Obama summons Congressional leaders as budget deadline approaches

President Barack Obama summoned congressional leaders to a White House meeting three days before a year-end deadline to avoid $600 billion in spending cuts and tax increases as lawmakers gave little sign they intend to act together on a budget plan.

Obama, who had been negotiating one-on-one with House Speaker John Boehner, will meet today with Republicans Boehner and Senate Minority Leader Mitch McConnell, and Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi, both Democrats.

The president returned early from his holiday in Hawaii yesterday as lawmakers disputed which party would be responsible for missing the deadline for a debt deal, a failure that could hurt the U.S. credit rating and cause an economic recession. The meeting will be held at 3 p.m. Washington time.

“We’ll see what the president has to propose,” McConnell, of Kentucky, said on the Senate floor yesterday. “Hopefully there is still time for an agreement of some kind that saves the taxpayers from a wholly preventable economic crisis.”

On Capitol Hill, pessimism was the prevailing mood as the deadline for the so-called fiscal cliff approached. The Republican-led House called an unusual Sunday session for the evening of Dec. 30, though the leaders didn’t say what action they planned to take.

Market Reaction

The Standard & Poor’s 500 Index fell for a fifth day, by 0.6 percent to 1,409.20 at 10:08 a.m. in New York. The benchmark index has slipped 1.4 percent this week. The Dow lost 76.24 points, or 0.6 percent, to 13,020.07 today.

The benchmark Treasury 10-year note yield declined four basis points, or 0.04 percentage point, to 1.7 percent at 9:09 a.m. in New York, according to Bloomberg Bond Trader prices.

In today’s meeting, Boehner will “continue to stress that the House has already passed legislation to avert the entire fiscal cliff and now the Senate must act,” Boehner spokesman Brendan Buck said in a statement late yesterday.

Senate leaders took to the chamber’s floor to accuse the other party of refusing to compromise on legislation aimed at trimming the debt.

“We wanted an agreement, but we got no takers. The phone never rang,” said McConnell.

“We have nobody to work with, to compromise,” said Reid of Nevada. “I don’t know time-wise how it can happen now.”

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