Obama says he’ll do what it takes to avoid cliff

DAVID ESPO

AP Spe­cial Correspondent

WASHINGTON — The White House and a key con­gres­sional Demo­c­rat hinted at fresh con­ces­sions on taxes and cuts to Medicare and other gov­ern­ment ben­e­fit pro­grams Wednes­day as bar­gain­ing with Repub­li­cans lurched ahead to avoid the year-end “fis­cal cliff” that threat­ens to send the econ­omy into a tailspin.

Increas­ing num­bers of rank-and-file Repub­li­cans also said they were ready to give ground, a boost for House Speaker John Boehner and other party lead­ers who say they will agree to higher tax rev­enues as part of a deal if it also curbs ben­e­fit pro­grams as a way to rein in fed­eral deficits.

“I’ll go any­where and I’ll do what­ever it takes to get this done,” Pres­i­dent Barack Obama said as he sought to build pres­sure on Repub­li­cans to accept his terms — a swift renewal of expir­ing tax cuts for all but the high­est income earn­ers. “It’s too impor­tant for Wash­ing­ton to screw this up,” he declared.

For all the talk, there was no sign of tan­gi­ble progress on an issue that marks a first test for divided gov­ern­ment since elec­tions that assured Obama a sec­ond term in the White House while renew­ing Repub­li­can con­trol in the House.

“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 in the Capi­tol. He, like Obama, expressed opti­mism that a deal could be reached.

At the same time, he pub­licly dis­agreed with one GOP law­maker, Rep. Tom Cole of Okla­homa, who said he was ready to go along with Obama’s plan to renew most but not all of the expir­ing income tax cuts. “It’ll hurt the econ­omy” to raise rates for any­one, said Boehner.

Sep­a­rately, at a closed-door meet­ing with the rank and file, the speaker told fel­low Repub­li­cans they are on solid polit­i­cal ground in refus­ing to let tax rates rise. He cir­cu­lated polling data show­ing the pub­lic favors clos­ing loop­holes to raise rev­enue far more than it sup­ports rais­ing rates on incomes over $250,000.

There were no face-to-face talks between the admin­is­tra­tion and law­mak­ers dur­ing the day, although the White House is dis­patch­ing Trea­sury Sec­re­tary Tim Gei­th­ner and top leg­isla­tive aide Rob Nabors to a series of ses­sions with con­gres­sional lead­ers on Thursday.

On Wednes­day, a group of cor­po­rate CEOs push­ing for a deal met sep­a­rately with top Demo­c­ra­tic and Repub­li­can lead­ers in the House, joined by Ersk­ine Bowles, who was co-chairman of a deficit com­mis­sion Obama appointed ear­lier in his term.

Speak­ing to reporters before a ses­sion with busi­ness lead­ers, House Demo­c­ra­tic leader Nancy Pelosi of Cal­i­for­nia said the bar­gain­ing ought to begin where deficit talks between Obama and Boehner broke down 18 months ago “and go from there to reach an agreement.”

She didn’t say so, but at the time, the two men were exchang­ing offers that called for at least $250 bil­lion in cuts from Medicare over a decade, and another $100 bil­lion from Med­ic­aid and other fed­eral health pro­grams. Among the changes under dis­cus­sion — with Obama’s approval — was a grad­ual increase in the eli­gi­bil­ity age for Medicare from 65 to 67, as well as higher fees for beneficiaries.

Also on the table at the time was a plan to cur­tail future cost-of-living increases for Social Secu­rity and other ben­e­fit programs.

Those nego­ti­a­tions fal­tered in a hail of recrim­i­na­tions after the pres­i­dent upped his demand for addi­tional tax rev­enue and con­ser­v­a­tives balked. At the same time lib­er­als were object­ing to sav­ings from Medicare and Social Security.

Now, more than a year and one elec­tion later, Obama has said repeat­edly he is open to alter­na­tives to his cur­rent pro­posal to raise addi­tional tax rev­enue. But he also says he will refuse to sign leg­is­la­tion that extends the cur­rent top rates on incomes over $200,000 for indi­vid­u­als and $250,000 for couples.

Instead, he is push­ing Con­gress to renew expir­ing tax cuts for all income below those lev­els as an interim mea­sure — an offer Boehner and Repub­li­cans gen­er­ally say is unac­cept­able because it would mean higher taxes on small busi­ness owners.

Bowles said dur­ing the day that Obama might be will­ing to back off his demand that the top rate revert all the way from 35 per­cent to 39.6 per­cent, where it was a decade ago before tax cuts sought by then-President George W. Bush took effect.

At the White House, spokesman Jay Car­ney side­stepped ques­tions. “If I told you how much flex­i­bil­ity the pres­i­dent had, it would elim­i­nate his flex­i­bil­ity,” he said.

He noted that Obama has said he will lis­ten to alter­na­tives, but the spokesman said, “The most basic, sim­plest, most effi­cient way to achieve that rev­enue tar­get is by return­ing the rates for top earn­ers back to those that were in place in the Clin­ton era,” when the top rate on per­sonal income was 39.6 percent.

The goal of the talks is to pro­duce a long-term deficit-cutting deal that will allow the can­cel­la­tion of tax increases and spend­ing cuts sched­uled for the end of the year that numer­ous econ­o­mists say threaten a new recession.

While the obsta­cles are numer­ous, there are other polit­i­cal imper­a­tives push­ing the two sides toward an agreement.

Unem­ploy­ment ben­e­fits expire for some of the long-term job­less at the end of the year. Addi­tion­ally the gov­ern­ment is expected to need an increase in bor­row­ing author­ity early next year or face the pos­si­bil­ity of a default. Any agree­ment on that is expected to raise the cur­rent $16.4 tril­lion level.

Obama wrapped up the day by meet­ing with CEOs from about a dozen cor­po­ra­tions, many of whom came away opti­mistic that an agree­ment could be reached that would help the economy.

“They feel like this can be done if there is a will­ing­ness on the other side to get in a room and do it,” said Arne Soren­son, Marriott’s pres­i­dent and CEO, who called Obama’s approach “resound­ingly reasonable.”

Soren­son said he urged the pres­i­dent and his team to “do as much as you pos­si­bly can now. Don’t just talk about down pay­ments, small down pay­ments that leave the uncer­tainty hang­ing out over 2013. Because I think the uncer­tainty would be a threat to the economy.”

Posted by AP News on Nov 28 2012. You can follow any responses to this entry through the RSS Feed. Comments can be made below.