Signs of drift in 'fiscal cliff' talks

Signs of drift in ‘fiscal cliff’ talks

By Lisa Mascaro and Melanie Mason, Washington Bureau

Dec. 13, 2012 12 AM PT

WASHINGTON — President Obama called House Speaker John A. Boehner to the White House on Thursday night to try to break the deadlock in the year-end budget talks, but their third face-to-face session ended after nearly an hour with no sign of progress.

Earlier in the day, a top Senate Democrat said increasing the Medicare eligibility age was off the table — an important stance to liberal Democrats.

Publicly, the two sides appear to be drifting apart as Boehner, in a feisty moment during a morning news conference at the Capitol, insisted that spending cuts deeper than the president has proposed must be part of the deal.

“Spending is the problem,” the Ohio Republican said, raising his voice at times as he pointed to a chart beside him. “That’s why we don’t have an agreement.”

But recent polls on how to deal with the “fiscal cliff,” the automatic year-end tax increases and spending cuts, have emboldened Democrats, who see no reason to budge. The results show Americans favor the president’s position that taxes should go up on the top 2% of Americans.

For the first time, a majority of Republicans — nearly 60% — want their party’s leaders to compromise to reach a deal, according to an NBC/Wall Street Journal poll. That represents a marked shift from last year, when most Republicans wanted their party to stick to its positions.

“The big problem right now is that the Republicans in the House are resistant to the idea of the wealthiest Americans paying higher tax rates, and I understand they have a philosophical objection,” Obama told WCCO-TV, a Minneapolis station, in an interview at the White House.

“What I don’t want to do is ask seniors to pay a lot more up for Medicare, or young people to pay a lot more for college because they’re not getting the same deal on student loans, just to finance a tax cut for me,” he continued. “I think that if we can get that change in attitude on that particular issue, we should be able to get something done before the end of the year.”

Boehner was invited to the evening meeting with the president and Treasury Secretary Timothy F. Geithner after the House recessed for a long weekend. Lawmakers have been told to expect to stay in Washington over the holidays.

The exchange between the House speaker and the president was “frank,” according to almost identical statements from the two offices, and “the lines of communication remain open.”

If no deal is reached, income tax cuts established during the George W. Bush administration will expire on Dec. 31, leading to a $2,200 tax increase on the average American family next year. Massive spending cuts, agreed to as part of an earlier budget deal, would also begin next year. This so-called fiscal cliff could seriously damage the fragile economy.

Obama is urging Congress to keep tax rates the same for the first $250,000 of income for families and $200,000 for individuals, but raise rates on income above that level, affecting the wealthiest 2% of Americans. The Democratic-controlled Senate has passed such a bill, while the House has voted to extend the rates for everyone.

Boehner is under immense pressure from his right flank in the House GOP majority not to give Obama a victory. The speaker drew on the popularity of Rep. Paul D. Ryan of Wisconsin on Thursday, using a chart from the House Budget Committee, which Ryan heads. The former Republican vice presidential nominee is influential among House conservatives.

Republicans want more than twice as much in spending reductions as Obama has been willing to consider. But Senate Democrats made it clear Thursday during a lunch meeting with Gene Sperling, director of the White House’s National Economic Council, that they have no interest in slashing Medicare, Medicaid and Social Security, as Boehner wants.

Obama had previously considered raising the Medicare eligibility age, now 65, as part of past budget talks.

“That’s not on the table,” said Sen. Richard J. Durbin of Illinois, the No. 2 Democrat in the Senate.

“Don’t even think about raising the Medicare age,” said House Minority Leader Nancy Pelosi of San Francisco. “We are not throwing America’s seniors over the cliff to give a tax cut to the wealthiest people in America.”

Although the new polls, including one from the Pew Research Center, show the president’s approval ratings on the rise, both sides could pay the price if they fail to come to a deal. The NBC/Wall Street Journal poll found that 24% of Americans would blame Republicans, 19% would blame Obama and Democrats, and a majority, 56%, would blame both sides.

White House Press Secretary Jay Carney acknowledged that the talks had gone “beyond” the 11th hour. But the president sounded a more optimistic note as he strolled across Pennsylvania Avenue earlier in the day to attend an office Christmas party.

“Still a work in progress,” Obama said.

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Michael A. Memoli and Christi Parsons in the Washington bureau contributed to this report.