By Ian Swanson - 12/27/12 07:04 PM EST
President Obama is offering a proposal to Senate GOP leaders that would prevent looming tax hikes and spending cuts, according to Sen. Scott Brown (R-Mass.).
Brown said in messages on Twitter and Facebook that he had "learned" of the proposal.
"Heading back to dc. Just learned that the Pres. reached out to Senate GOP leadership with a proposal," Brown wrote on Facebook. "It is the first such proposal to be put forth. Eager to see why it is. How it is serious."
Obama called congressional leaders about the “fiscal cliff” of tax hikes and spending cuts on his way back from Hawaii.
A Senate GOP leadership aide commented: "We're expecting the Democrats to finally act."
An aide to Senate Majority Leader Harry ReidHarry ReidSanders tests Wasserman Schultz Nearly 400 House bills stuck in Senate limbo Puerto Rico debt relief faces serious challenges in Senate MORE (D-Nev.), however, denied that Reid is planning to move any legislation. Reid earlier on Thursday said it was unlikely Congress and the White House would reach a deal before the end of the year.
If Obama is making a proposal, it is not clear what would be included.
On Friday, the president said he would reach for a smaller deal that would extend tax rates on annual incomes below $250,000 while allowing rates above that threshold to rise. Obama also said he would seek an extension of unemployment benefits, but would put off broader entitlement reforms until next year, as well as a hike to the debt ceiling.
Republicans have been unwilling to only extend tax rates on incomes below $1 million, and Democrats and Republicans have bickered over the proper balance in a deal between spending cuts and tax hikes.
In talks with Speaker John BoehnerJohn BoehnerIn House GOP, Ryan endorsement of Trump seen as inevitable House GOP faces dilemma on spending bills Overnight Finance: Puerto Rico bill clears panel | IRS chief vows to finish term | Bill would require nominees to release tax returns MORE (R-Ohio), Obama offered to raise his threshold for higher taxes to $400,000 in annual income. Obama also offered to change the way entitlement cost of living increases are calculated so that the increases would be less generous.
BoehnerJohn BoehnerIn House GOP, Ryan endorsement of Trump seen as inevitable House GOP faces dilemma on spending bills Overnight Finance: Puerto Rico bill clears panel | IRS chief vows to finish term | Bill would require nominees to release tax returns MORE rejected the offer and attempted to move a bill through the House that would have extended tax rates on annual incomes below $1 million. Boehner ended up pulling that bill before it reached the floor because of a lack of support from his own conference, however, a move that increased Obama's leverage in the talks.
Economists warn that if Washington does nothing to prevent the tax hikes and spending cuts, it could trigger a recession. Bush-era tax rates on most taxpayers are set to expire at the end of the year, as are a host of other tax rates. The government is also scheduled to begin in January $1.1 trillion in spending cuts over 10 years.
Alexander Bolton and Daniel Strauss contributed to this story.
—This story was first posted at 12:58 and last updated at 3:46 p.m.