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Obama, Senate to resume talks on fiscal crisis

With time short, there’s still little sense of urgency

Since President Obama signed legislation in late 2010 extending all the Bush-era tax cuts for two years, he has never strayed from his vow to veto any legislation that extends them again for affluent households.

AP/File

Since President Obama signed legislation in late 2010 extending all the Bush-era tax cuts for two years, he has never strayed from his vow to veto any legislation that extends them again for affluent households.

WASHINGTON — With just five days left to make a deal, President Obama and members of the Senate were set to return to Washington on Thursday with no clear path out of their fiscal morass even as the Treasury Department warned that the government will soon be unable to pay its bills unless Congress acts.

Treasury Secretary Timothy F. Geithner, adding to the building tension over how to handle a year-end pileup of threatened tax increases and spending cuts, formally notified Congress on Wednesday that the government would hit its statutory borrowing limit on Monday, raising anew the threat of a federal default as the two parties remained in a standoff.

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Geithner wrote that he would take ‘‘extraordinary measures’’ to keep the government afloat but said that with so much uncertainty over the shape of the tax code and future government spending he did not know how long the Treasury could shuffle accounts before the government could no longer pay some of its creditors.

For months, Obama, members of Congress of both parties, and top economists have warned that the nation’s fragile economy could be swept back into recession if the two parties did not come to a post-election compromise on January’s combination of tax increases and across-the-board spending cuts.

‘‘Nobody wants to go over this fiscal cliff. It will damage our economy. It will hurt every taxpayer. It will be the largest tax increase in history, affect everybody,’’ Representative Ileana Ros-Lehtinen, Republican of Florida, warned on CNN on Wednesday. ‘‘And anyone who’s watching who thinks, ‘Oh, this isn’t going to impact me,’ you will find out that it will.’’

Yet with days left before the fiscal punch lands, both sides are exhibiting little sense of urgency, and new statements Wednesday appeared to be designed more to ensure the other side is blamed rather than to foster progress toward a deal.

After a high-level telephone conference call, House Republican leaders called on the Senate to act but opened the door to bringing to the House floor any last-minute legislation the Senate could produce.

Sounding a warning

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“The House will take this action on whatever the Senate can pass, but the Senate first must act,’’ said the statement issued on behalf of Speaker John A. Boehner of Ohio and his three top lieutenants.

But Senator Harry Reid of Nevada, the majority leader, instead called on House Republicans to pass an existing Senate measure that would prevent tax increases on household income up to $250,000.

“The Senate has already rejected House Republicans’ tea party bills, and no further legislation can move through the Senate until Republicans drop their knee-jerk obstruction,’’ he said in a statement.

Senators will return to the Capitol on Thursday evening with nothing yet to consider. The series of votes waiting for them are unrelated to the fiscal deadline. The House will be gaveled into session at 2 p.m., but since Boehner has not called the members back to Washington, it will most likely be gaveled back into recess shortly thereafter.

The shift to the Senate has focused new attention on Senator Mitch McConnell of Kentucky, the Republican leader and a deal-making veteran. Democrats say they need assurances from McConnell that he will not use procedural tactics to delay any potential bill for an interim solution to avert the fiscal crisis.

But Don Stewart, a spokesman for McConnell, said no one has reached out to begin negotiations. Democrats say that McConnell knows full well what they are proposing: the same Senate bill that passed in July extending all the expiring Bush-era income tax cuts on incomes less than $250,000, setting the tax rate on dividends and capital gains at 20 percent, and stopping the alternative minimum tax from rising to hit more middle class taxpayers. Onto that, Democrats would like to add an extension of expiring unemployment benefits and a delay in across-the-board spending cuts while negotiations on a broader deficit reduction plan slips into next year.

Democrats now suggest that Republicans are content to wait until after the January deadline. On Jan. 3, Boehner is expected to be reelected speaker. After that roll call, he may feel less pressure from his right flank against a deal.

For its part, the Senate may simply be out of time. Without unanimous agreement, Reid would have to take procedural steps to begin considering a bill. He could then be forced to press for another vote to cut off debate before final passage. If forced to jump through those hoops, the 112th Congress could expire before final votes could be cast.

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