If Congress does nothing, taxes will go up in 2013 by an average of $3,446 for U.S. households, according to the nonpartisan Tax Policy Center in Washington. Tax filing for as many as two-thirds of U.S. taxpayers could be delayed into at least late March. Defense spending would be cut, and the economy would probably enter a recession in the first half of 2013, according to the Congressional Budget Office.
Tax cuts enacted during George W. Bush’s presidency are scheduled to expire Dec. 31, though the effects of the higher tax rates and federal spending cuts would accumulate over a matter of months. Congress could reverse them by acting retroactively in 2013.
With the calendar closing in, Obama may be aiming for a deal in early January, said Joe Minarik, a budget aide in President Bill Clinton’s administration.
If the president “has the sense that there is a deal that can be struck, he will probably try to glide by the end of the year as smoothly as possible and not send any troubling signals,” Minarik said. “That would seem to be the best option in terms of the effect on the economy.”
Cup of Tea
Asked whether he expected Obama to push a specific proposal at the meeting, Senator Dick Durbin, an Illinois Democrat, said, “He came all the way back from Hawaii, and I’m sure it isn’t just to share a cup of tea.”
House Majority Leader Eric Cantor of Virginia, who announced plans for the Sunday session, said the House may meet through Jan. 2, the day before the next session of Congress will convene. The House held a brief pro-forma session yesterday although most members weren’t in Washington.
The House last convened on a Sunday on March 21, 2010, to vote on Obama’s health-care legislation. The House has met on 16 Sundays since World War II, according to records of the House clerk and historian’s offices.
“We are coming back primarily in the hope that we can fix this,” said Representative Tom Cole, an Oklahoma Republican. “The House is waiting on the Senate to act.”