'Fiscal cliff' talks down to Obama and Speaker Boehner

WASHINGTON Fri Dec 7, 2012 9:13pm IST

U.S. President Barack Obama hosts a bipartisan meeting with Congressional leaders in the Roosevelt Room of White House to discuss the economy, November 16, 2012. REUTERS/Larry Downing/Files

U.S. President Barack Obama hosts a bipartisan meeting with Congressional leaders in the Roosevelt Room of White House to discuss the economy, November 16, 2012.

Credit: Reuters/Larry Downing/Files

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WASHINGTON (Reuters) - With about three weeks left before the "fiscal cliff" deadline, the task of avoiding the steep tax hikes and spending cuts was down to talks between Republican House Speaker John Boehner and President Barack Obama, according to Capitol Hill aides.

Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi are "being kept in the loop," said an aide close to both Democratic leaders, ready to work out any details.

"The White House and Boehner have the most to work out, so they do the most talking," the aide said on Friday.

Boehner scheduled a news conference for 11 a.m. EST/1500 GMT to discuss the "fiscal cliff" talks. "There's been no progress," a senior House Republican aide said.

After the Department of Labor reported the unemployment rate dropped to 7.7 percent in November as employment grew faster than expected, Boehner blamed Obama and Democrats for the prolonged uncertainty of the talks and said it was hurting the economy.

"The Democrats' plan to slow-walk our economy to the edge of the 'fiscal cliff' instead of engaging in serious talks is a threat to our economy," Boehner said in a statement.

Fundamental differences remain between the two sides. The president is demanding that tax cuts set to expire on December 31 be extended for middle-class taxpayers, but not for the more affluent.

If and when agreement is reached on that question, the two sides will try figure out a way to deal with the spending cuts, perhaps postponing or trimming them. They will also work toward a longer-term deficit-reduction package to be taken up after the newly elected Congress is sworn in next month.

"It's going to require both leaders," Obama senior adviser David Axelrod told MSNBC. "Each is going to have to make sacrifices in order to get this done. I think everybody recognizes the consequences of not getting it done."

"In order to solve the problem and achieve the $4 trillion in savings, you're going to have to do a balanced package, including all of these things," he said, in answer to a question about the balance between tax hikes and entitlement reforms.

It's no surprise that Boehner and Obama are the central players in the final weeks. That has been the pattern in previous showdowns over fiscal issues between the two parties.

Boehner will have a challenge selling whatever agreement he might reach to conservative Tea Party sympathizers in the House, some of whom are openly critical of the concessions the speaker has already made, particularly his openness to revenue increases of any kind.

But with polling showing that Americans will blame Republicans if the country goes off the "cliff," more House Republicans have been urging Boehner to get an agreement quickly even if it means tax hikes for the wealthy. (Additional reporting by Susan Heavey. Editing by Christopher Wilson)

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