* House of Representatives to meet Sunday on "fiscal cliff"
* Reid assails Boehner's "dictatorship" in the House
* Obama back from Hawaii to attempt late solution
* Tax hikes, spending cuts set to begin in January
By David Lawder and Richard Cowan
WASHINGTON, Dec 27 Lawmakers on Thursday gave
themselves a last chance to prevent the United States from
plunging off a "fiscal cliff" by setting up a late session in
Congress just about a day before taxes are due to rise for most
Republican leaders in the House of Representatives told
their members to be back in Washington from the Christmas
holiday break on Sunday night in case they need to vote on
That leaves the door open to a last-minute solution to avert
big tax hikes due to begin on Jan. 1 and deep, automatic
government spending cuts set to begin on Jan. 2 - together worth
$600 billion - that could push the United States back into
But the two political parties remained far apart,
particularly over plans to increase taxes on the wealthiest
Americans to help close the U.S. budget deficit.
"Hopefully, there is still time for an agreement of some
kind that saves the taxpayers from a wholly, wholly preventable
economic crisis," Mitch McConnell, the top Republican in the
Democratic-controlled Senate, said on the Senate floor.
U.S. stocks sharply cut losses after news of the House
reconvening as investors clung to hopes of an 11th-hour deal.
Earlier in the day, Senate Majority Leader Harry Reid, the
top Democrat in Congress, warned that the United States looked
to be headed over the "fiscal cliff."
"It looks like that is where we're headed," he said on the
Senate floor, blaming Republicans for the impasse in talks.
He called on the Republicans who control the House to
prevent the worst of the fiscal shock by getting behind a Senate
bill to extend existing tax cuts for all except those households
earning more than $250,000 a year.
With the clock ticking toward the deadline for action, Reid
offered little hope.
"I don't know time-wise how it can happen now," he said.
Referring to the House run by Speaker John Boehner - the top
Republican in Congress - Reid said, "It's being operated with a
dictatorship of the speaker, not allowing a vast majority of the
House of Representatives to get what they want."
Boehner's failed effort last week to push his own "fiscal
cliff" solution through the House was a "debacle," Reid added.
He also accused Boehner of delaying "fiscal cliff" action until
after he seeks re-election as House speaker on Jan. 3.
"John Boehner seems to care more about keeping his
speakership than about keeping the nation on firm financial
footing," Reid added.
His comments may have been more an attempt to spur
Republican rivals into action than a definitive prediction that
"fiscal cliff" talks will fail.
OBAMA RETURNS TO WASHINGTON
President Barack Obama arrived back at the White House from
a brief vacation in Hawaii to try to restart stalled
negotiations with Congress.
The House and Senate passed bills months ago reflecting
their own sharply divergent positions on the expiring low tax
rates, which went into effect during the administration of
Republican former President George W. Bush.
Democrats want to allow the tax cuts to expire on the
wealthiest Americans and leave them in place for everyone else.
Republicans want to extend the tax cuts for everyone.
In another sign that Americans are increasingly worrying
about their finances as Washington fails to fix the budget
crisis, consumer confidence fell to a four-month low in
December. The fiscal cliff wrangling in Congress sapped what had
been a growing sense of optimism about the economy, a report
released on Thursday showed.
"People are hearing about (the "fiscal cliff") and it
negatively impacts confidence and investor sentiment and even
holiday sales," said Todd Schoenberger, managing partner at
Landcolt Capital in New York.
Americans blame Republicans in Congress more than
congressional Democrats or Obama for the "fiscal cliff" crisis,
a Reuters/Ipsos poll showed.
When asked who they held more responsible for the "fiscal
cliff" situation, 27 percent blamed Republicans in Congress, 16
percent blamed Obama and 6 percent pointed to Democrats in
Congress. The largest percentage - 31 percent - blamed "all of