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"Fiscal cliff" talks frozen, Obama lobbies big business

Updated: 5:30 p.m. ET

With talks between the White House and Congress over a deal to avert the so-called "fiscal cliff" all but frozen, President Obama today turned his focus to the business community, urging attendees at the quarterly meeting of the Business Roundtable to help him lobby Congress for a "balanced" deal that includes tax hikes for the nation's wealthiest earners.

So far, there's little reason to believe a deal is in the works: In recent days, the White House and House Speaker John Boehner each offered up plans reflective of their party's ideologies, both of which were swiftly rejected by the other side. An aide to Boehner confirmed to CBS News that the president and the speaker talked on the phone this afternoon, though the aide did not provide any details as to what was said on the call.

Mr. Obama, who has recently redoubled his efforts to rebuild a strong relationship with the business world after years of tension, remains locked in a stalemate with House Republican leaders over averting the so-called "cliff," a series of tax hikes and spending cuts set to go into effect next year. The president insists he will not sign off on a proposal that does not increase tax rates for households earning $250,000 or more per year, while Republicans have repeatedly reiterated their refusal to raise tax rates.


In his remarks today, Mr. Obama attempted to win the Business Roundtable to his side of the political argument, outlining his opposition to the GOP proposal and essentially accusing Republicans of holding the global economy hostage.

"I am passionately rooting for your success, because if the companies in this room are doing well, then small businesses and medium-sized businesses up and down the chain are doing well," he said. "Obviously the global economy is still soft. Europe is going to be in the doldrums for quite some time... Everybody's looking to America because they understand that if we're able to put forward a long-term agenda for growth and prosperity that's broad based here in the U.S., that confidence will increase not just here in the U.S. but will increase globally."

But, he argued, "what's holding us back [from that goal] right now, ironically, is a lot of stuff that is going on in this town. And I know that many of you have come down here to try to see, is there a way that we can break through that logjam."

"Nobody wants to get this done more than me," he said.

The president went on to outline his objections to the GOP plan, which proposes to raise revenue by eliminating unspecified tax loopholes and deductions.

"We don't have any objection to tax reform, tax simplification, closing loopholes, closing deductions. But there is a bottom line amount of revenue that is required in order for us to get a real, meaningful deficit reduction plan that hits the numbers that are required," he said. "Any formula that says we can't increase tax rates probably only yields about $300-400 billion realistically, and that's well short of the amount of revenue that's needed for a balanced package."

Mr. Obama's most recent proposal to stave off the "fiscal cliff" calls for $1.6 trillion in new revenues, achieved in part by letting the Bush-era tax cuts expire for the wealthiest Americans, as well as $600 billion in spending cuts and a handful of other measures. The Republican offer put forward a counter offer that is made up of $900 billion in spending cuts and $800 billion in new revenues achieved through tax reform that preclude rate increases.

"Speaker Boehner took a position I think the day after the campaign that said, we're willing to bring in new revenue but we're not willing to increase rates. And I've just explained to you why we don't think that works," Mr. Obama said. "We're not insisting on rates just out of spite or out of any kind of partisan bickering, but rather because we need to raise a certain amount of revenue."

The president also warned Republicans against embracing a plan to use a February battle over the debt limit to get their way on tax rates. "That's not a game that I will play," he said.


Even as Democrats ramp up pressure on Boehner to accept a deal including tax hikes, however, the speaker has so far shown few outward indications that he's willing to defy the conservative wing of his caucus, particularly amid conservative criticisms of the plan he did offer up.

Boehner reiterated his call today for the president to officially respond to his proposal, and dismissed the notion that Mr. Obama's re-election serves as a mandate on raising tax rates.

"If the president doesn't like our offer, he has a responsibility to put forward a plan that can pass both chambers of Congress. We're ready to talk with the president immediately about a plan that can pass this chamber. We're ready any time he is," he said. "We can't... negotiate with ourselves."

The Ohio Republican defended his plan to increase revenue by closing tax loopholes and deductions, which Democrats have targeted as, among other things, a way to get around raising rates for the wealthy.

"The revenues we are putting on the table are going to come from, guess who? The rich," said Boehner. "There are ways to limit reductions, close loopholes and have the same people pay more of their money to the federal government without raising taxes, which we believe will harm the economy."

Boehner did not, however, provide further details on which loopholes and deductions would be closed, nor did he say how such closures would add up to the amount of revenue increases for which the president is calling.

In the meantime, House Democrats continue to push Republicans to agree to decouple the middle-income Bush-era tax cuts from the high-income cuts so that low rates for all Americans aren't held "hostage" in the fight over rates for the top two percent of earners.

"A good first step would be to pass the middle income tax cut," House Minority Leader Nancy Pelosi told reporters today. "If we can take the middle income tax cuts off the table, then we have ended the hostage-taking that Republicans have been engaged in."

But House Majority Leader Eric Cantor, R-Va., answered Pelosi's cry with a firm reiteration of the party line.

"An obsession to raising taxes isn't going to solve the problem," he told reporters today. "We can't just keep borrowing money and raising taxes and expecting the problem to go away. That is our point to the president."