Top senator hints at last-minute ‘fiscal cliff’ action

Olivier Knox
December 17, 2012

A Boxing Day breakthrough? Democratic Senate Majority Leader Harry Reid warned his colleagues on Monday not to make any plans for the day after Christmas, suggesting that lawmakers will be needed at work to take up a possible "fiscal cliff" deal.

"It appears that we're going to be coming back the day after Christmas to complete work on the 'fiscal cliff' and a few other leftover items," the Nevada lawmaker said in a speech on the Senate floor.

Reid frequently threatens late-night votes as well as weekend sessions, and things rarely come to that—lawmakers and those who cover them often joke about "jet fume" votes, cast in haste as senators and representatives head out the door to Reagan National Airport for their flights home.

But his comments came as President Barack Obama and Republican House Speaker John Boehner seemed to be groping toward a compromise deal blending tax hikes on the richest Americans (an Obama priority) with deeper cuts in entitlement spending (a Republican goal).

Absent a breakthrough by Jan. 1, income taxes will rise across the board, the payroll tax holiday will end, some unemployment benefits will dry up, and the government will face deep cuts to domestic and military spending. Economists have warned that, taken together, these steps could push the weak economy into a new recession.