Obama on tricky path in fiscal cliff negotiations

President Barack Obama is kicking off budget dealings with congressional leaders with new leverage from last week's big win, but he confronts a decidedly tricky path to avoiding a market-rattling "fiscal cliff" that could imperil a still-fragile economy.

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GOP reacts to Obama's plan for fiscal cliff

Obama's GOP rivals promise greater flexibility on new tax revenues, but Democrats face pressure from liberal interest groups urging the president to take a hard line and avoid cutting big benefit programs like Medicare and food stamps. It's up to Obama to navigate the course toward an agreement.

At issue is a one-two punch of expiring Bush-era tax reductions and across-the-board spending cuts set to hit in January as punishment for the failure of a gridlocked Congress to reach a deficit-cutting deal last year. Economists and business leaders warn the combination could send the economy back into recession, and all sides in Washington say they want to avoid going over the cliff.

Attending the meeting with Obama are the top four leaders of Congress: House Speaker John Boehner, R-Ohio, Minority Leader Nancy Pelosi, D-Calif., Senate Majority Leader Harry Reid, D-Nev., and Minority Leader Mitch McConnell, R-Ky.

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The White House says Obama's starting point for negotiations is his February budget plan, which combined $1.6 trillion in new revenues over the coming decade - chiefly from upper-income earners - with modest cuts to benefits programs. Obama's plan promises $4.4 trillion in deficit cuts over 10 years, but more than half of that comes by banking already accomplished cuts and questionable savings from winding down military operations in Iraq and Afghanistan.

In the run-up to the meeting, Obama has been firm that taxes are going up on upper-bracket earners, though Boehner and McConnell are adamant that his campaign promise of raising the top income tax rate on family income exceeding $250,000 a year is a nonstarter.

"When it comes to the top 2 percent, what I'm not going to do is to extend further a tax cut for folks who don't need it," Obama said at his news conference Wednesday.

Obama will press the leaders to make sure that taxes don't go up on 98 percent of American families and 97 percent of small businesses at the end of the year. The White House says Obama is willing to compromise on a deficit-reduction plan, but only if it asks for more revenues from wealthier Americans.

The bargaining landscape has shifted markedly in Obama's favor since his failed talks with Boehner in the summer of 2011 on a "grand bargain" on the budget. Then, Obama squared off against a tea party-driven House on the need to extend the government's ability to borrow to avoid a market-crunching first-ever default on its obligations.

Now, freshly re-elected, Obama is putting Republicans on notice that he's willing to mount a national campaign blaming them for holding up renewing tax cuts for all with an ultimatum about renewing tax cuts for upper-income earners.

"If you have looked closely at what the president had to say and looked closely at what I have had to say, you know, there are no barriers here to sitting down and beginning to work through this process," Boehner said Wednesday.

McConnell, however, has adopted a harsher tone.

The roadblocks to a deal may come from Obama's left flank as much as they do from his conservative GOP rivals. Liberal Democrats are adamant that the measure not touch Social Security or raise the eligibility age for Medicare. Both ideas were in the mix when Obama negotiated with Boehner last summer, but top Senate Democrat Reid insists that ideas like a lower inflation adjustment for Social Security are off the table now.

This afternoon, Obama will continue his efforts to build a coalition of support for his position when he and Vice President Joe Biden meet with leaders of civil rights and other organizations. The president has already met with leaders of labor and liberal organizations as well as corporate CEOs who have backed his call for greater tax revenue.

[sinkingmiddle]

I say, go off the cliff. I'm not worried. Who cares...we already have 47 Million people on food stamps. Lets go for 147 Million people on food stamps. Then the democrats can elect super majorities in congress in 2014. No one will want to give up the free stuff, and then they can vote to cure global warming by doubling the price of Gasoline and enact cap and trade. Shoot, they can have 100 Million people on Medicaid disability by 2016. By then the democrats can win all 50 states, since their majorities will be all on welfare and food stamps.
Oh yes, and they can pass an immigration bill to make all mexicans and asians american citizens, as long as they vote for democrats.

It'll be great, we'll look like the Soviet Union by 2016... What a bright future...

[bobw101]

How does one grow the middle class out?

[rightontarget]

I would so VOLUNTARILY jump right off that fiscal cliff right now rather than give in to the fiscal BLACKAMAIL and FEAR MONGERING of the Republican elitists. We need to grow from the MIDDLE CLASS OUT and reject the trickle down propaganda that has never worked before but that they insist we believe. It's GARBAGE!!! They WANT us to BELIEVE we owe our very survival to those wealthy, so-called "job creators". That is BULL!!!!!! Just look into the eyes of the brainwashed by the GOP. Ever see that Vonage commercial on TV where the obnoxious neighbors come over to "visit" and bring their "bundle" of phone services. Yeah, right! "We ALLLLLL bundle......" (Scary thought to become a "stepford citizens"....that's what the GOP wants us to be.)

