Early 'fiscal cliff' talks show possible path to deal


Published — Sunday 18 November 2012

Last update 18 November 2012 5:58 am

| نسخة PDF Print News | A A

WASHINGTON: President Barack Obama and top lawmakers agreed on Friday to work on a framework for reforming the US tax code and "entitlement" programs next year, in what could be an important first step in averting the upcoming 'fiscal cliff."
While the congressional leaders and the president had spoken individually in the past week in public statements about a construct for going forward, Friday's session marked the first time they sat in a room together and struck a similar chord.
An agreement to discuss tax and entitlement reform, most pressingly Medicare, the health program for the elderly, would not be sufficient to solve the more immediate problem of averting the fiscal cliff, the broad tax increases and spending cuts set to start in January.
But a promise for the future is seen as necessary to convince members to compromise in the here and now, probably by replacing the relatively extreme fiscal cliff measures with less harmful deficit-reduction steps.
The development came during the first meeting between Obama and Republican and Democratic congressional leaders since the election. Attending were the president, Boehner, Republican Senate Minority Leader Mitch McConnell, Democratic Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi.
Following the hour-long White House meeting, Boehner said at he had "outlined a framework that deals with reforming our tax code and reforming our spending."
A Boehner aide, who asked not to be identified, said later the spending cuts would cover "entitlements" — the large federal benefit programs that include Medicare healthcare for the elderly and Medicaid for the poor.
"This is a construct all present (in the White House meeting) agreed was needed," the aide said.
A Democratic aide, who also asked not to be identified, did not dispute that tax and entitlement reforms had to be worked on next year.
The aide added that the "key discussion right now" is what to do about across-the-board income tax rates that will rise in January if Congress cannot agree on a new deficit-reduction deal.
"The major development of the meeting was we made it clear our position is ... we should freeze tax rates for the middle class and raise rates on the top (income) families," the Democratic aide said. "It was notable that neither Boehner nor McConnell shot that idea down."
While great uncertainty remains, Friday's steps were not insignificant.
Obama's core supporters, who turned out in droves to ensure his re-election, are already fighting hard to protect benefit programs for the poor, disabled and elderly that Republicans want to cut because of their rising costs.
It is therefore meaningful that Democratic leaders at least say those entitlements are open for discussion.
Conservatives in Congress bristle at the notion of raising any income tax rates, including for the wealthy.
After decades of Republicans insisting that Washington had a spending problem, not a revenue problem, the Republican leaders are at least now saying they are prepared to put revenues on the bargaining table.
Details, which have wrecked deficit talks in the past, are missing. On the entitlement cuts, for example, would they primarily hit middle-class beneficiaries, wealthy participants, or medical providers such as hospitals?
In public, the Republican leaders did not say whether the offer to negotiate on revenues meant merely closing some tax loopholes benefiting special interests and counting on future revenue growth from an improving US economy or, whether as Democrats hope, they were signaling they might finally say yes to raising tax rates on the rich.
Reid and Pelosi, said a senior Senate Democratic aide, "feel they're making progress (with Republicans) on tax cuts for the rich." The aide predicted that "there will be some back and forth" in coming weeks before Republicans finally succumb.
How far any of the talking goes will not be known until Congress returns in late November from a Thanksgiving holiday recess and the real, nitty-gritty negotiating begins.
Reid and Obama huddled in the White House earlier this week alone, without any aides present.
According to a source who did not want to be identified, Reid wanted to gauge Obama's spine — whether he would stand firm on raising taxes for those families with net incomes above $250,000.
For many Democrats, December 2010 was all too painful a memory, as Obama caved in to Republican demands that all tax cuts, including those for the richest, be extended through this year.
The source said Reid left that meeting convinced the newly re-elected president would stand firm.
That gave Reid the confidence he needed to assure rank-and-file Democratic senators, the source added. Without those assurances, there was no way Reid could begin preparing his members for the Medicare cuts that could lie ahead.
So lawmakers have gone home for the holiday on an upbeat note but knowing it will be tough to hammer out a December deal.
Reid returned to the Capitol on Friday telling reporters that "there were no harsh words" uttered during the White House meeting — a big accomplishment on the heels of a bitter election season.

What's happening around Saudi Arabia

JEDDAH: The Kingdom has taken the right approach to counter the operations of terrorists groups, which includes cutting off their funding, according to several leading experts.This comes in the wake of Saudi Arabia blacklisting on Thursday 12 people...
RIYADH: The Ministry of Commerce and Industry (MCI) won the award for providing the Best E-Government Service among Gulf Cooperation Council countries.The award, “Best E-Government Service” for the E-Commercial Registration, was given during the four...
RIYADH: The Kingdom and Britain signed an executive agreement on Wednesday in Riyadh on medical training for Saudi postgraduate students on specialized subjects.The agreement was signed by Health Minister Khalid Al-Falih and Minister of State for Com...
JEDDAH: Of youths under the age of 20, 5 to 10 percent suffer from diabetes, said Vice President of the Saudi Society for Children’s Medicine and head of the third annual conference for diabetes patients Abdul Aziz bin Abdullah Al-Toweim.The two-day...
TAIF: Voters taking photographs inside election booths would have their votes disqualified for the municipal council elections taking place on Dec. 12, according to Taif’s election committee.They would also be excluded if they use their mobile phones...
ISLAMABAD: Jamia Ashrafiya President Sheikh Fahad Rahim has lauded the role of Custodian of the Two Holy Mosques King Salman as well as the Muslim World League (MWL) in serving the cause of Islam and uniting Muslims around the world.He was speaking d...
JEDDAH: The Memon Welfare Society (MWS) felicitated meritorious students from the community at its fourth annual awards distribution ceremony here recently.Abdullah Yousuf was the first to come and take his prize for securing top position in Grade 8...
RIYADH: A Filipino worker claims that he has been waiting for over a year for his former company to pay him SR68,880, which is his end-of-service benefit after leaving the company last November and returning home.Bukhari Nor Cali, 59, from Mindanao,...
JEDDAH: Adults are often the last ones to know when a child is bullied at school. However, parents or school authorities should step in if any child is being beaten, threatened or taunted by another pupil. A high school boy was beaten up and harassed...
RIYADH: Six winners — five authors and a researcher from scientific and educational institutions — have been announced as winners in the King Abdul Aziz Book Award this year.The committee for the King Abdulaziz Book Award said the works of the winner...
RIYADH: The Kingdom now has 67 female lawyers out of 3,400 in the country, according to a report released by the Justice Ministry.The report said that 65 male lawyers were registered at the beginning of the Islamic year on Oct. 14, and four female la...
JEDDAH: Jeddah police are investigating the theft and signature forgery of six checks from the Jeddah municipality headquarters.The Anti-Forgery Department was assigned to locate all information related to the check forgery cases. Local media estimat...
MAKKAH: Certain areas of Makkah witness a regular scene in the morning of a number of men waiting for car-washing work and make some money.After their morning duties, these men leave for other work as plumbers, electricians and rock breakers in mount...
RIYADH: A ‘Diabetes Detection’ campaign has been launched under the National Diabetes Prevention and Control Program of the Ministry of Health (MoH).The MoH has joined efforts with the Al-Abeer Medical Group, KIMS Sun City medical centers and the AXA...
RIYADH: Foreign Minister Adel Al-Jubeir said on Thursday that a military option in Syria was still viable and support for the opposition fighting to oust President Bashar Assad would continue.Speaking at a news conference with visiting Austrian Forei...

Events & Exhibitions

Stay Connected