How fiscal cliff talks broke down

The first family arrived in the president's idyllic home state of Hawaii early today to celebrate the holidays, but President Obama, who along with Michelle will pay tribute Sunday to the late Sen. Daniel Inouye at the National Memorial Cemetery of the Pacific, could be returning home to Washington sooner than he expected.

That's because the President didn't get his Christmas wish: a deal with Congress on the looming fiscal cliff.

Members of Congress streamed out of the Capitol Friday night with no agreement to avert the fiscal cliff -- a massive package of mandatory tax increases and federal spending cuts triggered if no deal is worked out to cut the deficit. Congress is expected to be back in session by Thursday.

It's unclear when President Obama may return from Hawaii. His limited vacation time will not be without updates on continuing talks. Staff members for both sides are expected to exchange emails and phone calls over the next couple of days.

Meanwhile, Speaker of the House John Boehner is home in Ohio. He recorded the weekly GOP address before leaving Washington, stressing the president's role in the failure to reach an agreement on the cliff.

"What the president has offered so far simply won't do anything to solve our spending problem and begin to address our nation's crippling debt," he said in the recorded address, "The House has done its part to avert this entire fiscal cliff. ... The events of the past week make it clearer than ever that these measures reflect the will of the House."

Senate Minority Leader Mitch McConnell echoed the sentiment while lamenting the failure to reach a compromise.

"I'm stuck here in Washington trying to prevent my fellow Kentuckians having to shell out more money to Uncle Sam next year," he said.

McConnell is also traveling to Hawaii to attend the Inouye service Sunday.

If the White House and Congress cannot reach a deficit-cutting budget agreement by year's end, by law the across-the-board tax hikes and spending cuts -- the so called fiscal cliff -- will go into effect. Many economists say that will likely send the economy into a new recession.

Reports today shed light on how negotiations fell apart behind closed doors. The Wall Street Journal, citing unnamed sources, reported that when Boehner expressed his opposition to tax rate increases, the president allegedly responded, "You are asking me to accept Mitt Romney's tax plan. Why would I do that?"

The icy exchange continued when, in reference to Boehner's offer to secure $800 billion in revenue by limiting deductions, the speaker reportedly implored the president, "What do I get?"

The president's alleged response: "You get nothing. I get that for free."

The account is perhaps the most thorough and hostile released about the series of unsuccessful talks Obama and Boehner have had in an effort to reach an agreement about the cliff.

Unable to agree to a "big deal" on taxes and entitlements, the president is now reportedly hoping to reach a "small deal" with Republicans to avoid the fiscal cliff.

Such a deal would extend unemployment benefits and set the tone for a bigger deal with Republicans down the line.

In his own weekly address, Obama called this smaller deal "an achievable goal ... that can get done in 10 days."

But though there is no definitive way to say one way or the other whether it really is an achievable goal, one thing is for certain: Republican leadership does not agree with the president on this question.

Of reaching an agreement on the fiscal cliff by the deadline, Boehner said, "How we get there, God only knows."

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Source: http://news.yahoo.com/fiscal-cliff-talks-broke-down-022034980.html

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