Lawmakers return to Washington today amid a potential thaw in the U.S. fiscal policy dispute, as President Barack Obama and House Speaker John Boehner attempt to make a deal to prevent spending cuts and tax increases from taking effect.
Obama sounded conciliatory notes at a Daimler AG plant in Michigan yesterday. In his first comments since meeting with Boehner Dec. 9 at the White House, the president didn’t repeat frequent complaints about Republicans holding tax cuts for most Americans “hostage” because they oppose higher rates for wealthiest, and said he was ready to come to an agreement. Since Boehner complained Dec. 7 that Obama had wasted a week, statements from the speaker’s office have been milder, too.
“There is a change in tone, obviously,” Julian Zelizer, professor of history and public affairs at Princeton University in New Jersey, said in an interview. After building public support for higher tax rates for the highest earners, he said, Obama is negotiating and “preparing his own party for a possible deal” by sending signals about his willingness to cut entitlement programs including Medicare and Medicaid.
While the private talks continue between the administration and aides to Boehner, each side is insisting publicly that the other must give in first. The result is a prolonged wait for more than 500 members of Congress who aren’t talking with Obama and will have to decide if they can accept a deal that he and Boehner may ultimately reach.
Lawmakers Wait
“We continue to wait for the president to identify the spending cuts he’s willing to make as part of the ‘balanced’ approach he promised the American people,” Michael Steel, a spokesman for Boehner, an Ohio Republican, said yesterday in an e-mailed statement.
Democratic lawmakers and Obama continue to insist that Republicans accept higher tax rates for top earners before they will propose spending cuts.
“Let’s get it done,” Obama said to workers at a plant owned by Daimler AG’s Detroit Diesel unit in Redford, Michigan. “I will work with the Republicans on a plan for economic growth, job creation and reducing our deficits.”
If Congress doesn’t act, more than $600 billion in tax increases and spending cuts will start taking effect Jan. 1. Tax rates for income at all levels would rise, along with taxes on estates, capital gains and dividends.
Recession Concern