NY TIMES By JACKIE CALMES and JONATHAN WEISMAN
Though it has been 45 days since voters emphatically reaffirmed their faith in Mr. Obama, the time since then has shown the president’s power to be severely constrained by a Republican opposition that is bitter about its losses, unmoved by Mr. Obama’s victory and unwilling to compromise on social policy, economics or foreign affairs.
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President Obama, conceding that a “grand bargain” for deficit reduction with Speaker John A. Boehner is unlikely, called Friday for Congress to approve a stripped-down measure by year’s end to prevent a tax increase for all but the richest taxpayers and to extend aid for two million unemployed Americans. “That’s an achievable goal; that can get done in 10 days,” Mr. Obama said....
By Friday, both the House and the Senate had closed for the Christmas break, and soon after his statement Mr. Obama left with his family for their annual holiday trip to Hawaii, his native state. His return date is dependent on events, aides said.But as he and Democrats in Congress envision the coming days, the Senate would reconvene on Thursday to pass a compromise bill with commitments of cooperation from both Mr. Boehner and Senator Mitch McConnell of Kentucky, the Republican minority leader, to keep the process moving.
Facing the Dec. 31 deadline for the expiration of all Bush-era tax cuts, Mr. McConnell would need to promise not to filibuster and Mr. Boehner would have to agree to a House vote on the Senate-passed bill.
Presumably, the sort of fallback measure that Mr. Obama seeks could pass in the House only with strong support from Democrats, since conservative Republicans, by their revolt against Mr. Boehner this week, have signaled that they would not approve even legislation that raises tax rates for fewer than 1 percent of Americans.
While many in both parties believe that Mr. Boehner will permit the vote on a compromise under the intense pressure, with public opinion on the newly re-elected president’s side, doing so could threaten his already weakened speakership among conservatives.
Mr. Obama, backed by Congressional Democrats, is proposing as he has for four years that the Bush tax rates be extended permanently for all income below $250,000 a year. In negotiations with Mr. Boehner he had tentatively agreed to raise that threshold to $400,000, and Congressional Democrats on Friday said they would go as high as $500,000 if it would seal a deal with Republicans.
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While the strategy that Mr. Obama and Mr. Reid are now pursuing requires the acquiescence of both Republican leaders, Mr. McConnell has given no public indication whether he would give it. Asked at the Capitol before Mr. Obama’s statement whether he would agree not to filibuster the stripped-down bill, he stepped onto an elevator and said “Merry Christmas.”
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As Democrats on Capitol Hill described the possible fallback plan, it would be similar to legislation already passed by the Senate to extend the Bush-era tax rates for income below $250,000, increase to 20 percent from 15 percent the tax rate for capital gains and dividend income, and extend some other tax breaks.
The new bill, they said, would also delay the so-called sequester in January — across-the-board spending cuts in military and domestic programs that Mr. Obama and Congress scheduled in mid-2011 as an incentive for the two sides to approve an alternative, more deliberate deficit-reduction compromise. And it would extend federal unemployment benefits for the estimated two million Americans who have been out of a job for long enough to exhaust their initial state aid.
While Mr. Obama said the bill also should provide “the groundwork” for Congress to achieve additional deficit reduction next year through overhauls of the tax code and spending for fast-growing entitlement programs, chiefly Medicare, Congressional Democrats said the likely measure by itself would do nothing to put such efforts in motion.
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By his resort to the stripped-down legislative option, Mr. Obama demonstrated that his and his party’s priority is to prevent the Bush tax cuts from expiring for most Americans. But he might be forfeiting some leverage in the coming fiscal battles early next year over extending the debt limit.
Many Republicans are threatening to withhold support for increasing that limit, as they did in 2011, without Mr. Obama’s agreement to deep reductions in spending for Medicare and Social Security. By both sides’ reckoning, Mr. Obama would have a strong hand in the debt limit debate if it remained tied to the tax issue, given Republicans’ zeal to avoid tax increases.