Reid says brace for the cliff

WASHINGTON - With less than five days remaining until the turn of the year, Sen. Harry Reid said Thursday the nation likely is headed over the fiscal cliff.

With no deal in sight, "I have to be very honest, I don't know timewise how (a fix) can happen now," Reid said.

On New Year's Eve, when the ball drops on Times Square, "it's not going to be a good drop," he said. "Come the first of the year, Americans will have less income than they have today."

Reid, the Senate majority leader from Nevada, made the remarks after the Senate was gaveled into a rare post-Christmas session to await developments that might avoid the "fiscal cliff" of tax increases and automatic spending cuts set to go into effect in the new year.

CNN reported that President Barack Obama was preparing to send Congress a new plan to avoid the cliff, citing unnamed Republican and Democratic sources. Two White House officials denied the report.

In his remarks, Reid continued to apply pressure on House Speaker John Boehner, R-Ohio, who sent House members home for the holidays to await his call back after failing to win support last week for his proposal to avert economic calamity.

The Boehner proposal, which he dubbed "Plan B," would have allowed Bush-era tax cuts to remain in effect for all taxpayers except those with annual income over $1 million. It faced a backlash from Republicans who opposed raising any taxes.

The White House has proposed allowing tax rates to remain lower for families making less than $250,000 a year, raising taxes for people above that level.

The Senate passed that plan over the summer, and Reid said House leaders could solve the impending crisis with "a single vote" in favor of the same bill.

Reid accused Boehner of running a "dictatorship," refusing to allow the House to vote on the Senate-passed bill even though it would probably pass.

The House speaker told lawmakers he would give them 48 hours notice to return to Washington for votes, which Reid said winds the time clock even tighter.

Boehner "should call them back today - he shouldn't have let them go, in fact," Reid said.

Senators "are here in Washington working, while the members of the House of Representatives are out watching movies and watching their kids play soccer and basketball and doing all kinds of things. They should be here," Reid said.

"Senator Reid should talk less and legislate more," Boehner spokesman Michael Steel told the Washington Post. "The House has already passed legislation to avoid the entire fiscal cliff. Senate Democrats have not."

The House passed a bill in August that would extend the tax benefits for taxpayers at all income levels. In May and again last week the House passed a second bill to avert automatic spending cuts on defense programs.

Contact Stephens Washington Bureau Chief Steve Tetreault at stetreault@stephensmedia.com or 202-783-1760. Follow him on Twitter @STetreaultDC.