Obama, GOP kick off fiscal cliff negotiations
The irresistible force of a triumphant president who thinks he has a mandate to raise taxes on the rich will meet the immovable object of Republican opposition today as negotiations to avoid the fiscal cliff of budget cuts and tax increases gets underway in Washington.
At issue is a combination of expiring tax cuts and across-the-board spending cuts set to hit in January ifObama and Congress can't reach a deal. Economists and business leaders warn the combination could send the economy back into recession, and all sides in Washington say they want to avoid going over the cliff.
Obama's Republican rivals promise greater flexibility on new tax revenues, but Democrats face pressure from liberal interest groups urging him to take a hard line and avoid cutting big benefit programs like Medicare - the government health care program that primarily benefits the elderly - and food stamps. It's up to Obamato navigate the course toward an agreement.
Attending the meeting with Obama are the top four leaders of Congress: Republican House Speaker John Boehner, Democratic Minority Leader Nancy Pelosi, Democratic Senate Majority Leader Harry Reid and Republican Minority Leader Mitch McConnell.
The White House says Obama's starting point for negotiations is his February budget plan, which combined $1.6 trillion in new revenues over the coming decade - chiefly from upper-income earners - with modest cuts to benefits programs. Obama's plan promises $4.4 trillion in deficit cuts over 10 years, but more than half of that comes by banking already accomplished cuts and questionable savings from winding down military operations in Iraq and Afghanistan.
Obama has been firm that taxes are going up on upper-bracket earners, though Boehner and McConnell are adamant that his campaign promise of raising the top income tax rate on family income exceeding $250,000 a year is a nonstarter.
Obama is betting that the GOP won't go over the cliff protecting the tax increase on the "rich." He may be right. But he is going to have to come up with real - not fake - budget cuts to get his way. A Grand Bargain along the lines of the deal that was nearly had last year that would see sizable cuts in Medicare tied to a small tax increase is possible now that Obama doesn't have to worry about his left flank. Liberals may not like it, but any negotiation that doesn't include entitlement reform will die an ignoble death.