“I am still ready and willing to get a comprehensive package done. . . . I remain committed to working towards that goal, whether it happens all at once or whether it happens in several different steps,” Obama said.
“But in 10 days, we face a deadline,” he said. Protecting unemployed workers and 98 percent of taxpayers is “an achievable goal that can get done in 10 days.”
With that, Obama and his family boarded a flight to Hawaii for Christmas, leaving congressional leaders to untangle a long-standing political knot: how to push a tax hike of any kind through the fractious Republican House.
One day earlier, House Republicans rejected an alternative tax plan advanced by Speaker John A. Boehner (R-Ohio) that would have prevented taxes from rising on income under $1 million a year. It was torpedoed by conservatives who balked at the prospect of letting taxes go up for roughly 400,000 households.
Passing a bill with a $250,000 threshold would let taxes rise for about 3 million families, a much tougher political lift even in the Democratic-controlled Senate. On Friday, Senate Democrats said they were willing to take a more direct role in the talks, but that a compromise between Obama and Boehner remained critical to moving forward.
“We’re not going to want to come to a deal if we know Boehner isn’t going to move it in the House,” Sen. Charles E. Schumer (D-N.Y.) said. “The two key people are the president and the speaker, and until they come to an agreement, not much else is going to happen.”
While the shape of a deal depends on negotiations over the next few days, the more limited legislation Obama has proposed is likely to be narrowly focused on averting economic upheaval.
Democrats said they would seek to delay automatic spending cuts set to hit federal agency budgets next month. Both parties also want to prevent the alternative minimum tax from ensnaring millions of new taxpayers in April. And they want to preserve an array of expiring tax breaks that includes a popular credit for business research and development.
But a temporary payroll tax holiday will probably end in January, taking an immediate bite out of paychecks for most workers. And without a bipartisan agreement to significantly cut spending, Republicans will not grant Obama an increase in the limit on federal borrowing — which will probably be needed within the next two months if the government is to avoid defaulting on its obligations.