U.S. President Barack Obama and congressional Republicans have set out
initial positions ahead of difficult negotiations on deficit and debt
reduction and taxes. As Mr. Obama has invited congressional leaders from
both major political parties to the White House for talks next week to
forge consensus.
After Obama's election victory, both sides are talking about common
ground, although actually finding it and seizing opportunities for
bipartisan compromise will be hard.
A combination
of expiring tax cuts and the first phase of billions of dollars in
mandatory spending reductions is fast approaching at the end of the
year. Americans at all income levels face a tax increase without an
agreement.
Obama said he has invited congressional leaders to the White House this
coming week to start building consensus over how to avert that so-called
fiscal cliff.
The president said he was encouraged by remarks by the Speaker of the
House of Representatives, Republican John Boehner, about the need to
find new revenue.
Obama supports reforms to strengthen entitlement programs such as
Medicare, but he reiterated his insistence on raising taxes for
wealthier Americans and not making the middle class shoulder the burden
of paying down the deficit.
"I want to be clear. I am not wedded to every detail of my plan. I am
open to compromise. I am open to new ideas. I am committed to solving
our fiscal challenges, but I refuse to accept any approach that isn't
balanced," he said.
"I am not going to ask students and seniors and middle class families to
pay down the entire deficit while people like me making over $250,000
aren't asked to pay a dime more in taxes. I'm not going to do that," the
president added.
Earlier, Speaker Boehner said the fiscal cliff needs to be averted and
outlined what he called a "responsible path forward" without raising tax
rates.
He challenged the president to respond in a spirit of finding common
ground. "Earlier this week, the president and I had a short
conversation. It was cordial," he said.
"I think we both understand that trying to find a way to avert the
fiscal cliff is important for our country. And I’m hopeful that
productive conversations can begin soon so that we can forge an
agreement that can pass the Congress,” Boehner added.
Boehner said raising taxes on higher income earners will slow down job
creation. He said the contentious issue of raising the U.S. debt limit,
which caused the U.S. government's credit rating to be downgraded in
2011, will have to be addressed.
President Obama suggested that to provide more certainty in the economy,
the question of extending tax cuts for the middle class could be
separated from doing so for wealthier Americans, as negotiations
continue on a broader deficit reduction package.
In the U.S. election, he said, Americans voted for an end to dysfunction
in Washington.
"What the American people are looking for is cooperation. They are
looking for consensus," he said. "They are looking for common sense.
Most of all, they want action. I intend to deliver for them in my second
term, and I expect to find willing partners in both parties to make that
happen."
A
Congressional Budget Office report this week warned that the U.S.
economy could fall back into recession, and the jobless rate could rise
above 9 percent, if no deal is struck on averting the fiscal cliff.
What is the U.S. Fiscal Cliff?
An agreement intended to
force politicians to compromise and make deals.
Without a deal by January 1,
2013, sharp spending cuts would hit military and social programs.
Tax hikes also would go into
effect.
The combination would reduce
economic activity, and could boost unemployment and push the nation
back into recession.
