Fiscal Cliff Talks: Progress Quietly Begins As Both Sides Make Opening Bids

Buried in the stories and slightly visible behind the public posturing, signs are emerging that a deal considering ‘fiscal cliff’ is possible.

House Republican leaders on Monday presented a plan which was immediately rejected by the White House. Photo: The White House

The plan provided to the White House included steep changes to Medicare, extensions of all the Bush tax cuts and large cuts to mandatory and discretionary spending. However, the offer was turned down as a stale GOP wish list that would hurt the middle class.

In private both sides seemed to be more optimistic. The Republican plan also presupposes negotiators with a framework to match the one provided by Obama’s administration last week.

And while the two presentations are absolutely different, negotiators can now begin trading bits and pieces in hopes of finding a resolution before the end of the year, The Huffington Post reports.

A top administration official said that Monday talks represented a “measure of progress.” He added that the re-elected U.S. president has significant leverage to move the House GOP off of its proposal.

A top House Republican also admitted “definitely” progress that the White House and GOP leaders have now put forward opening bids, saying the administration still has retreat from its “absurd and ridiculous” starting point.

“Everybody in Washington knows there’s certain choreographed steps that you have to go through when you have to get a deal, and part of that is the public admonitions of the other side,” said the GOP aide. “But we don’t want to take us off the cliff. We do want a deal.”

Analysts predict the talks will lead to significant progress by the end of this week to ensure that a deal can be signed into law before the end of the year.

“The American people expect their leaders to find fair middle ground to address the nation’s most pressing challenges,” House of Representatives Speaker John Boehner of Ohio and several other top House Republicans wrote in a letter to Obama.

Monday’s plan offered by Republicans marks the first time the party has floated a budget plan that differs from the anti-tax stance that has defined the party for decades.

However, Republicans revealed that they would stand for not raising tax rates on wealthy Americans, which is a central element of Obama’s proposal.

“Until the Republicans in Congress are willing to get serious about asking the wealthiest to pay slightly higher tax rates, we won’t be able to achieve a significant, balanced approach to reduce our deficit,” White House communications director Dan Pfeiffer said in a prepared statement.

“To protect the middle class while reducing the deficit, simple math dictates that tax rates must rise on the top 2 percent of taxpayers next year,” Senate Majority Leader Harry Reid said in a statement.

He went on, adding: “The sooner Republicans grasp that reality, the sooner we can avoid the fiscal cliff.”

As Reuters reports, several defense contractors announced that their business has already been hurt by concerns about the spending cuts that will take effect in January absent a deal.

“We are talking a good game, but are still unwilling to park short-term self-interest,” said David Langstaff, chief executive of engineering firm TASC Inc.

“Every trade group, special interest and corporate lobbyist is up on Capitol Hill clamoring that Congress solve the problem … but don’t touch my budgets! We can’t have it both ways.”

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