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Obama, GOP Leaders to Meet on Averting "Cliff"

Obama, GOP Leaders to Meet on Averting "Cliff"

By Alexis Simendinger and Caitlin Huey-Burns - November 9, 2012

President Obama will launch formal discussions with congressional leaders at the White House Nov. 16 aimed at heading off more than $600 billion in tax increases and spending cuts that loom as a statutory certainty after Dec. 31.

The meeting will be the first for the president and congressional leaders since Obama’s re-election Nov. 6, and will come one day before he departs on a week-long trip to Asia. The goal is a bipartisan pact to reduce the deficit and thereby boost economic growth by blending tax changes and spending reductions that take effect over a period of 10 to 12 years.

Faced with the press of time, significant leverage over Republicans who oppose tax hikes, and support from Americans who put him back in the Oval Office, Obama wants to negotiate swiftly. Economists believe the United States could drive itself back into recession if the White House and Congress fail to reach agreement this year.

Republican congressional leaders continued to push the responsibility for solving the so-called fiscal cliff onto the president, while expressing a willingness to work with him to avert it. But they rejected Obama’s request to pass the Senate bill that would extend the Bush-era tax rates for middle-income families only, retaining their longstanding opposition to raising tax rates on any Americans, arguing that such would negatively affect small-business owners.

Obama also stressed a willingness to negotiate.

“I've put forward a detailed plan that allows us to make these investments while reducing our deficit by $4 trillion over the next decade,” he said at an East Room event Friday. “I want to be clear: I'm not wedded to every detail of my plan. I'm open to compromise. I'm open to new ideas. I'm committed to solving our fiscal challenges.”

The president delivered his 10-minute prepared statement surrounded by more than 200 people described by the White House as middle-income “stakeholders” who would be impacted if the government fails to avoid the cliff.

Obama took no questions from reporters packed into the far reaches of the room, and the White House later said the president will wait until Nov. 14 before meeting with reporters on a range of subjects. (Predecessors who won re-election -- stretching back at least to Ronald Reagan -- held news conferences within two or three days of Election Day, but White House Press Secretary Jay Carney said Obama had been interviewed by television and radio frequently in October and November.)

Although the president said he has an open mind, he made clear he will begin the discussions having ruled out options sought by Republicans. He insists on an end to the Bush-era tax breaks for families earning more than $250,000 a year; an extension of the existing tax breaks that benefit families earning less than $250,000 annually; a “balance” of revenue increases along with new reductions to spending to curb deficits; and credit for the $1 trillion in spending cuts agreed to and enacted into law during the summer of 2011.

“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,” Obama said. “This was a central question during the election. It was debated over and over again. And on Tuesday night, we found out that the majority of Americans agree with my approach. And that includes Democrats, independents and a lot of Republicans across the country, as well as independent economists and budget experts.”

Because the two parties tried and failed to achieve a “grand bargain” worth $4 trillion in deficit reduction the last time they negotiated, the operating assumption is that $4 trillion remains the overarching goal. Democrats in Congress have discussed a threshold ratio of $2 in total spending reductions to every $1 of revenue increases included in any pact.

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Alexis Simendinger covers the White House for RealClearPolitics. She can be reached at asimendinger@realclearpolitics.com. Caitlin Huey-Burns is a reporter for RealClearPolitics. She can be reached at chueyburns@realclearpolitics.com.

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