President Obama met with congressional leaders at the White House on Friday to negotiate over the expiration of the Bush tax cuts and the looming problem of the so-called “fiscal cliff,” with the leaders agreeing that the meeting had been constructive.
“We had a very constructive meeting with the President to talk about America’s fiscal problem,” said Speaker of the House John Boehner, R-Ohio, in remarks to reporters following the meeting. “I outlined a framework that deals with reforming our Tax Code and reforming our spending. I believe that the framework that I’ve outlined in our meeting today is consistent with the President’s call for a fair and balanced approach. To show our seriousness, we’ve put revenue on the table, as long as it’s accompanied by significant spending cuts, and while we’re going to continue to have revenue on the table, it’s going to be incumbent for my colleagues to show the American people that we’re serious about cutting spending and solving our fiscal dilemma, and I believe that we can do this and avert the fiscal cliff that’s right in front of us today.”
Senate Majority Leader Harry Reid, D-Nev., noted that there has been a precedent for such meetings in the past. The Bush tax cuts were due to expire at the end of 2010, and Congress and the Obama administration agreed to extend them for another two years. He said they were prepared to work during the Thanksgiving recess to hammer out a plan.
“This isn’t the first time that we’ve dealt with these issues,” said Reid. “We feel we understand what the problem is, and I feel very good about what we were able to talk about in there. We have the cornerstones of being able to work something out. We’re both going to have to give up some of the things that we know are a problem, and so it’s like when we arrive at a point where we all know something has to be done. There is no more ‘let’s do it some other time.’ We’re going to do it now. I think that we feel very comfortable with each other, and this isn’t something where we’re going to wait until the last day in December to get it done. We have a plan. We’re going to move forward on it, and we’re going to work during the Thanksgiving recess. We’re going to meet with the President when we come back the first week. At least that’s as I understand it. So I think it was a very constructive meeting. I feel very good about what we were able to talk about.”
House Minority Leader Nancy Pelosi, D-Calif., echoed the upbeat nature of the comments, which appeared to be aimed at soothing the financial markets.
“It was a very constructive meeting,” said Pelosi. “We had a recognition that every person in America knows that we must reach agreement. The speaker spoke about a framework going into next year. I was focusing on how we send a message of confidence to consumers, to the markets, in the short run too. That is to say that we should have a goal in terms of how much deficit reduction. We should have a deadline before Christmas. We should show some milestones of success so that confidence can build as we reach our solution, because if we do not reach agreement, not only will we miss the opportunity for doing something good for our economy and lifting the spirits and the confidence in our country, we will have an economic downturn that must be avoided. We understand our responsibility there. We understand that it has to be about cuts. It has to be about revenue. It has to be about growth. It has to be about the future, so as we cut investments and as we talk about revenue, we have to do so in a way that promotes growth and supports the future. It was good. I feel confident that a solution may be in sight.”
Senate Minority Leader Mitch McConnell, R-Ken., emphasized that he was prepared to agree on ways to raise revenue, but said that entitlement programs should also be part of the discussion. “I can only echo the observations of the other leaders that it was a constructive meeting,” he said. “We all understand where we are. I can say on the part of my members that we fully understand that you can’t save the country until you have entitlement programs that fit the demographics of the changing America in the coming years. We’re prepared to put revenue on the table provided we fix the real problem, even though most of my members, I think without exception, believe that we’re in the dilemma we’re in not because we tax too little, but because we spend too much.”
Prior to the meeting, Obama greeted the lawmakers and presented Boehner with a birthday cake. “I think we're all aware that we have some urgent business to do,” he said. “We've got to make sure that taxes don't go up on middle-class families, that our economy remains strong, that we're creating jobs. And that's an agenda that Democrats and Republicans and independents, people all across the country share. So our challenge is to make sure that we are able to cooperate together, work together, find some common ground, make some tough compromises, build some consensus to do the people’s business. And what folks are looking for—and I think all of us agree on this—is action. They want to see that we are focused on them, not focused on our politics here in Washington. So my hope is, is that this is going to be the beginning of a fruitful process where we're able to come to an agreement that will reduce our deficit in a balanced way, that we will deal with some of these long-term impediments to growth, and we're also going to be focusing on making sure that middle-class families are able to get ahead. So I want to thank all the leadership for coming. And with that, we're going to get to work.”
For more news, analysis, and tax and financial planning strategies, see our "Fiscal Cliff Roundup."
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