Obama to Hold Fiscal Summit With GOP

President Obama and top congressional leaders on Friday will convene their first "fiscal cliff" summit, seeking to avert an economically-toxic package of sweeping tax hikes and deep spending cuts that will take effect in 46 days without a bipartisan deal.

The meeting in the Roosevelt Room of the White House will be the first face-to-face encounter between Obama and Republican House Speaker John Boehner and Senate Minority Leader Mitch McConnell since the election last week. They will be joined by Vice President Joe Biden, House Minority Leader Nancy Pelosi and Senate Majority Leader Harry Reid.

Leaders on both sides must hammer out a plan to reduce the deficit by $1.2 trillion or more, identifying a mutually agreeable combination of spending cuts and potential revenue increases, through higher rates or eliminated loopholes and deductions. The plan must also address a series of expiring tax cuts or credits that touch nearly all Americans.

A deal must be reached by Dec. 31. But the parties remain particularly at odds over whether to extend Bush-era income tax cuts for all Americans or just those earning less than $200,000 a year, or $250,000 a year for families. Republicans insist tax rates should not rise for anyone, while Obama has vowed to hike rates on the top 2 percent of earners.

The stakes could not be higher: the Congressional Budget Office reported earlier this month that failure to reach a compromise -- triggering tax increases on all Americans and deep cuts to government spending on social programs and defense -- would send the U.S. economy back into recession and send unemployment skyrocketing.

Ahead of the summit, Obama has signaled that he will make a concerted push for Congress to immediately enact the one thing all sides agree on: extending Bush tax rates for families earning $250,000 or less, or 98 percent of Americans and 97 percent of small businesses.

Administration officials say the president's starting point for broader negotiations will be his call for $1.6 trillion in new revenue over the next 10 years as reflected in his budget proposal and a push for "balance" in any deficit reduction plan, meaning that it would include both spending cuts as well as new tax revenue.

"The president will not sign under any circumstances an extension of tax cuts for the top two percent of American earners," White House spokesman Jay Carney said Thursday.

Carney insisted Obama remains open to new ideas on how to raise additional revenue and close the budget gap, but added there is "no wiggle room when it comes to math. The math has to add up."

A senior aide to Boehner told ABC News the House Speaker would be focused on preserving his commitment to lower tax rates and spending cuts, though he has expressed openness to increasing overall tax revenue through reform of the tax code.

"This framework is consistent with the president's call for a 'balanced' approach," the Boehner aide said. "As a sign of our seriousness, Republicans have put revenue on the table, provided it comes from tax reform and is accompanied by spending cuts. President Obama must now follow suit by telling the American people what spending cuts he's willing to make."

It's unclear whether changes to entitlement programs -- the drivers of skyrocketing government spending and debt -- will be a focus of discussion at the first summit on fiscal negotiations. Post-election rhetoric from the parties has, to this point, generally focused only on taxes.

Source: http://www.news.theusalinks.com/2012/11/16/obama-to-hold-fiscal-summit-with-gop/