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| Fiscal cliff negotiations progress as Congress indicates cautious optimism | Fiscal cliff negotiations progress as Congress indicates cautious optimism |
| (8 days later) | |
| Congressional leaders expressed cautious optimism Friday about reaching a deal with the Obama administration that will avert a debt and spending crisis next year. | Congressional leaders expressed cautious optimism Friday about reaching a deal with the Obama administration that will avert a debt and spending crisis next year. |
| An hour-long meeting with Barack Obama at the White House, aimed at finding a deal to avoid the so-called fiscal cliff, was described as "constructive". | An hour-long meeting with Barack Obama at the White House, aimed at finding a deal to avoid the so-called fiscal cliff, was described as "constructive". |
| Republican leaders, normally vehemently opposed to tax rises, at least for the wealthy, agreed to put revenue-raising measures on the table, though without specifying what they might be. Democratic leaders agreed to spending cuts, again without going into specifics. | Republican leaders, normally vehemently opposed to tax rises, at least for the wealthy, agreed to put revenue-raising measures on the table, though without specifying what they might be. Democratic leaders agreed to spending cuts, again without going into specifics. |
| With the need for a deal in place by 1 January to avoid the automatic imposition of across-the-board tax rises and severe spending cuts, there was a sign of some urgency entering the negotiations. Republicans and Democrats agreed at the White House to continue talking with administration officials through the weekend and into next week, even though Obama will be away on a visit to Asia for most of this time. | With the need for a deal in place by 1 January to avoid the automatic imposition of across-the-board tax rises and severe spending cuts, there was a sign of some urgency entering the negotiations. Republicans and Democrats agreed at the White House to continue talking with administration officials through the weekend and into next week, even though Obama will be away on a visit to Asia for most of this time. |
| The aim, said one Republican official, is to have a deal ready to put on the table after the Thanksgiving holiday. | The aim, said one Republican official, is to have a deal ready to put on the table after the Thanksgiving holiday. |
| The rhetoric from both sides is much more muted and conciliatory compared with last year's all-out confrontation, with the Republicans apparently chastened from their presidential election defeat and Obama in a much more bullish and confident mood. They know that in the worst case scenario that Democrats have the option of letting America go over the fiscal cliff – with a resulting sharp rise in taxes for tens of millions of Americans – and blame Republicans for the outcome. | The rhetoric from both sides is much more muted and conciliatory compared with last year's all-out confrontation, with the Republicans apparently chastened from their presidential election defeat and Obama in a much more bullish and confident mood. They know that in the worst case scenario that Democrats have the option of letting America go over the fiscal cliff – with a resulting sharp rise in taxes for tens of millions of Americans – and blame Republicans for the outcome. |
| Obama's press spokesman, Jay Carney, said after the meeting: "The president and the leadership had a constructive meeting and agreed to do everything possible to find a solution that averts the so-called fiscal cliff, and to work together to find a balanced approach to reduce our deficit that includes both revenues and cuts in spending and encourages our long-term economic and job growth. | Obama's press spokesman, Jay Carney, said after the meeting: "The president and the leadership had a constructive meeting and agreed to do everything possible to find a solution that averts the so-called fiscal cliff, and to work together to find a balanced approach to reduce our deficit that includes both revenues and cuts in spending and encourages our long-term economic and job growth. |
| "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." | "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." |
| Stock markets reacted positively to the news. The Dow Jones Industrial Average has fallen for three consecutive days on fears that talks were likely to break down. Economists and business leaders have warned that the fiscal cliff threatens to plunge the US back into recession and the Congressional Budget Office has predicted unemployment will spike to 9.1% next year if is a solution isn't found. The Dow and all the other major US exchanges began to rise Friday as a breakthrough appeared to be on the horizon. | Stock markets reacted positively to the news. The Dow Jones Industrial Average has fallen for three consecutive days on fears that talks were likely to break down. Economists and business leaders have warned that the fiscal cliff threatens to plunge the US back into recession and the Congressional Budget Office has predicted unemployment will spike to 9.1% next year if is a solution isn't found. The Dow and all the other major US exchanges began to rise Friday as a breakthrough appeared to be on the horizon. |
