J. Scott Applewhite / AP
Speaker of the House John Boehner, R-Ohio, finishes a prepared statement to reporters about the elections and the unfinished business of Congress, at the Capitol in Washington, Wednesday, Nov. 7, 2012.
House Speaker John Boehner, R-Ohio, emerged in the aftermath of Tuesday’s presidential election to strike a conciliatory note, offering to work with President Barack Obama on a grand bargain to avert the impact of the coming fiscal cliff.
The top House Republican argued for new negotiations with Democrats and the newly re-elected Obama administration on an overarching fiscal deal linking together reforms to entitlements and the tax code.
Boehner said that Republicans would be “willing to accept new revenue, under the right conditions,” though those very conditions could be as beguiling as ever.
The speaker offered no clue as to whether Republicans would relent from their insistence (made during fiscal negotiations last year) that any sort of tax reform package not constitute anything even remotely resembling a tax hike.
Obama has spoken favorably about tax reform – including during his victory speech last night in Chicago – but in such a way that wealthier Americans would face the increased tax burden.
The so-called fiscal cliff, a combination of tax hikes and spending cuts, could act as a brake on the economy in 2013 and now eight senators from both parties are trying to find a solution. NBC's Andrea Mitchell reports.
Resolving that very open question could prove the key to resolving – or exacerbating – the fiscal impasse that has plagued Washington for the better part of the last two years.
“Shoring up entitlements and reforming the tax code – closing special interest loopholes and deductions, and moving to a fairer, simpler system – will bring jobs home and result in a stronger, healthier economy,” Boehner said during a Wednesday afternoon statement on Capitol Hill.
By the same token, the speaker suggested that a deal was untenable during the coming lame-duck Congress, calling for a “down payment” on fiscal reform that would give both parties ample space to negotiate in early 2013.
Boehner’s words reflected the immediacy of the challenge before lawmakers in the coming weeks if they are to successfully avoid the “fiscal cliff,” the nickname for the automatic tax hikes and spending cuts set to spring into place at the beginning of next year.
Economists have warned that this combination, the byproduct of legislative gridlock on issues of tax and spending during the last two years, would imperil the economic recovery in the U.S.
The election on Tuesday maintained Republican control of the House, Democratic control of the Senate and, Obama’s control of the White House – the same basic makeup of government that produced gridlock on fiscal issues for the past two years.
The White House said Wednesday that Obama, just hours after securing re-election, phoned leaders of both parties in the House and the Senate. During those call, the president “reiterated his commitment to finding bipartisan solutions to: reduce our deficit in a balanced way, cut taxes for middle class families and small businesses and create jobs.”
But as Boehner called for more time to address the looming fiscal crisis, Senate Majority Leader Harry Reid suggested he was disinclined to extend the timeline for reaching a deal.
“I’m not for kicking the can down the road. I think we’ve done that far too much,” he said at a press conference on Capitol Hill. “Waiting for a month, six weeks, six months – that’s not going to solve the problem. We know what needs to be done, so I think we should just roll up our sleeves and get it done.”
The dueling statements, though, set the parameters for fiscal talks that are set to dominate political discourse in the coming months.
The fight plays out amid election results that, as Vice President Joe Biden asserted on Wednesday, provided the administration with a “clear sort of mandate about people coming much closer to our view about how to deal with tax policy.”
Almost two-thirds of voters, according to national exit polls, said “no” when asked whether taxes should be raised to help cut the budget deficit. But 47 percent of voters, a plurality, said that taxes should increase only on those earning more than $250,000 – a centerpiece of Obama’s re-election campaign on which Obama stumped this fall.
Barring any action by Congress, tax rates would spring upward for all income brackets as the 2001 Bush-era tax cuts, which were extended for two years in 2009, expired.
The spending “sequester,” established by Congress during the 2011 debt ceiling deal as an incentive for lawmakers to reach a compromise budgetary solution, is also set to take effect at the beginning of next year absent an agreement by Congress. Republicans have grown especially worrisome about the sequester because of the heavy cuts it would make to the defense budget.
As the business of legislating resumes, a key actor in the process could be Wisconsin Rep. Paul Ryan, the former Republican vice presidential nominee who lost Tuesday as Mitt Romney’s running mate. Ryan simultaneously won re-election to Congress, and said Wednesday in a statement that he intends to resume his post as chairman of the House Budget Committee.