|
| President Barack Obama shakes hands with House Speaker John Boehner of Ohio in the Roosevelt Room of the White House in Washington, Friday, Nov. 16, 2012, during a meeting to discuss the deficit and economy. |
WASHINGTON (AP) -- Congressional leaders from both parties voiced fresh optimism Friday after meeting with newly re-elected President Barack Obama about avoiding year-end "fiscal cliff" tax increases and spending cuts that would hammer the middle class and risk plunging the economy into recession.
House Speaker John Boehner of Ohio
said Republicans are willing to consider increased revenue "as long as
it is accompanied by spending cuts" as leaders in a divided government
get to work on a possible deal after a fierce election campaign.
He
presented a framework that one official said called for a deficit
down-payment of unspecified size by year's end, to be followed by
comprehensive tax reform and an overhaul of Medicare and other benefit
programs in 2013.
Democrats indicated some
spending cuts would be fine with them. "I feel confident that a solution
may be in sight," said House Democratic leader Nancy Pelosi of
California.
The goal of the high-pressure
talks to come is to produce a multitrillion-dollar deficit-reduction
plan that can take the place of the across-the-board tax increases and
spending cuts that are slated to take effect on Jan. 1.
In
remarks while reporters were present, Obama stressed that time was
short as he welcomed the leaders to the White House for the first time
since winning re-election this month. "We have urgent business to do,"
he said.
If nothing else, the mood seemed good
around the table in the Roosevelt Room of the White House. Obama noted
that it would soon be Boehner's birthday and said he wasn't "going to
embarrass him with a cake because we didn't know how many candles were
needed."
"Yeah, right," said Boehner, who's turning 63 on Saturday, chuckling as he playfully poked the president in the elbow.
There was no indication that the meeting touched on Obama's campaign-long call to raise tax rates at upper incomes.
In
their public comments, neither the president nor the lawmakers dwelt on
long-standing differences that doomed previous deficit negotiations.
Senate Republican leader Mitch McConnell came closest, telling reporters
that while Republicans are willing to discuss increased revenue, most
members of his party "believe we are in the dilemma we are in not
because we tax too little but because we spend too much."
After
the meeting, White House Press Secretary Jay Carney said, "Both sides
agreed that while there may be differences in our preferred approaches,
we will continue a constructive process to find a solution and come to a
conclusion as soon as possible."
For all the
expressions of optimism, it was unclear whether the Nov. 6 elections and
the prospect of the so-called fiscal cliff would serve as a strong
enough catalyst for these talks to succeed where other recent attempts
have failed.
Obama ran for a new term calling
for a "balanced approach" to deficit reduction that includes raising
taxes on income over $200,000 a year for individuals and $250,000 for
couples. And while the president has stated a willingness to pull
federal savings out of benefit programs including Medicare and Medicaid,
Democratic leaders have been reluctant to go along.
Raising
taxes has long been anathema to Republicans, who say government's
spending must be cut to reduce deficits and taxes reduced to stimulate
job creation in an economy where unemployment is 7.9 percent.
Boehner
told reporters after Friday's meeting that he had outlined a framework
for negotiations that "is consistent with the president's call for a
fair and balanced approach." He did not provide details, except to say
it "deals with reforming our tax code and reforming our spending," a
reference to benefit programs such as Medicare and Medicaid.
An
aide said Boehner's approach calls for agreement on long-term revenue
and spending targets to be set into law, presumably this year, leaving
details to 2013 on an overhaul of the tax code and remaking benefit
programs.
"There is no more `let's do it some
other time,'" said Senate Majority Leader Harry Reid, D-Nev. "We're
going to do it now. ... We feel very comfortable with each other, and
this isn't something we're going to wait until the last day of December
to get it done."
Obama favors $1.6 trillion in
higher taxes over the next decade, in part by allowing existing cuts to
expire on Dec. 31 on higher incomes.
White
House officials claim an overall deficit reduction package totaling more
than $4 trillion, although that includes $1 trillion in spending cuts
agreed to last year, and an additional $1 trillion in spending no longer
needed for the wars in Iraq and Afghanistan. Republicans and
independent fact checkers dispute the claimed savings from the two wars,
since the money was borrowed in the first place.
Whatever the obstacles to a deal, there is little dispute about the cost of failure.
Under
current law, tax cuts that took effect more than a decade ago will
expire at all income levels at the end of the year, as will Bush-era
reductions for investors, married couples, families with children and
others. The 2 percent payroll tax cut would end, and an additional 26
million taxpayers would come under the alternative minimum tax.
As well, the defense budget would be cut by $55 billion, and domestic programs would incur a reduction of the same size.
Unemployment benefits for some of the longest-term jobless also expire at the end of the year.
Boehner
has said previously that any agreement should include an increase in
the national debt limit, now $16.4 trillion. The Treasury is expected to
hit that cap sometime in the next few months.
