House Republican leaders said Thursday that they will bring their chamber back to town this weekend to try to avert the “fiscal cliff” — the sole optimistic sign on a day when pessimism deepened within both parties on whether Congress can avoid the looming tax increases and automatic spending cuts.
Neither side offered a realistic path forward, with Republicans saying that they are waiting on President Obama to send over a scaled-down proposal for review and the White House telling reporters he has no plans to do so.
Late in the day, Mr. Obama invited top leaders to come to the White House on Friday for a meeting, though even that didn’t appear to signal any break in the gridlock that has pervaded for the past two months.
Without a deal, tax rates will increase across the board on Tuesday, followed a day later by $110 billion in automatic spending cuts.
“It looks like that’s where we’re headed,” Senate Majority Leader Harry Reid, Nevada Democrat, said in opening the Senate session, adding that he doesn’t see how any plan could be brought up in his chamber in time to beat the deadline.
Consumer confidence has nose-dived as chances for a deal have dimmed, the Conference Board said Thursday.
Stock markets fell on the news, though they rebounded somewhat by the end of the day.
Progress on Capitol Hill was measured by rumors of proposals and meetings, which neither side would confirm until late in the day.
It was an indicator of just how sensitive negotiations were after conservatives last week scuttled a “Plan B” approach to raise taxes on millionaires, proposed by House Speaker John A. Boehner, Ohio Republican.
After Mr. Boehner’s failure, he said it was up to Mr. Reid and Mr. Obama to write a bill that could win bipartisan support. Sen. Mitch McConnell of Kentucky, the top Republican in the upper house, also said the onus is on Democrats to put something on the floor of the Senate and see whether they can pass it.
“It appears to me the action, if there is any, is now on the Senate side,” Mr. McConnell said.
Mr. Obama cut short his Christmas vacation in Hawaii and returned to Washington on Thursday to be ready to negotiate. Senators returned from a five-day break to debate an intelligence bill and an emergency spending bill for Superstorm Sandy repairs, but it had no action scheduled on the fiscal cliff.
It has been more than a week since either side has engaged in real negotiations. Mr. Obama had bumped up his threshold for tax-rate increases from $250,000 to $400,000 and had agreed to change the formula for calculating cost-of-living increases for Social Security. Mr. Boehner proposed $1 trillion in new taxes from a mixture of increasing rates and eliminating deductions, but he wanted deeper spending cuts in exchange.