out on Jan. 1.

MARGARET WARNER: Are there any meaningful back-channel negotiations going on?

TODD ZWILLICH: There have been discussions. Leadership aides on both sides say the channels have been open even during the Christmas break.

When the president called Sen. McConnell and others last night, Sen. McConnell made clear to say that’s the first time he’s talked to a Democrat since Thanksgiving.

Now, that sounds like they haven’t been talking at all, but that’s not true, because we all know that the president and the speaker have been engaged in close negotiations and their staffs even closer. Even when the speaker and the president don’t talk, the negotiators do.

MARGARET WARNER: Now, why late today did Speaker Boehner call for the House to reconvene on Sunday?

TODD ZWILLICH: Because he knows that there is going to be something probably to vote on, and even if there’s not, the president has flown back, the Senate is here, the country is watching.

If you were the speaker of the House, would you want your members to be seen as him on vacation sipping champagne on New Year’s Eve, and everybody else is in Washington working?

It’s a combination of optics, for sure, not wanting to be seen as off on vacation, but there is likely to be something that Democrats muster to try to get voted on. It would have to probably get through the Senate first, but John Boehner may need his members here.

MARGARET WARNER: Now, what did — you heard Mitch McConnell refer to, we’re happy to look at anything the president proposes.

What is the president’s role right now?

TODD ZWILLICH: Well, the president ran on tax rates. The president right now, his role is knee-deep, Margaret. There have been other iterations of debt talks, super committee, Biden talks, where you saw the president try to really keep arm’s length from a dysfunctional Congress.

The Congress, the House — the Democratic House and the Republican Senate have proved that they don’t have any common ground on taxes. There’s nothing that one side can agree to that the other side will agree to without a lot of strife.

That’s the president’s role here. Having run on tax increases for people making $250,000 and above, not to mention all that entitlement talk, he ran on it and he won.

He is going to have to fight this out next year for sure. He would like to get some of the math off of the table here if he can.

MARGARET WARNER: Briefly, are there schools of thought in both parties, though, now that they may be — each may think he’s going to be in the stronger position after going over the cliff?

TODD ZWILLICH: Certainly, people on both sides who think that.

Liberal Democrats in particular say this Republican orthodoxy, no tax increases at all, remember, those Bush tax rates all expire on New Year’s Eve, and they say if we go over the so-called fiscal cliff after Jan. 1, take all the tax votes you want. They will all be tax cut votes — tax cut votes.

And there are conservative Republicans who believe that their bargaining position improves. You reported on the debt limit there, which isn’t a concern right now, but becomes more of a concern as February approaches. They think they have leverage there to combine the debt limit with the debate over more spending cuts and more leverage on what they want from taxes.

So there are strong voices on both sides here who say, go over.

MARGARET WARNER: So, we better fasten our seat belts.

Todd Zwillich of PRI, thank you.

TODD ZWILLICH: My pleasure.