'Fiscal Cliff' Talks Feel Wintry Chill
Dec. 6, 2012 -- A chill has descended on Washington just in time for tonight's lighting of the National Christmas Tree.
President Obama will preside over an evening festival of star-studded carols and sparkling displays of holiday cheer on the White House Ellipse.
But don't expect any of the holiday good will to warm the political frost over the fiscal cliff talks.
The White House is mandating that tax hikes for the wealthiest Americans must be part of any deficit-reduction deal with congressional Republicans, who stand equally opposed. Negotiations have ground to a standstill.
"I'm not going to sign any package that somehow prevents the top rate from going up for folks in the top 2 percent," Obama said during a visit with a middle class family in northern Virginia.
"I'm encouraged to see that there's been some discussion by Republicans acknowledging the need for additional revenue," he said. "But the only way to get the kind of revenues we need is to modestly increase rates on folks like me."
Treasury Secretary Timothy Geithner, the lead Democratic negotiator in "cliff" talks, said Wednesday the administration is "absolutely" willing to allow the package of deep automatic spending cuts and across-the-board tax hikes to take effect Jan. 1 if they don't get some increase in top rates.
Obama spoke by phone with House Speaker John Boehner on Wednesday, the first time both men had been in contact in one week. On Monday, Boehner attended a White House holiday party but did not greet Obama. The two have no public meetings scheduled, aides said.
"Conversations continue; lines of communication remain open between the White House and Congress," White House press secretary Jay Carney said today. "But we're not there yet."
Republicans say Obama has fixated on tax hikes for the rich at the exclusion of entitlement program reforms to curb spending, which they are seeking as part of a "balanced" deal.
"The president talks about a balanced approach, but he's rejected spending cuts that he has supported previously and refuses to identify serious spending cuts he is willing to make today," Boehner said Wednesday. "This is preventing us from reaching an agreement."
Obama's roadtrip to Virginia amid the showdown was unlikely to win over any Republicans on taxes, though he used the photo op to stress the importance of doing what both sides agree: extending current, lower tax rates for 98 percent of U.S. earners.
The average American family of four would pay an estimated $2,200 more in taxes next year if the rates for middle-income earners are not extended.
"It's very important we get this done now, we don't wait," Obama said. "The closer it gets to the brink, the more stressed were going to be."
Economists say a failure to resolve the standoff before Dec. 31 could thrust the U.S. economy back into a recession, a prospect many Americans are also worried about, according to a new poll.
Fifty-three percent of voters say lawmakers' failure to avoid the "cliff" would be "bad for their personal financial situation," compared to just 13 percent who said it wouldn't, according to the Quinnipiac University Polling Institute.
The same poll found a majority – 53 percent – trusting Obama and Democrats more than Republicans to work out a deal in the deficit negotiations.
