President Obama stressed urgency Friday morning when meeting with congressional leaders in the White House Roosevelt Room to discuss strategy to avoid the looming “fiscal cliff” of spending cuts and tax hikes set to occur Jan. 1 without legislative action.
“I think we’re all aware that we have some urgent business to do,” Obama said before commencing the meeting. “We’ve got to make sure that taxes don’t go up on middle-class families, that our economy remains strong, that we’re creating jobs. And that’s an agenda that Democrats and Republicans and independents, people all across the country share.”
The Congressional leaders, including House Speaker John Boehner (R-Ohio), House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Harry Reid (D-Nev.) and Senate Minority Leader Mitch McConnell (R-Ky.), have differing ideas on how to tackle the fiscal cliff, but one thing in common—a 46-day deadline.
Since their recent electoral losses, Republican leaders have signaled a possible readiness to accept additional tax revenue, yet they continue to oppose raising the top marginal rate—currently 35 percent but scheduled to return to its Clinton-era level of 39.6 percent on Jan. 1.
For their part, Obama and Democratic leaders want to push forward with extending Bush tax rates for all families earning less than $250,000 each year—98 percent of Americans and 97 percent of small businesses. If the tax cuts are allowed to expire, the average American family’s tax burden will increase about $2,000.
“This would not only give certainty to millions of American families and small businesses but also resolve more than half of the impact of the so-called fiscal cliff,” a White House official said in a statement. Obama “will be making clear that he is willing to compromise and do tough things to get this done, but only in the context of a balanced approach that also asks more in revenues from the wealthiest Americans.”
Republicans may hold out for additional spending cuts, however. A Boehner aid recently told ABC’s John Parkinson the Republicans want to know what specific spending cuts are planned before agreeing to increased tax revenue.
“As a sign of our seriousness, Republicans have put revenue on the table, provided it comes from tax reform and is accompanied by spending cuts,” the aid said. “President Obama must now follow suit by telling the American people what spending cuts he’s willing to make.”
Reid and Pelosi both confirmed the urgency of reaching a compromise, and assured they will be working diligently to achieve a solution before the deadline.
“We have the cornerstones of being able to work something out,” Reid told the Associated Press. “We’re going to do it now. This isn’t something we’re going to wait until the last day of December to get it done.”
Reid added the group plans to work through the Thanksgiving recess. Pelosi set a goal for reaching an agreement before Christmas.
“We should have a goal in terms of how much deficit reduction,” she told the Associated Press. “We should have a deadline before Christmas. We should show some milestones of success so that confidence can build as we reach our solution.
“We did not discuss numbers. But I think it would be good if we did something in the $4 trillion category of deficit reduction, which is similar to the grand bargain that was discussed last year.”
Boehner aids, however, said the Congressman feels tax and entitlement reform are too complex to complete this year, and that the lame-duck Congressional session should instead focus on drafting a framework for reform in 2013 that also sets revenue and spending levels.
Obama seems poised for compromise without losing focus on what is best for the American people.
“Our challenge is to make sure that we are able to cooperate together, work together, find some common ground, make some tough compromises, build some consensus to do the people’s business,” he said while seated between Boehner and Reid in the Roosevelt Room. Americans “want to see that we are focuses on them, not on our politics here in Washington. So my hope is this is going to be the beginning of a fruitful process where we’re able to come to an agreement that will reduce our deficit in a balanced way. And we’re also going to be focusing on making sure that middle-class families are able to get ahead.”