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Thursday, November 29, 2012

White House, Congress Talk As ‘Fiscal Cliff’ Nears

In this Nov. 16, 2012, photo, President Obama acknowledges House Speaker John Boehner of Ohio while speaking to reporters, as he hosted a meeting of the leadership of Congress to discuss the deficit and economy. (Carolyn Kaster/AP)

House Speaker John Boehner met with Treasury Secretary Tim Geithner on Thursday and accused Democrats afterwards of failing to outline specific cuts to avert a fiscal cliff that threatens to send the economy into recession.

“No substantive progress has been made between the White House and the House” in the past two weeks, the Ohio Republicans told reporters after the private meeting in his Capitol office.

“I was hopeful we’d see a specific plan for cutting spending and we sought to find out today what the president really is willing to do,” Boehner said.

Democrats quickly countered with a news conference of their own.

“Republicans know where we stand,” said Senate Majority Leader Harry Reid of Nevada. “We’re still waiting for a serious offer from Republicans.”

Reid noted that polls show strong public support for newly re-elected President Barack Obama’s proposal to extend all expiring tax cuts except for those that apply to incomes over $200,000 for individuals and $250,000 for couples – legislation that Boehner and other Republicans say would harm the economy rather than help it.

Getting Closer To An Agreement

The dueling news conferences marked an acceleration in the pace of bargaining, if not in movement toward an agreement on an issue that leaders of both parties say they want to solve.

The speaker has said that Republicans are willing to endorse higher tax revenues as part of any deal to prevent across-the-board tax increases and spending cuts scheduled to take effect at year’s end, but only as part of a deal that includes savings from Medicare and other government benefit programs.

Boehner spoke by phone with Obama on Wednesday night, and said his remarks Thursday were the result of that conversation, as well as the session with Geithner.

Geithner had a later session on his schedule with Senate Republican Leader Mitch McConnell of Kentucky as well as Congress’ top Democrats.

Political Maneuvering

On Wednesday, the two sides maneuvered for political position.

“We have not seen any good-faith effort on the part of this administration to talk about the real problem that we’re trying to fix,” said House Majority Leader Eric Cantor, R-Va.

Obama is mounting a public campaign to build support and leverage in the negotiations, appearing at the White House with middle-class taxpayers and launching a campaign on Twitter to bolster his position.

“Right now, as we speak, Congress can pass a law that would prevent a tax hike on the first $250,000 of everybody’s income,” Obama said. “And that means that 98 percent of Americans and 97 percent of small businesses wouldn’t see their income taxes go up by a single dime.”

Two Sets Of Demands

Obama is insisting that tax rates go up on family income exceeding $250,000; Boehner is adamant that any new tax revenues come from overhauling the tax code, clearing out tax breaks and lowering rates for all.

Republicans are also demanding significant cuts to so-called entitlement programs like Medicare, such as an increase in the eligibility age for the program from 65 to perhaps 67.

“It’s time for the president and Democrats to get serious about the spending problem that our country has,” Boehner said at a news conference Wednesday in the Capitol. Boehner, like Obama, expressed optimism that a deal could be reached.

Consequences Of Not Reaching A Deal

At issue are steep, across-the-board cuts to the Pentagon and domestic programs set to strike the economy in January as well as the expiration of Bush-era tax cuts on income, investments, married couples and families with children. That combination of tax increases and spending cuts would wring more than half a trillion dollars from the economy in the first nine months of next year, according to the Congressional Budget Office.

No one anticipates a stalemate lasting that long, but many experts worry that even allowing the spending cuts and tax increases for a relatively brief period could rattle financial markets.

From their public statements, Obama and Boehner appear at an impasse over raising the two top tax rates from 33 percent and 35 percent to 36 percent and 39.6 percent. Democrats seem confident that Boehner ultimately will have to crumble, but Obama has a lot at stake as well, including a clear agenda for priorities like an overhaul of the nation’s immigration laws.

Romney Meets With Obama, Ryan

Obama is also meeting privately Thursday with his defeated Republican rival Mitt Romney. The president has cast his victory over Romney as a sign that Americans back his tax proposals, which were a centerpiece of his re-election campaign.

While in Washington, Romney will also meet with his former running mate, Ryan. The Wisconsin congressman is chairman of the House Budget Committee and deeply involved in the fiscal cliff discussions.

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