President Barack Obama has been accused by a senior Republican of being eager to take the US over the fiscal cliff for political gain, as Washington edges closer to a year-end deadline with no deal in sight.
Speaking on Fox News Sunday, Senator John Barrasso, the third-highest ranking senator in the GOP, suggested that the president "sensed victory at the bottom of the cliff".
Earlier, Obama called on Congress to "cool off" over the holiday break, amid rising rhetoric on both sides. On Friday, the White House raised the prospect of settling for a stopgap measure to avert the punitive tax rises and swingeing spending cuts which are due to come in effect on 1 January. The president had previously pushed for a grand compromise to avoid the so-called fiscal cliff.
Asked if he believed that the US was heading towards missing the deadline, and thus falling off the fiscal cliff, Barrasso said: "I believe we are. I believe the president is eager to go over the cliff for political purposes. He senses a victory at the bottom of the cliff. I think it hurts our county and it hurts our economy."
Speaking on the same show the Democrat senator Kent Conrad, chairman of the Senate budget committee, held out some hope of a comprehensive solution ahead of 1 January, rather than scaled-down package that could merely kick the debate into 2013.
"I would hope we have one last attempt," he said.
Conrad suggested that the two sides could come to a compromise somewhere between the president's last offer and a plan that was put forward by John Boehner, the Republican speaker of the House of Representatives.
Obama had been pushing a plan that would have seen tax revenues rise by $1.6tn over the next decade, with a hike in the rate for those earning upwards of $250,000 a year central to proposals. Boehner has argued that such a move would be a "crippling blow" and that it was not accompanied by a large enough swipe at federal spending.
His "plan B" would have pushed more limited tax increases on those earning in excess of $1m. But even that was not enough to assuage Tea Party-backed Republicans in Congress, who rebelled against the proposal on Thursday.
The White House has indicated that it is willing to move the threshold for those targeted for more tax to $400,000. But with anti-tax House representatives in no mood to compromise it is uncertain if this offer, or even a greater concession by Democrats to move the line to $500,000, will get much traction in the House.
Obama is currently on holiday in Hawaii. Before leaving he urged both sides of the aisle to have a rethink over the consequences of not reaching a deal.
The fiscal cliff represents some $600bn worth of spending cuts and tax increases which will hit all Americans which are due to be automatically triggered on 1 January, in the event of no deal over how to stabilise national debt. Experts have warned that the situation would be catastrophic for the fragile US economic recovery.
"Now is not the time for more self-inflicted wounds, certainly not those coming from Washington," Obama said on Friday. As such he urged Democrats and Republicans to "cool off" over the Christmas break and return to Congress in a mood to compromise.
Aides have said that despite being on vacation in Hawaii, the president will be receiving regular briefings on the state of talks and is prepared to come back to Washington early, if events demand.
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image: © Aaron Logan
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