WASHINGTON - The nation's capital stumbled closer to the fiscal cliff Wednesday as President Obama and congressional Republicans dug in deeper on their positions on taxes, even as no face-to-face negotiations took place. No more talks are scheduled.
With hope fading for a deal before Christmas, House Speaker John A. Boehner of Ohio told his Republican colleagues to prepare for a holiday season of tense negotiations.
He told reporters of a "deliberate call" he had with Obama on Tuesday evening after each man rejected the other's latest offer.
"We spoke honestly and openly about the differences that we face," Boehner said. "But the president is calling for $1.4 trillion worth of revenue. That cannot pass the House or the Senate."
The speaker was referring to Obama's latest offer, which reduced his demand for $1.6 trillion in new taxes to $1.4 trillion. Republicans, who have offered $800 billion in new revenue generated by a rewrite of the tax code, responded with a proposal that was virtually identical to their opening bid from weeks ago.
Democrats accused Republicans on Wednesday of seeking a permanent extension of expiring tax breaks for the richest 2 percent of taxpayers, something Obama has rejected; he won reelection after campaigning to end those tax cuts.
Republicans say their proposal to extend the Bush-era tax cuts for one year is a compromise to give lawmakers enough time to overhaul the tax code. Although the GOP does not want to raise rates on the wealthy, party leaders have offered to extract $800 billion from those taxpayers over the next decade by limiting their deductions and other tax breaks.
Ben S. Bernanke, the chairman of the Federal Reserve Board and inventor of the term fiscal cliff, said Wednesday that the economy was already suffering because of uncertainty.
Consumer and business confidence, spending and investment, and hiring are all softer today than they would be without the looming deadline, he said.
And he dismissed the arguments coming from some quarters that it would do little harm to go past the deadline for a few weeks or months. "It would be costly," he said.
Aides said that there were no phone calls between the president and the speaker Wednesday and that the last high-level, face-to-face discussion came Tuesday, when White House legislative affairs director Rob Nabors huddled in the Capitol with senior Boehner aides. No progress was reported.
Rep. Chris Van Hollen (D., Md.) said that the framework of a deal must be in place by the end of this week to ensure its passage by Christmas but that such a timeline was now unlikely.
With a few exceptions, conservatives in the GOP conference object to any plan to raise tax rates. Republicans leaving a meeting with Boehner said the leadership team, so far, has not suggested that it will ask them to back higher rates.