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Obama, Leaders Want Fiscal Deal by Christmas

Obama, Leaders Want Fiscal Deal by Christmas

By Alexis Simendinger and Caitlin Huey-Burns - November 16, 2012

President Obama and congressional leaders agreed Friday to aim for a Christmas deadline to iron out a new budget deal that would avert higher taxes and deep spending cuts poised to take effect in January.

Republicans said they will accept higher revenues if paired with changes to entitlement programs, which they see as the long-term drivers of deficits.

"To show our seriousness, we put revenue on the table as long as it's accompanied by significant spending cuts," House Speaker John Boehner said. “And while we're going to continue to have revenue on the table, it's going to be incumbent on my colleagues to show the American people that we're serious about cutting spending and solving our fiscal dilemma. I believe we can do this and avert the fiscal cliff that is right in front of us today."

After an hour together in the Roosevelt Room of the White House, the tone among the negotiators sounded conciliatory, but the specifics of a bipartisan deal for as much as $4 trillion in deficit reduction remained a work in progress. (Making a friendly fuss over Boehner’s 63rd birthday on Saturday, Obama presented the speaker with a bottle of 1997 Poggio Antico Altero Brunello di Montalcino.)

Speaking side-by-side for the first time since the election, Boehner, Senate Majority Leader Harry Reid, House Minority Leader Nancy Pelosi and Senate Minority Leader Mitch McConnell pledged a willingness to work together with a short timetable in mind.

“We have cornerstones of being able to work something out,” Reid said. “We're going to do it now. . . . We have a plan. We're going to move forward on it. . . . I think it was a very constructive meeting and I feel very good about what we were able to talk about."

Obama continued to insist that existing tax breaks for the middle class, set to end in December, should continue into 2013, while taxes on the top 2 percent of all filers should rise. Even McConnell, who issued a statement on election night arguing that America was divided over Obama’s tax stance, sounded a soothing note Friday.

"We are prepared to put revenue on the table provided we fix the real problem,” the Kentucky conservative said, adding that his conference continued to believe “that we're in the dilemma we're in not because we taxed too little, but because we spent too much."

Boehner said he presented the offer he sketched out in his remarks at the Capitol on Nov. 7. While he backs higher revenues, he has not embraced higher marginal tax rates. And while Boehner said House Republicans seek a transformative budget deal, they want to postpone the fiscal cliff for a year to allow more time for broader negotiations.

In effect, they want a “framework” accord this year with broad goals and new triggers to enforce action in 2013. Obama, during his news conference this week, described his search for an agreement on a budget “structure,” suggesting that all sides concur there is probably not enough time in the lame-duck session to write and pass detailed new budget legislation.

Boehner proposed setting “targets” for spending cuts and revenue increases tied to an enforcement mechanism that would remain in place until lawmakers come up with more substantial policy.

By postponing the cliff and buying time, Republicans believe the new Congress in 2013 will be able to fill in the statutory details for taxes, revenue levels and entitlement reforms. If the next Congress fails to act as instructed, another enforcement mechanism would conceivably confront Washington under that scenario.

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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.

Alexis Simendinger and Caitlin Huey-Burns

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