Analysis: Both sides talk compromise on fiscal cliff, without significant new concessions yet

David Espo, The Associated Press

WASHINGTON - When President Barack Obama greets congressional leaders at the White House on Friday, an elaborate set of postelection rituals will be complete. Yet divided government's ability to attack the nation's economic woes is no clearer now than it has been for months.

Eventually, something's got to give in a country where voters are weary of gridlock and wearier still of high unemployment.

Or does it?

"I'm open to compromise and I'm open to new ideas," Obama said at his White House news conference on Wednesday. He stressed the importance of avoiding the "fiscal cliff," a double whammy of tax increases and spending cuts at the turn of the year.

Up to a point.

He referred more than once to his defeat of Republican Mitt Romney, saying, "I argued for a balanced, responsible approach, and part of that included making sure that the wealthiest Americans pay a little bit more."

"By the way, more voters agreed with me on this issue than voted for me," he added, a reminder to Republicans that some of their supporters, too, disagree with the party's position.

House Speaker John Boehner, R-Ohio, also regularly stresses a willingness to reach across the aisle, citing the emergence of a "spirit of co-operation" since the election that he says bodes well for an agreement.

Like Obama, he avoids definitive answers to hypothetical questions. "I don't want to box myself in. I don't want to box anyone else in," he said recently.

Yet also like the president, Boehner has laid down a marker for the talks ahead. "Raising tax rates is unacceptable," he said referring to Obama's campaign-long call to allow rates to rise on incomes over $200,000 for individuals and $250,000 for couples.

Both sides take credit for concessions, none of them particularly new.

In talks that came close to a deal in 2011, Obama said he was willing to make significant cuts in the growth of benefit programs like Medicare and Medicaid, infuriating liberals. Boehner spoke of as much as $800 billion in new revenue, angering conservatives.

The talks eventually collapsed.

Now White House Press Secretary Jay Carney says Obama will ask for $1.6 trillion in new taxes over a decade when the talks resume after Friday morning's meeting at the White House.

It's an opening bid, not a demand, part of the standard ritual for such occasions as is the rhetoric from both sides.

Barring legislation, taxes will rise on nearly everyone on Jan. 1, and a series of across-the-board spending cuts will take effect, a combination known as the "fiscal cliff" that many economists say could send the economy back into recession.

That sounds ominous, and if nothing else, neither party wants to bear the responsibility if it happens.

Yet government, particularly divided government, has a curious relationship with deadlines.

On the one hand, they focus compromise efforts, and can result in an agreement.

Yet just as often, they lead to interim half-measures that set a new deadline for the final day of reckoning.

The fiscal cliff itself is an example.

Republicans used the threat of an unprecedented federal default to win about $1 trillion in spending cuts over 10 years from Obama and Democrats in 2011. The same agreement set up a deficit "super committee" to seek more and bigger deficit savings. That effort ignominiously failed a year ago, leaving in place a series of automatic across-the-board spending cuts timed to coincide with the scheduled expiration of tax cuts at the turn of the year.

As always in the run-up to negotiations, the two sides vie for leverage.

Hence, Boehner is fond of pointing out that while the president may have a mandate, so, too, the House Republicans, who renewed their majority in last week's elections.

Senate Republican Leader Mitch McConnell of Kentucky is more pointed. "Most people may focus on the White House, but the fact is the government is organized no differently today than it was after the Republican wave of 2010," he said earlier in the week.

Not exactly.

In other areas, numerous Republicans have made it clear they are ready to talk compromise — from a position of electoral weakness.

Despite the claim of a dual mandate, Boehner has signalled the end of efforts to repeal Obama's health care legislation, a cause that animated the tea party and united Republicans who swept to power in the House two years ago.

Numerous Republicans in Congress and among the nation's governors say the party must appeal more effectively to Hispanic voters, who account for an ever-increasing share of the electorate and gave Obama more than 70 per cent of their votes this fall. Already there are the first stirrings of compromise talks on an overhaul of immigration law, to include a pathway to legal status if not citizenship for millions who are in the country illegally.

The "tone and rhetoric" employed by Republicans in recent debates over immigration have "built a wall between the Republican Party and Hispanic community," Sen. Lindsey Graham, R-S.C. conceded a few days after the election.

So much for Romney's statement in last winter's primaries that illegal immigrants can self-deport.

Immigration legislation will wait until 2013 at least.

By then, Obama and Congress will show whether the election produced a government more inclined to compromise, or to more gridlock.


EDITOR'S NOTE — David Espo covers politics and Congress for The Associated Press

An AP News Analysis