| One of the biggest sticking points is Obama's insistence that Bush-era tax cuts for the wealthiest will come to an end in January, a move that is opposed by Republicans. But there is room for compromise: Obama could limit any tax rises to households earning more than $500,000 a year rather than the $250,000 a year that he currently proposes. He may also agree that the tax rate for these households could rise to a level lower than the 39.6% he favours. | One of the biggest sticking points is Obama's insistence that Bush-era tax cuts for the wealthiest will come to an end in January, a move that is opposed by Republicans. But there is room for compromise: Obama could limit any tax rises to households earning more than $500,000 a year rather than the $250,000 a year that he currently proposes. He may also agree that the tax rate for these households could rise to a level lower than the 39.6% he favours. |
| The Republicans, House speaker John Boehner and Senate minority leader Mitch McConnell, speaking to reporters after the meeting, put the stress on cutting the deficit, without specifying which areas they have mind, though both have said in the past that healthcare spending has to be curbed. The two Democrats, Senate majority leader Harry Reid and the party leader in the House Nancy Pelosi, put the emphasis on raising taxes. | The Republicans, House speaker John Boehner and Senate minority leader Mitch McConnell, speaking to reporters after the meeting, put the stress on cutting the deficit, without specifying which areas they have mind, though both have said in the past that healthcare spending has to be curbed. The two Democrats, Senate majority leader Harry Reid and the party leader in the House Nancy Pelosi, put the emphasis on raising taxes. |
| A deal rests on Boehner's ability to control Tea Party-backed House Republicans. He and Obama almost reached a deal last year but Boehner had to back off in the face of resistance from his colleagues. Many of those same Republicans, though subdued for the time being, have been re-elected. | A deal rests on Boehner's ability to control Tea Party-backed House Republicans. He and Obama almost reached a deal last year but Boehner had to back off in the face of resistance from his colleagues. Many of those same Republicans, though subdued for the time being, have been re-elected. |
| But after the White House meeting Boehner stressed he was ready for compromise. "To show our seriousness we put revenue on the table as long as it's accompanied by significant spending cuts," he said. | But after the White House meeting Boehner stressed he was ready for compromise. "To show our seriousness we put revenue on the table as long as it's accompanied by significant spending cuts," he said. |
| "And while we're going to continue to have revenue on the table it's going to be incumbent on my colleagues to show the American people that we're serious about cutting spending and solving our fiscal dilemma. I believe we can do this and avert the fiscal cliff that is right in front of us today." | "And while we're going to continue to have revenue on the table it's going to be incumbent on my colleagues to show the American people that we're serious about cutting spending and solving our fiscal dilemma. I believe we can do this and avert the fiscal cliff that is right in front of us today." |
| Boehner's plan is to set long-term targets for revenue and spending and introduce short-term measures this year aimed at meeting them while negotiations continue next year, the Republican official said. | Boehner's plan is to set long-term targets for revenue and spending and introduce short-term measures this year aimed at meeting them while negotiations continue next year, the Republican official said. |
| Reid, standing alongside Pelosi and the two Republicans, also sounded mildly optimistic. "This is the first time we've dealt with these issues and feel we understand what the problem is. I felt very good about what we were able to talk about in there. We have the cornerstones of being able to work something out," Reid said. "We have arrived at a point where we all know that something has to be done." | Reid, standing alongside Pelosi and the two Republicans, also sounded mildly optimistic. "This is the first time we've dealt with these issues and feel we understand what the problem is. I felt very good about what we were able to talk about in there. We have the cornerstones of being able to work something out," Reid said. "We have arrived at a point where we all know that something has to be done." |
| Pelosi said that without an agreement there will be an economic downturn. "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 do to so in a way that promotes growth and supports our future. It was good." | Pelosi said that without an agreement there will be an economic downturn. "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 do to so in a way that promotes growth and supports our future. It was good." |
| McConnell, who only last week said Republicans had not been sent to Congress to raise taxes, said: "We are prepared to put revenue on the table provided we fix the real problem." | McConnell, who only last week said Republicans had not been sent to Congress to raise taxes, said: "We are prepared to put revenue on the table provided we fix the real problem." |
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