WHITE HOUSE — President Barack Obama is urging Congress to reach an agreement to avoid the tax increases and deep government cuts that are set to take effect Tuesday. The next move in the fiscal drama is up to the Senate.
In his weekly radio and Internet address, Obama said the U.S. economy cannot afford what he called “a politically self-inflicted wound.”
“The housing market is healing, but that could stall if folks are seeing smaller paychecks. The unemployment rate is the lowest it has been since 2008, but already, families and businesses are starting to hold back because of the dysfunction they see in Washington,” said the president.
The leaders of the Senate, Democrat Harry Reid and Republican Mitch McConnell, are working through the weekend to find an agreement to reduce the U.S. deficit and avoid the so-called “fiscal cliff.” They could have legislation ready for a Senate vote on Sunday or Monday.
Both leaders expressed optimism that a deal could be reached after they met Friday with Obama at the White House.
The president, in his Saturday address, said he believes the senators may be able to work out an agreement that can pass Congress before the deadline.
If not, Obama has said he wants Reid to introduce legislation to avert some of the consequences of missing the deadline.
In the Republican Party response, Senator Roy Blunt of Missouri said he also has faith that a deal can be done, but it is up to Democrats to take the lead.
“Fortunately, going over the fiscal cliff is avoidable. There is not much time, but there is still time to act. Both President Obama and Senate Majority Leader Harry Reid have claimed that an achievable plan is one that can pass both houses of Congress, and Republicans agree,” said Blunt.
The president met Friday with Reid and McConnell, as well as House of Representatives Speaker John Boehner and House Minority Leader Nancy Pelosi. It was his first meeting with all four congressional leaders since November 16.
Vice President Joe Biden and Treasury Secretary Tim Geithner also were in the meeting.
The Democratic-led Senate returns to session Sunday afternoon, at which time Reid hopes to have an agreement ready for a vote. Any deal that passes the Senate must then clear the Republican-led House, which returns to session later on Sunday.
Obama is proposing to cut the federal deficit, partly by raising taxes on Americans making more than $250,000 a year. Republicans had called for a threshold of $1 million.
Republicans have campaigned for spending cuts in government social programs, something Democrats strongly oppose. Democrats want to shrink the defense budget, an idea Republicans reject.
If no agreement is reached by the end of Monday, Americans will be hit with an estimated $600 billion in tax increases and severe government spending cuts, and unemployment benefits will be halted.