White House not yet ready to declare a ‘fiscal cliff’ impasse

WASHINGTON -- Aides to President Obama say it’s way too early to declare an “impasse” in the talks to avert the fiscal cliff, a word that cropped up Monday on Capitol Hill.

“We remain confident we can achieve an agreement,” White House Press Secretary Jay Carney said. “We remain hopeful and optimistic we can reach a deal.”

Despite that insistent optimism, administration officials began to roll out a backup strategy – a public campaign that could pressure Republicans to deal and paint them as the villains if they don’t.

Early in the day, the White House Council of Economic Advisors released a report projecting that, if Congress fails to act and middle-income taxes rise, consumer spending growth could decline by 1.7 percentage points.

QUIZ: How much do you know about the fiscal cliff?

Economic growth overall would drop by 1.4 percentage points next year, council Chair Alan Krueger told reporters in the afternoon. The automatic tax increases wouldn’t just hurt the rest of the holiday shopping season, he said, but could trim consumer spending by about $200 billion in 2013.

That’s no small matter given that the American economy has grown by a little more than 2% since the recovery began in 2009. “Retail spending is extremely important for the economy,” Krueger said.

Krueger’s team looked only at the pending tax hikes for taxpayers and not at the effects of the drastic spending cuts also set to take effect at the end of the year. He dismissed questions about whether an analysis of those defense and other cuts – already of grave concern to Republicans – would be forthcoming.

Both publicly and behind closed doors, White House officials expressed hope that the environment for negotiations would improve over the coming week. Staffers on all sides are deep in discussions right now.

PHOTOS: President Obama’s past

Just in case, the White House has left the president’s schedule flexible for the week and isn’t disclosing what he plans to do.

One strong possibility? Obama could go back out on the stump and take his case to the people.

Follow Politics Now on Twitter and Facebook

[email protected]

Twitter: @cparsons