JUMP: Washington Fails to Beat 'Fiscal Cliff' Deadline, Talks to Resume in New Year
Numerous sources report that the House of Representatives will not be able to vote on any Senate deal to avoid the "fiscal cliff" before the midnight deadline tonight, even if the Senate were able to reach agreement, which it has not yet done. The nation will now go over the "fiscal cliff" of tax hikes and spending cuts.
Republicans and Democrats had appeared close to an agreement earlier today, based on allowing the Bush tax cuts to expire for households earning more than $450,000, and allowing other tax rates to rise. Democrats would not, however, agree to significant spending cuts, and balked at Republican proposals to maintain the amount of the sequester, perhaps while while adjusting its composition to protect defense spending.
Markets had rallied on hopes that a deal would be reached. Those hopes seem to have been premature.
Earlier today, President Barack Obama held a press conference at which he did not reveal any new information but, while saying he was hopeful an agreement would be reached, mocked Congress and signaled that he would call for tax hikes in the future. That conference may have poisoned talks in an intensely partisan environment. President Obama did not play a significant role in the final negotiations between the parties.
Polls suggest that the public will blame Republicans for the failure to avoid the fiscal cliff, though disapproval of the President has been rising sharply. The two sides will now hope to resume negotiations even as tax rates rise for all categories of income, spending cuts take effect for defense and for entitlements, and the federal government hits the debt ceiling approved in 2011, as Treasury Secretary Timothy Geithner warned last week.