Obama summons Congressional leaders as budget deadline approaches

Up to $250,000

Reid said the House should back Democrats’ plan to extend tax cuts on income of married couples up to $250,000 while letting the tax cuts expire for income above that level. Republicans oppose raising tax rates on any income level.

“I’m neither optimistic nor pessimistic,” Vice President Joe Biden told reporters while leaving the Capitol after swearing in new Democratic Senator Brian Schatz of Hawaii, who succeeded the late Senator Daniel Inouye.

Obama called Reid, McConnell, Boehner of Ohio, and Pelosi of California late Dec. 26 to receive an update on the negotiations, said Amy Brundage, a White House spokeswoman.

Obama’s administration is considering options on the budget and other expiring legislation such as extended unemployment benefits, Representative Steny Hoyer of Maryland, the second- ranking House Democrat, said at a news conference.

All Income Levels

The House passed a bill in August that would extend the expiring tax cuts for all income levels, and another bill Dec. 20 to replace the automatic spending cuts with other reductions. The House hasn’t addressed some expiring provisions, including a scheduled pay cut to doctors under Medicare and expanded unemployment insurance.

The Senate voted in July to extend income tax cuts for one year for individual income up to $200,000 and income of married couples up to $250,000. During talks with Boehner earlier this month, Obama offered to raise that threshold to $400,000.

The U.S. will reach the $16.4 trillion debt limit Dec. 31, Treasury Secretary Timothy F. Geithner said yesterday. Treasury can take so-called extraordinary measures to finance about $200 billion in deficits in 2013.

Typically, that would be enough for two months. Geithner didn’t set a specific deadline because of the lack of certainty about tax rates and spending.

The Senate bill is S. 3412. The House bills are H.R. 8 and H.R. 6684.

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