The White House has said President Barack Obama is willing to continue bargaining for a bipartisan solution to avert the "fiscal cliff", after Republicans in the House of Representatives abandoned efforts to pass an alternative plan.
Jay Carney, the White House spokesman, said on Thursday that Obama intends to work with Congress. But he did not mention House Speaker John Boehner's apparent failure to muster the votes for so-called "Plan B".
Obama and his aides had been critical of Boehner's plan to raise tax rates on incomes above $1m, as it would not have raised the amount of revenue that Obama has demanded.
What is the fiscal cliff?
On January 1, 2013, a series of tax increases and huge spending cuts are due to come into force.
The deadline was imposed in 2011 to force the president and Congress to agree on ways to trim a big budget deficit over the next 10 years.
If they can reach a deal before the new year, the cliff will be averted.
The fear is that raising taxes while massively cutting spending could push the US into recession with knock-on effects for the rest of the world.
Carney denounced the Republican plan, calling it a "multi-day exercise in futility".
"It's an exercise in Republican vote-counting that will not result in anything for the American people," Carney said.
In a brief statement on Thursday, Boehner said the bill "did not have sufficient support from our members to pass" and that it would now be up to the president to work with Senate Majority Leader Harry Reid "on legislation to avert the fiscal cliff".
The clock is ticking toward a deadline at the end of the year, when harsh tax increases and spending cuts will kick in if talks do not succeed. These measures would likely push the US economy into recession.
"While the White House slow-walks us all to the edge of the fiscal cliff, Republicans are once again taking action to protect American families, our economy, and our national security," Boehner's office said.
"At some point the Senate has to act. They failed to act. We have a bill sitting at the desk in the Senate that protects all Americans from an increase in taxes. They can take up that bill sitting at the desk, they could pass it, they can amend it and they could help move the process.
"But, to date, they have done nothing," Boehner said at the press conference on Thursday.
Speaking to Al Jazeera from Singapore, Manu Bhaskaran, head of economic research at Centennial Group, said he believed that the Republicans cannot vote for a package including tax rises "unless there is some kind of crisis".
"So there has to be a crisis point before they agree. But the logic is also here that they cannot afford to hold the whole nation hostage and cause a cliff to happen.
"So in the end, very, very close to the brink, there will be a pullback, there will be a compromise and it will largely be on Mr Obama's terms."
Republicans complain that Obama has not done enough to promise spending cuts to rein in the deficit and hoped "Plan B" would force him to offer more.
The two sides are still at odds on taxes. The White House wants taxes to rise on household incomes above $400,000 a year - a concession from Obama's opening proposal for the $250,000 income threshold, while Boehner's plan aims at income over $1m.
Source: Al Jazeera and agencies