[rugbyrocks]

Me too. Let's jump. Taxes go up for everybody, unemployment ends for a lot of people, entitlements get abruptly cut, our credit rating is downgraded, the markets fall due to uncertainty, unemployment jumps, we fall into a recession and then perhaps negotiations can really begin. We can start with complete tax reform that includes fairness for all, reduction of entitlements and spending, immigration that doesn't include amnesty because we can't afford the influx of 11-13 million people into our country, a way to create jobs in the economy not stifle business owners. It may take a decade to fix our economy albeit in an abrupt and painful fashion. Let's get it done!

[bobw101]

rightontarget says:
I would so VOLUNTARILY jump right off that fiscal cliff right now rather than give in to the fiscal BLACKAMAIL and FEAR MONGERING of the Republican elitists. We need to grow from the MIDDLE CLASS OUT and reject the trickle down propaganda that has never worked before but that they insist we believe. It's GARBAGE!!! They WANT us to BELIEVE we owe our very survival to those wealthy, so-called "job creators". That is BULL!!!!!! Just look into the eyes of the brainwashed by the GOP. Ever see that Vonage commercial on TV where the obnoxious neighbors come over to "visit" and bring their "bundle" of phone services. Yeah, right! "We ALLLLLL bundle......" (Scary thought to become a "stepford citizens"....that's what the GOP wants us to be.)

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How does one grow the middle class out?

[CBSDebbie]

Let the Bush Tax Cuts expire. They are not new taxes but a resumption of tax rates. They never promoted their purpose which was to make job creators. Didn't happen and just increases debt. Set and lower corporate rates. Close all loopholes. Cut defense by 2%.

[bobw101]

Cut defense by 2%, you are kidding right? I would say it should be cut by at least 50%.

[arthanyel]

BOBW101: A 50% cut in defense is simply not feasible if the US is to remain a superpower, not to mention the tremendous economic damage that would result from it.

That said, a more modest cut (10% to 15%) is certainly doable without risking either our military position or making a drastic impact on the economy, and we should have that in the mix. Anyone that says ANYTHING is off the table in righting our fiscal ship is simply wrong.

[DJ_32_1205]

RepubliCon_Liar_RobMe replies:
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Hey "Doofus" (RDTHIS)...LOL!...we're not talking about $100 here that has to get paid down, it's "trillions" that all started when Ronald Reagan (the ignorant Republi-minion hero) fooled brainless fools like you that he was a "fiscal conservative"....when all he was really doing was "borrowing more, and not spending less".

You ignorant Republi-minions are clueless....LOL!
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So tell me, since you're so smart. How much has Obama added to the debt.

As for Brainless, it looks like you have some issues with brains as well. Remember what the National Debt was when Obama came in to office in 2008? What is it today

[arthanyel]

How much as OBAMA added to the debt? About $1T in total.

[bobw101]

arthanyel replies:

How much as OBAMA added to the debt? About $1T in total.

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The debt was 10.6 trillion on January 20, 2009 (the day Obama was inaugurated), In September, 2012 the debt had risen to over 16 trillion. This does not include unfunded mandates which puts our debt in the 50-200 trillion range according to some folks.

[JimmyJackStar]

Some people are crazy, there is already a petition to allow the fiscal cliff to go into effect.

http://wh.gov/X9Ob

[bobw101]

The amount the feds are spending on health care is exploding at about 10% per year (850 billion in 2011), at that rate in 20 years they will be spend over 5 trillion a year on health care. This must be addressed all the rest is simply window dressing.

[grandfatherdizzy]

I would not say anything until Obama presents his plan. He has no plan. He had no budget for 4 years. Now that he has a mandate ( In lala land.) let him negotiate his proposals. He wants ideas from GOP because he has none. Executives who are unqualified use this ploy every day. Let the messiah lead. In my opinion; that economic stuff is way over his socialist brain. Greeks and Spaniards believe in the same government magic dust. Most hard workers have prepared for this years ago. Let's go over the cliff. I'm ready.

[grandfatherdizzy]

Republicon_lair_obamaemployee, this is your job is it not? Are you one of those mysterious Maine voters shipped in. Read a little history young man. Study the great falls of nations. Thier are people like yourself who want to sacrifice themselves for the cause. What is in it for you? The low level manipulation that is being employed is sickening. Lets keep poor folks believeing they need help from the government. What everybody needs is a job. Even in a communist system, everybody is promised a job. What we have know is people living off the workers who pay taxes. Addressing your response. Budgets are proposed everyday. Does not mean they are enacted. For example: Your budget is as follows: Welfare check: $800.00, Foodstamps: $250.00, Section 8A housing: $1,000.00. After the government goes bust with debt your going to be in a pretty bad place. Best of luck.

[uavman002]

Go off the cliff!

[uavman002]

Go off the cliff!