Make us your home page

Obama, Boehner agree on goals, but not method to avoid fiscal cliff

WASHINGTON — President Barack Obama and House Speaker John Boehner said Friday that they want to work together to avert spending cuts and tax increases that could throw the economy back into a recession — but both also come to the negotiations with the same sharp differences they had before this week's elections.

The key divide involves income tax rates. Obama wants to continue the Bush-era rates, which are scheduled to expire at the end of the year, for only families that make less than $250,000 annually. Republicans say the current rates should continue for everyone, including the wealthy.

The president spoke at the White House for the first time since his decisive win Tuesday over Republican Mitt Romney, and he maintained that most Americans support his "balanced approach" of cutting spending while raising taxes on the rich.

"I want to be clear: I'm not wedded to every detail of my plan," Obama said. "I'm open to compromise. I'm open to new ideas. I'm committed to solving our fiscal challenges. But I refuse to accept any approach that isn't balanced."

Boehner, an Ohio Republican, who spoke on Capitol Hill earlier in the day, said he was open to compromise on virtually everything — except higher taxes.

"Everyone wants to get our economy moving again," he said. "Everyone wants to get more Americans back to work again. Raising tax rates will slow down our ability to create the jobs everyone says they want."

Senate Republican leader Mitch McConnell of Kentucky took a harder line.

"There is no consensus on raising tax rates, which would undermine the jobs and growth we all believe are important to our economy," he said. "While I appreciate and share the president's desire to put the election behind us, the fact is we still have yet to hear an actual plan from the president for addressing the great economic challenges we face."

Democrats quickly fired back. "The president's message today was as clear as the outcome of the election," said House Minority Whip Steny Hoyer, D-Md.

Obama won re-election with 50.5 percent of the popular vote, and the Democrats increased their majority in the Senate. The party expects to control 55 seats next year, up from the current 53. But Republicans will retain control of the House of Representatives with a strong majority.

Obama and congressional leaders of both parties will meet Friday at the White House, the day before the president leaves for a three-nation Asian visit, to begin discussing ways to avoid the so-called fiscal cliff. He also plans to speak with business, labor and civic leaders.

Obama and Boehner said they were ready to talk. They negotiated last year and came close to a "grand bargain" on spending cuts and revenues. But the same problem that dogged their negotiations then still appears to be in place: rank-and-file party members who are reluctant to move away from their positions on taxes.

The president and the speaker had an initial conversation earlier in the week after the election, which Boehner described as cordial.

"Fiscal cliff" is the term that's been used to describe a series of spending cuts that are slated to take effect as the result of a bipartisan deal struck last year to raise the nation's debt ceiling. The first $109 billion, including $55 billion in defense reductions that the Obama administration has said are unacceptable, would kick in Jan. 2, before the new Congress is sworn in.

The nonpartisan Congressional Budget Office has said that the cuts, along with tax increases, could raise the unemployment rate to about 9 percent. It's now 7.9 percent. The CBO estimates that the austerity program would reduce the deficit by $503 billion through the end of next September — or approaching $700 billion for the entire calendar year.

Both parties oppose the spending reductions, but they've disagreed for months on what to do about them. They postponed their discussions until after the election. Congress will return to Washington on Tuesday.

What's at stake

. Bush-era tax cuts on income, investments, married couples and families with children and inheritances. In addition, some 26 million face the alternative minimum tax next filing season, which would raise their taxes by an average of $3,700. Cost through September: $330 billion.

.  A $55 billion, 9 percent cut in the defense budget next year and another $55 billion in cuts to domestic programs, including a 2 percent cut to Medicare providers.

.  Unemployment benefits for the long-term jobless.

Cost: $26 billion.

.  Sharp cut in reimbursements for doctors participating

in Medicare. Cost: $11 billion.

.  Obama's temporary 2 percentage point cut in payroll taxes. Cost: $95 billion.

Associated Press

Obama, Boehner agree on goals, but not method to avoid fiscal cliff 11/09/12 [Last modified: Friday, November 9, 2012 11:27pm]
Photo reprints | Article reprints

Copyright: For copyright information, please check with the distributor of this item, Tribune News Service.

Join the discussion: Click to view comments, add yours