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Obama Is 'Hopeless Optimist' on Fiscal Cliff, Scales Back Expectations

After talking to Speaker John A. Boehner and Senate Majority Leader Harry Reid, President Barack Obama said Friday that he still hopes to avert an income tax increase on 98 percent of Americans before Dec. 31. Then the White House promptly announced the president would be leaving Friday evening for Hawaii, where he will spend Christmas with his family.

“Call me a hopeless optimist,” Obama told reporters at the White House about the fiscal cliff. And in a sign that he still believes he will have something to negotiate, Obama ended his statement by saying he’d be cutting his Hawaii trip short. “Because we didn’t get this done, I will see you next week,” he said.

Indeed, both Obama and Reid indicated that they were willing to scale back their expectations for what a fiscal cliff deal might entail when talks resume next week.

Shortly before taking the podium, Obama met with the Nevada Democart at the White House. The duo apparently talked about a “fallback” plan that would extend tax cuts for middle-income taxpayers, as well as unemployment insurance.

A Reid aide said the majority leader agrees with Obama’s position that Republicans should continue negotiating with Democrats on a deal that would avert tax increases on all Americans and automatic, across-the-board spending cuts that are set to take effect in January.

“As a fallback plan to protect the middle class, Republicans should support passing a bill that extends tax cuts for families up to $250,000, extends unemployment insurance and delays the so-called sequester while we negotiate additional policies next year,” the Reid aide said. “But the bottom line is that moving forward on any solution will require cooperation from Speaker Boehner and Senator [Mitch] McConnell. We hope they will return from Christmas ready to cooperate.”

That statement represents a slight shift for Reid, who has repeatedly said he does not want to pass any legislation that just pushes more substantial action on the fiscal cliff to next year. Of course, Boehner tried to pass a “plan B” on Thursday, but abruptly pulled the measure for lack of GOP votes.

Brendan Buck, a spokesman for the Ohio Republican, said Boehner would also return to Washington after the holiday hoping to find a deal.

“Though the President has failed to offer any solution that passes the test of balance, we remain hopeful he is finally ready to get serious about averting the fiscal cliff,” Buck said. “The House has already acted to stop all of the looming tax hikes and replace the automatic defense cuts. It is time for the Democratic-run Senate to act, and that is what the Speaker told the President tonight.”

The president said he believes a deal can be negotiated and passed in the next 10 days that, at a minimum, would do what all parties say they want to do: avoid a tax increase on the middle class. Obama also wants the legislation to extend unemployment benefits and set the stage for deficit and jobs legislation next year.

“All of us, every single one of us, agrees that tax rates shouldn’t go up for the other 98 percent of Americans,” he said. “There is absolutely no reason — none — not to protect these Americans from a tax hike.”

Obama said he hoped the Christmas holiday would help lawmakers reflect.

“Drink some eggnog, have some Christmas cookies, sing some Christmas carols, enjoy the company of loved ones ... [and] think about the obligations to the people who sent us here,” Obama said of the members of Congress who have been unable to reach a deal for two years to avert the fiscal crisis they created.

The president appealed repeatedly to lawmakers to compromise.

“The American people have determined that governing is a shared responsibility. Nobody gets 100 percent of what they want,” he said.

Obama said he is still ready and willing to do a comprehensive deal, “whether it happens all at once or in several different steps.”

He also touched on other priorities he would like to accomplish next year, such as gun safety and jobs legislation, but said lawmakers first must avert the cliff.

He left the briefing room without answering any of the shouted questions on the cliff or the National Rifle Association and gun control.

Senate Minority Leader Mitch McConnell, R-Ky., meanwhile, continued to call on Reid to bring up the House’s tax cut bill, allow for amendments and go to conference with the House. Boehner, too, put the onus on the Senate.

But earlier Friday, Sen. Charles E. Schumer of New York, the No. 3 Senate Democrat, urged Boehner to negotiate with the president and realize that he needs Democratic votes to pass anything.

“There are probably 100, 120, 140 Republicans in the House who are willing to vote for a deal along the lines that both President Obama and Speaker Boehner talked about,” Schumer predicted. “The problem is he was trying to get another 60 to 70 votes and the further right you go the harder it is, so I don’t get the logic.”

Schumer said that without Boehner signing off, the Senate won’t want to act.

“We are not going to want to come to a deal if we know Boehner is not going to move it in the House,” he said. “And Sen. McConnell, I don’t know why he would want his members to put their necks on the line for deal that may not pass the House. So the key to this is the House.”

Humberto Sanchez contributed to this report.

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