With campaign over, Obama gets down to business

Before negotiations are set to begin, President Obama will be working to enlist support from key constituencies to back his views on solving the fiscal crisis. Nancy Cordes reports.

Updated 8:30 a.m.

One downside to winning a presidential election: You don't get very long to enjoy your victory.

On the heels of reelection last week, the president is now reckoning with the looming "fiscal cliff," figuring out who will replace top officials in his second term, and returning to the international stage - among other duties. Here's the state of play facing the already-busy president:

The fiscal cliff

Other than the shocking fall of CIA director David Petraeus - more on that later - this is the story that is consuming Washington.

First, a quick reminder: The "fiscal cliff" is the combination of tax hikes and spending cuts set to start kicking in at the end of the year, if Congress and the president don't come to a deal. The tax hikes, to the tune of about $500 billion in 2013, would result from the expiration of the Bush-era income tax cuts and the end of the payroll tax holiday that began in 2011, among many other factors. The spending cuts result from a law that Congress passed and the president signed in response to Republican refusal to raise the debt limit without concessions: The law mandates $1.2 trillion in deficit reduction over a decade through indiscriminate cuts to most defense and non-defense domestic programs, including about $110 billion in cuts in 2013. Going off the cliff would affect nearly 90 percent of taxpayers, and many economists as well as the Congressional Budget Office say doing so would tip the economy into recession. 

Congress returns to Washington Tuesday, and working out a deal to avoid the cliff is at the top of the agenda. Meanwhile, outside groups are ratcheting up pressure to shape a possible deal in the best possible terms. On Tuesday, Mr. Obama meets with labor leaders and progressive groups who will push the president not to make the major concessions on entitlement programs sought by Republicans. On Wednesday, Mr. Obama will meet with representatives from the business community, many of whom backed Mitt Romney in the election and who generally want the president to minimize tax hikes. (Some in this group are rallying around the $4 trillion Bowles-Simpson proposal that would, among other things, make significant changes to Social Security.) On Friday, the president is set to hold his first meeting with lawmakers from both parties to discuss a path forward.

The most obvious fault line between the two sides comes on raising taxes on the wealthiest Americans. The president campaigned on raising tax rates on those making more than $250,000 per year, and he argues that his reelection shows the American people support that position. (National exit polling from Tuesday found that 60 percent of voters support raising taxes on this group.) In his carefully-constructed remarks on the issue last week, House Speaker John Boehner took a conciliatory tone but stood by his opposition to raising taxeson the highest earners, arguing that it would hurt small business owners and hamper economic growth. Boehner said he is open to revenue increases but that they should come from reforms to the tax code such as closing loopholes - the same position he held before the election.

There are signs, however, that Republicans may not take the hard line on taxes that they adopted in Mr. Obama's first term. The New York Times reported over the weekend that Boehner told House Republicans on a conference call that they must face political reality: The newspaper reported that Boehner told his caucus (in the Times' words) that Republicans "would continue to staunchly oppose tax rate increases as Congress grapples with the impending fiscal battle, [but] they had to avoid the nasty showdowns that marked so much of the last two years." Meanwhile, Senate Republican Leader Mitch McConnell told the Wall Street Journal that while Republicans have a "voter mandate not to raise taxes," he would be open to accepting tax increases equal to reductions in entitlement spending. And Weekly Standard editor William Kristol, a leading voice of establishment conservatism, said Sunday that "It won't kill the country if we raise taxes a little bit on millionaires." 

Right now, both sides are trying to cast themselves as the reasonable party ahead of the negotiations, since they don't want to be blamed if the nation does go over the cliff. Mr. Obama last year met largely behind closed doors in a failed attempt to reach a deal; this time around he's more aggressively taking his case to the public, and reportedly plans to "travel beyond the Beltway" to rally support for his position. He will also hold a news conference Wednesday in which he will take questions from reporters - his first such event since June. On Friday, he said that while he is "open to new ideas," he will reject any approachthat does not involve a tax increase on the highest earners.