WASHINGTON (AP) - Lawmakers are engaged in a playground game of "who goes first," daring each political party to let the year end without resolving a Jan. 1 confluence of higher taxes and deep spending cuts that could rattle a recovering, but-still-fragile economy.
President Barack Obama returns from Hawaii today to this increasingly familiar deadline showdown in the nation's capital, with even a stopgap solution now in doubt.
Adding to the mix of developments pushing toward a "fiscal cliff," Treasury Secretary Timothy Geithner informed Congress on Wednesday that the government was on track to hit its borrowing limit on Monday and that he would take "extraordinary measures as authorized by law" to postpone a government default.
Still, he added, uncertainty over the outcome of negotiations over taxes and spending made it difficult to determine how much time those measures would buy.
In recent days, Obama's aides have been consulting with Senate Democratic Leader Harry Reid's office, but Republicans have not been part of the discussions, suggesting much still needs to be done if a deal, even a small one, were to be struck and passed through Congress by Monday.
At stake are current tax rates that expire on Dec. 31 and revert to the higher rates in place during the administration of President Bill Clinton. All in all, that means $536 billion in tax increases that would touching nearly all Americans. Moreover, the military and other federal departments would have to cut $110 billion in spending.