Corporate leaders pressing for a solution to the so-called fiscal cliff are making their case at the White House and the Capitol a day after Senate Majority Leader Harry Reid lamented the lack of progress toward a deal.
Goldman Sachs Group Inc. (GS:US) Chief Executive Officer Lloyd Blankfein is among the executives scheduled to meet with President Barack Obama today. The president is seeking business support for his campaign to extend tax cuts for middle-income Americans while letting rates rise for top earners.
Speaker John Boehner and other House Republican leaders also met with Blankfein and other CEOs. Congress and the president are negotiating ways to avoid the $607 billion in tax increases and spending cuts scheduled to begin in January.
“I am optimistic that we can continue to work together to avert this crisis sooner rather than later,” Boehner told reporters today.
“We’re going to continue to work with the president in a way that is fair to the American people,” the speaker said. He pressed Obama and congressional Democrats to get “serious” about spending cuts, and maintained his opposition to letting tax cuts expire Dec. 31 for top earners.
Stocks pared losses as Boehner spoke. The Standard & Poor’s 500 Index slipped less than 0.2 percent to 1,396.38 at 10:38 a.m. in New York after sliding as much as 1 percent earlier.
The meetings with Obama and Boehner, the two chief negotiators, come a day after Reid said Democrats and Republicans have made little headway.
“There’s been little progress with the Republicans, which is a disappointment to me,” Reid, a Nevada Democrat, told reporters yesterday in Washington.
Following a Nov. 16 White House meeting between congressional leaders and Obama, Republicans backed away from earlier openness to considering new tax revenue as part of a year-end deal to avert the cliff, Reid said.
“They talked some happy talk about doing revenues, but we only have a couple weeks to get something done,” Reid said. “So we have to get away from the happy talk and start talking about specific things.”
Erskine Bowles, co-chairman of President Barack Obama’s 2010 fiscal commission, estimated today that there is a one- third probability the sides will strike a deal by the end of this year and another one-third chance that all sides will reach a deal early in 2013.
‘No Scientific Basis’
“There’s no scientific basis for me to say one-third; it’s just what I feel having spent my life as a negotiator,” Bowles, former chief of staff to President Bill Clinton, told reporters at a Christian Science Monitor breakfast in Washington.
Bowles, who isn’t directly involved in the budget talks, attended today’s meeting between executives and House Republicans and said afterward that he didn’t sense Republicans would budge on increasing tax rates on top earners.
“We’ve got a very long way to go and very few days to get there,” he said.
Chief executives invited to meet with Boehner included Douglas Oberhelman of Caterpillar Inc., Thomas Wilson of Allstate Corp. (ALL:US), David Cote of Honeywell International Inc. (HON:US) and Mark Bertolini of Aetna Inc. (AET:US)
Other chief executive officers scheduled to meet with Obama include Frank Blake of Home Depot Inc. (HD:US), Ken Frazier of Merck & Co., Muhtar Kent of Coca-Cola Co. (KO:US), Douglas Oberhelman of Caterpillar Inc. and Marissa Mayer of Yahoo! Inc.
Reid and House Minority Leader Nancy Pelosi, a California Democrat, also met today with some of the business leaders.
Face to Face
While both parties meet with stakeholders, Obama and congressional leaders haven’t scheduled another face-to-face session. A Democratic congressional aide said Nov. 26 that Obama is delaying inviting leaders back to the White House this week, as he had planned, because staff-level efforts had made little progress. The aide wasn’t authorized to discuss the talks publicly.
White House Press Secretary Jay Carney told reporters yesterday that it was “wrong” to say that negotiations between the White House and congressional leaders had broken down. He said Obama spoke with Boehner and Reid by telephone last weekend.
“Our team is continuing discussions with their congressional counterparts on this matter and it is entirely appropriate, I would say, both for the president and for leaders in Congress, to have this discussion not just among themselves, but with the American people,” Carney said.
Target of Rallies
“The target of the president’s rallies should be the congressional Democrats who want to raise tax rates on small businesses rather than cut spending,” Boehner spokesman Michael Steel said in an e-mail.
“Republicans understand that we must avert the fiscal cliff and have laid out a framework to do so that is consistent with the ‘balanced’ approach the president says he wants,” Steel said.
Boehner has said he would oppose increases in marginal tax rates, while suggesting he could support limits on deductions or other ways of increasing taxes on high earners. He has said he wants to take in any additional revenue through economic growth and an overhaul of the tax code.
Senate Minority Leader Mitch McConnell, a Kentucky Republican, yesterday accused Democrats of politicizing the talks.
“My advice to the president would be it seems like our friends on the other side are having some difficulty, kind of, turning off the campaign,” McConnell told reporters.
Oklahoma Representative Tom Cole said today in an interview that he’s advised fellow Republicans that they should accede to Obama’s demand that Congress extend the Bush- era tax cuts for couples with annual incomes of less than $250,000 and for individuals who make less than $200,000 every year.
“This is a question of political tactics, not political theology,” Cole said. “Raising taxes on anybody is bad for the economy, it’s bad for job creation.”
Boehner said he told Cole during a closed-door caucus meeting today that he “disagreed” with his assessment because raising taxes on the so-called top two percent would hurt small business owners who pay their taxes through their personal income tax filing every year.
Republicans aren’t backing down from their vow not to raise taxes, anti-tax advocate Grover Norquist said at a forum today sponsored by Politico.
Several Republican lawmakers who have said they’re open to tax increases if social programs also are cut have told Norquist their views haven’t changed, he said.
Each told him, “‘I said only under these circumstances that will never happen,’” said Norquist. As president of Americans for Tax Reform, Norquist has gotten many Republican lawmakers to sign a pledge not to increase taxes.
As their price for considering more taxes, Republicans are demanding structural changes to entitlement programs and an overhaul of the tax code in 2013. They say they are waiting for Obama and congressional Democrats to make an offer on spending cuts.
Deficit-reduction talks can include savings from Medicare, the federal health-care program for the elderly, without raising the eligibility age or turning it into a voucher program, Richard Durbin of Illinois, the Senate’s second-ranking Democrat, said yesterday in a speech at the Center for American Progress in Washington.
Reid and Durbin also said yesterday that an agreement to increase the debt ceiling should be included in any fiscal cliff agreement.
Reid said it would be “foolish” not to insist on a “package deal.”
The U.S. Treasury Department said Oct. 31 it expects to reach the debt limit near the end of this year and can take “extraordinary measures” to meet its payment obligations “until early in 2013.”
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