Congressional leaders upbeat about deal to avert ‘fiscal cliff’

By Karoun Demirjian

Friday, Dec. 28, 2012 | 3:07 p.m.

After an hour-long meeting at the White House, congressional leaders from both parties emerged sounding upbeat about the hopes for a deal on the fiscal cliff.

But it won’t be known until Sunday at the earliest if lawmakers can avoid the cliff, meaning this congressional crisis is coming down to the last 24 hours.

Sen. Harry Reid said Friday that he, President Barack Obama, House Speaker John Boehner, Senate Minority Leader Mitch McConnell and House Minority Leader Nancy Pelosi had “a constructive meeting” on ways to avoid letting tax rates rise and automatic government spending cuts go into effect Jan. 1.

“We certainly hope something positive will come from that” meeting, Reid said.

McConnell said he was “hopeful and optimistic” that the meeting would give way to a deal to avoid the cliff.

But they offered no details, only a promise that they would continue to hash matters out and present what emerges to their respective groups on Sunday afternoon.

The deal-making will, if it happens, will start in the Senate.

Reid said earlier that the only way he would accept a deal is if Republicans in the Senate promised not to filibuster it — a move that may have allowed Reid to cull a majority solely on the back of Democratic votes.

That’s how Reid got his main proposal in the fiscal cliff debate — a bill to extend current tax rates only up to $250,000 — through the Senate in July. Reid has insisted these last few weeks that the House passing that bill was the only way to avert the fiscal cliff.

The House has objected to the bill as a ploy to raise taxes on the rich.

After Jan. 1, however, the Senate’s proposal — and all other proposals that have been on the table to extend tax rates — will technically be bills to lower taxes for certain income brackets. Absent congressional action by then, tax rates rise on Jan. 1 anyway.

The $250,000 threshold is just one of many on the table.

In the week before Christmas, Obama offered to extend current tax rates permanently for income levels up to $400,000.

Boehner objected, countering with a proposal to extend tax rates for incomes up to $1 million, but Democrats refused to vote for it, and Boehner failed to get the necessary Republican support to pass it without them.

If there is a deal to be struck, Boehner will likely need the support of House Democrats to get it through Congress. Members of the House will also be back in Washington, D.C., on Sunday, which should accelerate the pace of conversations.

But it appears they may remain fairly caustic.

“Whatever we come up with is going to be imperfect. Some people aren’t going to like it, some people are going to like it less, but that’s where we are,” Reid said. “We’re going to do the best we can.”