Amid growing public pessimism that a fiscal cliff compromise is possible and uncertainty in Washington about where it would even begin, Congress is preparing to make a last attempt to act before large automatic tax increases and automatic spending cuts take effect.
Lawmakers were trickling back to Washington on Wednesday with only unsettled ideas for addressing the looming fiscal crisis after taking a break for Christmas.
The Senate was scheduled to return to business Thursday, but that business is to consider amendments to a reauthorization of the Foreign Intelligence Surveillance Act. The House was scheduled to meet only in a pro forma session after Republican leaders said the onus was now on the Senate to produce a legislative solution after their own bid fell apart in the fractured GOP caucus last week.
In a joint statement released Wednesday afternoon, the House GOP leaders repeated that position, noting the Senate has yet to act on two bills the House has passed so they will wait for that to happen and react accordingly.
“The Senate first must act,” they said. “The lines of communication remain open, and we will continue to work with our colleagues to avert the largest tax hike in American history, and to address the underlying problem, which is spending.”
House GOP leaders have promised to give members 48 hours notice before calling them back to the Capitol. They have not given that notice and are still discussing scheduling decisions, a House leadership aide said Wednesday.
Because it could take weeks for households to feel the effects of the austerity measures, policymakers may be bracing for a brief trip over the cliff. According to a Gallup poll released Wednesday, Americans are considerably less confident Congress will reach a solution by Jan. 1 than they were earlier in the month, with 50 percent saying that a deal is very or somewhat likely and 48 percent saying an agreement will probably not be made.
Still, nearly all political leaders have signaled a desire to pass some sort of fiscal package in the coming days, and the potentially harsh judgment of voters and financial markets may spur action as the deadline nears.
Exactly what sort of legislation could move quickly through the Republican House and Democratic Senate remains uncertain.
After weeks spent trying to resolve long-term budget problems with House Speaker John A. Boehner, R-Ohio, President Barack Obama is pushing for a less ambitious package that extends tax cuts on household income below $250,000, continues unemployment benefits and delays the across-the-board spending reductions.
A scaled-down deal could also include a patch for the alternative minimum tax that indexes it to inflation for 2012, a one or two-year renewal of various, targeted tax breaks known as “extenders,” and a temporary Medicare adjustment to prevent payment cuts to doctors.
Options, No Solution
Whether any solution can win enough support to get through both chambers remains unclear, and the legislative efforts behind the scenes may be patched together to position lawmakers in a round of finger-pointing that will come if no deal is reached.
Under one scenario, the Senate could pass a bill and then dare the House to reject it in the face of growing public pressure.
Terri Henderson, 6, center, whose mother is El Salvador, attends a rally with members of Congress at Union Station's Columbus Circle to announce the Restore Opportunity, Strengthen, and Improve the Economy (ROSIE) Act on July 29, 2014. The legislation provides incentives for government contractors to pay a living wage and other benefits that would help low-income workers.