Congress reconvenes, fiscal crisis looms

After a seven-week pause, Congress returns to a crowded agenda of unfinished business overshadowed by the urgent need for President Barack Obama and lawmakers to avert the economic double hit of tax increases and automatic spending cuts

The Congress and the president get back to work today for the first time since the election last week and their agenda includes the daunting task of stitching together a compromise on spending and taxes.

WASHINGTON  — The U.S. Congress clanks and grinds back into session Tuesday for the first time since the election last week, confronting the huge and immediate task of stitching together a compromise on spending and taxes to avoid what's been called the "fiscal cliff," a series of actions starting Jan. 1 that threatens another recession and higher unemployment.

Will a politically strengthened President Barack Obama be ready to give ground after his strong second-term victory? The same question goes for opposition Republicans who remain in control of the House of Representatives.

Obama was kicking off a series of meetings in Washington this week with labor officials, business executives and congressional leaders aimed at pushing Congress to avert the "fiscal cliff." That will include a news conference on Wednesday that will give the president the chance to frame his outlook on the outgoing Congress, which has been criticized as the least productive in recent history.

The president hopes to turn to labor and progressive groups at a meeting Tuesday to build support for what he has called a "balanced" plan to reduce the debt while protecting spending priorities. Separately, a meeting on Wednesday with business executives, many of whom supported Republican rival Mitt Romney, aims at enlisting their help in convincing Republicans to support higher taxes on the wealthy.

Obama has also invited the top four leaders of Congress to the White House on Friday for talks, right before he departs on a trip to Asia.

Also hanging over the political landscape is the largely unrelated but distracting revelation of marital infidelity that drove former Gen. David Petraeus to resign as CIA director days after the elections. Petraeus, one of the most widely respected generals of his generation, left the military and leadership of the U.S. campaign in Afghanistan to run the CIA at Obama's request. The retired general had been mentioned as a possible future Republican candidate for president.

Now the scandal has spread to the top U.S. commander in Afghanistan, Gen. John Allen, who is under investigation for alleged "inappropriate communications" with a woman who received threatening emails from Petraeus' former lover.

That major distraction aside, Washington politicians have just over seven weeks, including breaks for the Thanksgiving holiday next week and the Christmas holidays, to find a way back from the brink of the "fiscal cliff" — the year-end, economy-jarring expiration of tax cuts Americans have enjoyed for a decade, combined with automatic across-the-board reductions in spending for the military and domestic programs.

That outcome — barring legislative compromise by Jan. 1 — is self-imposed punishment for last year's failure by a bitterly divided Congress and White House to deal with the government's spiraling debt and overhaul its unwieldy tax code. The Congressional Budget Office estimates that the austerity program would reduce the deficit by nearly $700 billion by the end of 2013. But the non-partisan organization also says millions of jobs could be lost, which could knock the U.S. economy back into a recession.

Neither Republicans nor Democrats wanted to sign onto any deal in advance of the November election. Now the task falls to what is known as a lame-duck session of Congress, the outgoing legislature that sits after the election but before the newly elected membership is sworn in early next year.

Obama and his primary antagonist, Speaker of the House John Boehner, the most powerful Republican in Washington, have already begun laying out their positions.

The president demands that taxes go up for American households earning more than $250,000 a year. He also says he is willing to see cuts in government spending, although he has not offered specifics.

Boehner and his Republicans — the low-tax, small-government tea party movement in particular — insist that tax rates not be raised for any income level and instead call for even deeper cuts in spending, although the targets of those reductions are unknown.

Both sides have voiced the potential for cooperation, but they face a confrontation over a series of expiring tax cuts approved during the George W. Bush presidency and tough, across-the-board spending cuts set to take place because lawmakers failed to reach a deal to reduce the federal debt.

At issue is an annual U.S. budget deficit that now is routinely above $1 trillion and a national debt that has risen to near $16.5 trillion.

Since the election last week, Boehner has suggested a new willingness to bring Republicans behind an increase in government revenue, but not one that is funded by higher tax rates on upper-income Americans. Instead, he suggests tinkering with the tax code and eliminating loopholes that the wealthy take advantage of to lower their taxes.

Both sides know they must find a deal, because the lack of one will only deepen voter disgust with a government that has ground to a near standstill over the past decade.