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The U.S. Capitol building is pictured behind a fence as lawmakers return from the Christmas recess in Washington Dec. 27, 2012. (MARY CALVERT/Reuters)
The U.S. Capitol building is pictured behind a fence as lawmakers return from the Christmas recess in Washington Dec. 27, 2012. (MARY CALVERT/Reuters)

‘Fiscal cliff’ fracas: From smiles to distrust to rancour Add to ...

It began so optimistically.

On Nov. 16, after their first “fiscal cliff” session with President Barack Obama, the four leaders of Congress had stood in the driveway of the White House shoulder-to-shoulder for what is a rare photo these days, Republicans and Democrats together, smiling.

There they were at the microphone, talking about a “framework” for tax reform and deficit reduction.

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In hindsight, the shot of House Speaker John Boehner and Senate Minority Leader Mitch McConnell - the Republicans - with Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi - the Democrats - seems like an old family photo, before things went bad.

From that day on the driveway, things went downhill, rather quickly.

There was a feeling on both sides that the other was not acting seriously to avert the “fiscal cliff” of tax hikes and spending cuts that were set to occur at the beginning of this month. That was inflamed by public comments from ranking Republicans and Democrats, poisoning the atmosphere.

Many lawmakers and their aides fear that things may get more toxic through a series of bitter struggles expected in the next few months over the nation’s debt and deficit burdens - fights not just between the parties but within them, and between the White House, the Senate and the House.

At stake is not only the U.S. government’s ability to get its finances under control but whether it might default on its debts, and suffer further downgrades in the nation’s credit rating.

While Mr. Obama is perceived the victor in the fiscal deal passed by Congress earlier this week, he did not come close to getting the one thing he demanded that could have headed off the next potential crisis: Freedom from a fight over the federal government’s debt ceiling, which is likely to occur in February when the Treasury Department must ask Congress to increase the government’s borrowing limit beyond the current $16.4-trillion.

Any positive vibes started fading a few days after the photo. On November 20, at a meeting between Republican staffers and Rob Nabors, the White House director of legislative affairs. Mr. Nabors announced that he had a White House offer in hand but “didn’t want to be laughed out of the room and implied he would skip it because it was a waste of time,” according to one Republican source. The White House declined to comment.

What the White House was offering was Obama’s budget proposal from earlier in the year, long ago rejected by Republicans.

A Democratic source familiar with the negotiations said it was merely an opening bid that should have come as no surprise, but Republicans saw it as a red flag, particularly after Treasury Secretary Timothy Geithner touted it again nine days later.

Things didn’t get better in the final weeks of the year.

At a Dec. 13 meeting between Mr. Obama, Mr. Boehner and their aides at the White House, Mr. Obama spoke for almost the entire 50-minute session, according to Republican sources. They said he warned that if he did not get an agreement to his liking, he would spend the next four years “campaigning against House Republicans,” starting with his second-term inauguration speech on January 21.

As far as the Republicans were concerned, Obama had effectively remained in campaign mode after his Nov. 6 re-election, going on the attack in his “fiscal cliff” speeches.

One of the clearest examples of this, occurred at a delicate point in negotiations on Monday, with a looming deadline and the risk growing that the Republican-controlled House would blow up any deal pulled together by the Senate. At a campaign-style event with “middle class” Americans in the background, Mr. Obama accused Republicans of trying to “shove spending cuts at us that will hurt seniors, or hurt students or hurt middle-class families.”

The move angered House Republicans who were already divided on how to proceed, leading to more bad blood. Republican Senator John McCain responded in the Senate, wondering “whether the president really wants this issue resolved.” The people Mr. Obama was talking to, Mr. McCain said, “were laughing and cheering and applauding as we are on the brink of this collapse.”

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