President Barack Obama appealed for cooperation and compromise from US congressional leaders today, saying that surmounting the so-called fiscal cliff at year's end is "urgent business." Obama spoke as he convened these leaders at the White House for an opening round of deficit talks—their first meeting since the November 6 election.
Obama has insisted that any deal involve higher taxes on the top 2 percent of income earners. Republicans leaders are vowing to resist rate hikes as job-killers, though they have signaled they're open to added revenue through curbs on tax deductions and credits.
The combination of tax hikes and automatic spending cuts will hit January 1 unless lawmakers and Obama act. Top economists have warned the nation could be plunged back into recession if they do not.
Although Obama's Republican rivals have talked of revenue in terms other than higher tax rates, Democrats face pressure from liberal interest groups to avoid cutting big benefit programs like health care for the elderly and food stamps.
It is up to Obama to navigate the course toward an agreement. At issue is a one-two punch of expiring Bush-era tax reductions and across-the-board spending cuts set to hit in January as punishment for the failure of a gridlocked Congress to reach a deficit-cutting deal last year.
Economists and business leaders warn the combination could send the economy back into recession, and all sides in Washington say they want to avoid going over the cliff.
Attending the meeting with Obama were the top four leaders of Congress: House Speaker John Boehner, a Republican, Minority Leader Nancy Pelosi, a Democrat, Senate Majority Leader Harry Reid, a Democrat and Minority Leader Mitch McConnell, a Republican.
The White House says Obama's starting point for negotiations is his February budget plan, which combined USD 1.6 trillion in new revenues over the coming decade, chiefly from upper-income earners, with modest cuts to benefits programs. Obama's plan promises $4.4 trillion in deficit cuts over 10 years, but more than half of that comes by banking already accomplished cuts and questionable savings from winding down military operations in Iraq and Afghanistan.