President Barack Obama and congressional leaders struck an upbeat tone following the opening round of talks about avoiding the so-called fiscal cliff, and deep, across-the-board defense cuts.
The Nov. 16 talks came 46 days before massive cuts to planned federal domestic and defense programs would kick in unless Congress sends the president a $1.2 trillion deficit-reduction plan he is willing to sign. If lawmakers and Obama fail, a $500 billion, decade-spanning cut to planned military spending would take effect Jan. 2.
In a statement issued shortly after the first round of talks, the White House called the negotiations “constructive,” adding Obama and the leaders of the House and Senate “agreed to do everything possible to find a solution that averts the so-called fiscal cliff.”
All eyes are focused on these efforts because economists of all political stripes say if those cuts — done without strategic calculations — are triggered at the same time a slew of tax cuts also expire, the American economy would tumble into its second deep recession in five years. Pentagon officials, hawkish lawmakers and analysts also warn the nonstrategic nature of the military cuts would hurt national security, though some experts disagree.
“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,” the White House said.
House Speaker John Boehner, R-Ohio, said after exiting the White House that he laid out a “framework” that focuses on “reforming our tax code and reforming our spending.” Boehner added he believes his framework is consistent with the “balanced approach” the president and congressional Democrats are demanding.
“To show our seriousness, we’ve put revenue on the table as long as it’s accompanied by significant spending cuts,” Boehner told reporters. The speaker said he is “confident” about a deal.
“I feel very good about what we were able to talk about in there,” said Senate Majority Leader Harry Reid, D-Nev. “We have the cornerstones of being able to work something out. We’re both going to have to give up some of the things that we know are a problem.”
During the hour-long meeting, “we had a recognition that every person in America knows that we must reach an agreement,” said House Minority Leader Nancy Pelosi, D-Calif.
Boehner reiterated his longtime stance that a so-called grand bargain deal that reforms the tax code, alters domestic entitlement programs and cuts other federal spending — while also raising new revenues — will have to wait until the new Congress is seated next year. More time will be needed to complete such a comprehensive package than is available in the remaining month of the lame duck Congress, Boehner and others said.
But Pelosi said she also thinks it is important that “we send a message of confidence to consumers, to the markets, in the short run, too.
“We should have a goal in terms of how much deficit-reduction,” Pelosi said. “We should have a deadline before Christmas. We should show some milestones of success so that confidence can build as we reach our solution.”
Notably, she said, “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.”
Senate GOP leader Mitch McConnell said federal entitlements must be reformed to match the changing demographics of the nation, but he also called for big federal spending cuts.
Reid said the quartet is slated to huddle again with Obama the week of Nov. 26, when Congress returns from its weeklong Thanksgiving recess. Obama is slated to travel to Asia from Nov. 17-19. The White House said senior aides will continue talking to congressional leaders about the construct of a deal.