After the White House meeting everyone had described as critical amid the impending fiscal cliff, optimism seemed to be the word of the day. “I’m hopeful and optimistic,” said Senate Minority Leader Mitch McConnell. For his part, President Obama described himself as “modestly optimistic that an agreement can be achieved” following a “good and constructive” meeting with the congressional leadership.
As expected, whether there will be a deal or not seems largely up to the Senate as McConnell and Majority Leader Harry Reid formally agreed to move forward with negotiations through the weekend to bring the Senate back into session Sunday. Any deal will likely prevent income taxes from increasing for most Americans while keeping unemployment benefits for around 2 million people and likely protect doctors from a cut in Medicare reimbursements, according to the Washington Post. But there is still no consensus on the threshold for income tax increases as well as the estate tax.
"The hour for immediate action is here," Obama said in a televised address (watch the statement after the jump). But even if leaders can’t reach a deal, Obama said Congress should allow an “up-or-down vote” on a basic package that would prevent tax cuts from increasing for Americans making less than $250,000 a year and extend unemployment benefits, reports the Hill.
“I believe such proposals could pass both houses with a bipartisan majority as long as both leaders will allow it to come to a vote,” Obama said. “If members want to vote no, they can.” In an effort to keep pressure on lawmakers, Obama will discuss the latest on the “fiscal cliff” during an appearance on NBC’s Meet the Press Sunday, reports Reuters.
For all his talk of optimism though, the president also expressed lots of frustration that a deal still appears elusive days before a deadline that lawmakers have known about for more than a year, points out the New York Times. “The American people are not going to have any patience for a politically self-inflicted wound to our economy,” Obama said.
But in what could be a sign that a deal might be possible, “for the first time in weeks, Reid’s tone turned more positive” as he talked of a potential compromise, points out Politico. Reid said members of both parties would undoubtedly object to some portion of a compromise agreement. “Whatever we come up with is going to be imperfect,” he said.
Investors seemed to be betting Friday that lawmakers won’t reach a deal as stocks dropped for a fifth straight day and Treasuries rose, reports Bloomberg. The S&P 500 lost 1.1 percent, its biggest drop since November, while the Dow Jones industrial average dropped 1.21 percent.