By Michael O'Brien
WASHINGTON, D.C. - The United States was set to go over the "fiscal cliff" at midnight after House Republicans said a series of unrelated votes this evening would be their last for the day.
As of late afternoon on New Year's Eve, negotiators had not yet reached a comprehensive deal to avert the combination of automatic tax hikes and spending cuts that will take effect on Jan. 1. But unless House Republicans decide to add additional votes to the schedule — an option GOP aides said they had not ruled out — the government was all but certain to go over the cliff, triggering automatic tax increases for all Americans and deep cuts in military and discretionary spending.
As the hours dwindled before the midnight deadline, talks between Senate Republicans and the Obama administration had failed to produce an accord. Senate Minority Leader Mitch McConnell, R-Ky., said mid-afternoon that both sides were "very, very close" to an agreement and had, in fact, made a deal allowing taxes to rise on individual income over $400,000 per year, and household income of $450,000 per year.
The sticking point involved the "sequester," the automatic and swift cuts to spending that make up the second prong of the fiscal cliff. Republicans have signaled they might let the sequester take effect unless it was offset by other spending cuts; the GOP has also said it might accept a delay, but only for a few months.
The Obama administration, however, is pushing for a longer delay in implementing the sequester. Otherwise, the president said, replacing those automatic cuts must be "balanced" — shorthand for a combination of new taxes and other spending cuts.
President Barack Obama tried to push talks over the finish line earlier in the afternoon with a statement from the White House.
"Today, it appears that an agreement to prevent this New Year's tax hike is within sight," the president said at the White House. "But it's not done."
In the absence of a broader agreement to resolve the sequester, McConnell appeared in the Senate floor to request a vote only on the tax element of the fiscal cliff.
"Let's pass the tax relief portion now," he said. "Let's take what's been agreed to and keep moving."
But it's not clear that Democrats, who were led in negotiations by Vice President Joe Biden, would agree to de-link the tax debate from other fights over the sequester and extending expiring unemployment benefits past Dec. 31.
House Republicans were careful to note that it was still possible for them to add votes late on New Year's Eve. But they also argued that there was no Senate-passed legislation on which they could schedule a vote, making the prospect of avoiding the cliff all the less likely.
Democratic and Republican sources in the House told NBC News that a final vote on any deal would now most likely wait until afternoon on New Year's Day, or even on Jan. 2.
Though Congress could still conceivably act after New Year's to preserve existing tax rates — thereby limiting any lasting effect on consumers — their inability to reach an agreement until the very last minute could still threaten to rattle the economy and markets.
The House did act late Sunday, though, to clear the way for emergency consideration of Senate legislation if leaders are able to reach an agreement. The House Rules Committee convened with the purpose of dispensing with a rule instilled by Republicans in the early days of 2011 to require that legislation be posted online for a full 72 hours before a vote in the House. GOP leaders had sought that rule to showcase their own transparency, and in reaction to actions by the previous Democratic majority to quickly pass legislation during the health care reform battles of 2010.
Republicans' move to sidestep their own rule underscores the urgency of fiscal cliff talks in the final hours of 2012. There were few ironclad assurances, though, that any Senate agreement would necessarily win the support of the House.
The lurching nature of legislating has been characteristic of the Congress during the last two years, and that's a phenomenon that may well continue into the next Congress, when Democrats will continue to retain control of the Senate, and Republicans will hold a slightly slimmer grasp on the House.