U.S. administration urges Republicans not to block 'fiscal cliff' deal

HONOLULU Thu Dec 27, 2012 10:51am IST

The White House is seen from the South Lawn in Washington, May 15, 2012. REUTERS/Larry Downing/Files

The White House is seen from the South Lawn in Washington, May 15, 2012.

Credit: Reuters/Larry Downing/Files

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HONOLULU (Reuters) - As President Barack Obama cut short a Christmas vacation to resume talks to avoid the "fiscal cliff" of automatic year-end tax hikes and spending cuts, the White House on Wednesday called on congressional Republicans not to stand in the way of a resolution in the U.S. Congress.

"It's up to the Senate Minority Leader not to block a vote, and it's up the House Republican leader, the Speaker of the House ... to allow a vote," a senior administration official told reporters traveling with the president.

Obama is seeking a stripped down deal to prevent tax rates from rising on all but the wealthiest Americans and to stop steep across-the-board spending cuts.

The White House last week proposed a broader package that would have let tax rates stay low for those making up to $400,000, a compromise from the president's previous rate hike threshold of $250,000.

House of Representatives Speaker John Boehner was unimpressed with the offer and sought unsuccessfully to push his own proposal through Congress, but members of his own Republican Party balked at rate hikes of any kind. Talks broke down after that and the president and lawmakers left town for the holiday.

The focus will shift to the Senate for a deal, where Obama will rely on an ally, Senate Majority Leader Harry Reid, to work out a bill that the top Senate Republican, Kentucky's Mitch McConnell, will not obstruct. The House must also pass the measure.

A broader effort to trim the nation's massive budget deficit will have to wait, the official said.

Congressional stubbornness risks again damaging the fragile economy, just as the nation's near-default in 2011 - the result of a stalemate over raising the national borrowing limit - dealt a nascent economic recovery a setback, the administration official said.

"If you think about the possibility of Congress failing to act to avert the fiscal cliff, combined with the abomination of what occurred in the summer of 2011, hits to our economy aren't coming from external factors, they're coming from congressional stupidity," the official said.

(Reporting By Mark Felsenthal; Editing by Sandra Maler and Stacey Joyce)

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