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Senate 'fiscal cliff' deal forged in flurry of final negotiations

WASHINGTON — They had 80 hours to finish or fail.

Stuck in a "fiscal cliff" stalemate, trust nearing tatters, President Barack Obama and Senate Republicans changed the game after Christmas. It took the rekindling of an old friendship between Vice President Joe Biden and GOP Sen. Mitch McConnell, an extraordinary flurry of secret offers, a pre-dawn Senate vote on New Year's Day and the legislative muscling that defines Washington on deadline.

Yet the fate of the final agreement remains in doubt as House Republicans show signs of rebellion against the plan.

How the final days of private negotiations pulled the country — maybe only temporarily — back from the precipice of the fiscal cliff marked a rare moment of bipartisanship for a divided government. Several officials familiar with talks requested anonymity to discuss them.

Obama, having cut short his Christmas vacation in Hawaii, huddled with congressional leaders Friday afternoon at the White House. Talks between the president and House Speaker John Boehner had failed, so Obama put the fate of the fiscal cliff in the hands of McConnell and Senate Majority Leader Harry Reid.

McConnell made the first move. The Kentucky Republican proposed a plan late Friday night that would extend tax cuts expiring Jan. 1 on family income above $750,000 a year, according to officials. He also wanted to keep tax rates on wealthy estates at 35 percent, slow the growth of Social Security cost-of-living increases, and pay for an offset of the sequester — Congress's term for across-the-board spending cuts __ by means-testing Medicare. His offer did not include the extension of unemployment benefits Obama had demanded.

Democrats balked and began preparing a counteroffer. It called for extending tax cuts for family income up to $350,000, a concession from Obama's campaign pledge to cap the threshold at $250,000. The Democratic leader also insisted that any deal include a way to deal with the sequester, plus an extension of the jobless benefits for 2 million Americans.

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