Hill leaders voice new confidence in deficit deal

Associated Press Modified: November 16, 2012 at 2:32 pm •  Published: November 16, 2012

WASHINGTON (AP) — Congressional leaders from both parties voiced fresh optimism Friday after meeting with newly re-elected President Barack Obama about avoiding year-end "fiscal cliff" tax increases and spending cuts that would hammer the middle class and risk plunging the economy into recession.

House Speaker John Boehner of Ohio said Republicans are willing to consider increased revenue "as long as it is accompanied by spending cuts" as leaders in a divided government get to work on a possible deal after a fierce election campaign.

Democrats indicated that was fine with them. "I feel confident that a solution may be in sight," said House Democratic leader Nancy Pelosi of California.

The goal of the high-pressure talks to come is to produce a multitrillion-dollar deficit-reduction plan that can take the place of the across-the-board tax increases and spending cuts that are slated to take effect on Jan. 1.

In remarks while reporters were present, Obama stressed that time was short as he welcomed the leaders to the White House for the first time since winning re-election this month. "We have urgent business to do," he said.

There was no indication that the meeting touched on Obama's campaign-long call to raise tax rates at upper incomes.

In their public comments, neither the president nor the lawmakers dwelt on long-standing differences that doomed previous deficit negotiations. Senate Republican leader Mitch McConnell came closest, telling reporters that while Republicans are willing to discuss increased revenue, most members of his party "believe we are in the dilemma we are in not because we tax too little but because we spend too much."

After the meeting, White House Press Secretary Jay Carney said, "Both sides agreed that while there may be differences in our preferred approaches, we will continue a constructive process to find a solution and come to a conclusion as soon as possible."

For all the expressions of optimism, it was unclear whether the Nov. 6 elections and the prospect of the so-called fiscal cliff would serve as a strong enough catalyst for these talks to succeed where other recent attempts have failed.

Obama ran for a new term calling for a "balanced approach" to deficit reduction that includes raising taxes on income over $200,000 a year for individuals and $250,000 for couples. And while the president has stated a willingness to pull federal savings out of benefit programs including Medicare and Medicaid, Democratic leaders have been reluctant to go along.

Raising taxes has long been anathema to Republicans, who say government's spending must be cut to reduce deficits and taxes reduced to stimulate job creation in an economy where unemployment is 7.9 percent.

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