WHITE HOUSE —
U.S. President Barack Obama says he is “modestly optimistic” that a deal can be reached to avert a fiscal crisis. The president spoke Friday after meeting with top lawmakers from both parties.
Obama expressed his frustration with the partisan bickering which has persisted almost to the deadline. But he said his one-hour meeting with congressional leaders at the White House was “good” and “constructive.”
As a result, he said the top Senate Democrat, Majority Leader Harry Reid, and the top Senate Republican, Minority Leader Mitch McConnell, will try to reach a deal on deficit reduction before Monday’s deadline.
“I am modestly optimistic that an agreement can be achieved. Nobody is going to get 100 percent of what they want, but let’s make sure that middle-class families and the American economy, and in fact, the world economy, are not adversely impacted because people cannot do their jobs,” he said.
If no deal is reached by Monday, all Americans will see their taxes go up, unemployment benefits will stop, and there will be deep cuts to government programs, including defense. If the Senate leaders cannot agree, the president said he will ask Reid to pass a bill to stop most of the adverse effects of the so-called “fiscal cliff.”
He said McConnell and the Republican Speaker of the House of Representatives, John Boehner, should not block the votes.
“I believe such a proposal could pass both houses with bipartisan majorities, as long as those leaders allow it to actually come to a vote. If members of the House or the Senate want to vote no, they can, but we should let everybody vote,” said Obama.
After meeting with the president, McConnell said he was “hopeful and optimistic” that a deal could be reached, and that lawmakers could vote on a proposal as early as Sunday, when the House and Senate are next in session.
Reid vowed to do everything he could to prevent the tax increases and spending cuts that he said threaten the nation’s economy. The top Senate Democrat said he is preparing a bill for a vote Monday, which would raise taxes on Americans making more than $250,000 a year - Obama’s original proposal.
The president had raised the figure to $400,000, while Republicans wanted a $1 million threshold.
Chris Krueger, a policy analyst with Guggenheim Securities, said most Americans share the president’s frustration with Washington’s inability to agree on a solution.
“You talk to most folks on the street, and no one could possibly imagine that the Congress would be so irresponsible and so childish as to basically take their toys home and not solve what is arguably a self-inflicted wound to the economy,” he said.
Krueger said Americans could see a repeat of the “fiscal cliff” drama in the coming months, when Washington is forced to reach an agreement on raising the government’s debt limit.
“That is a much more, quite frankly, frightening cliff. And that is where we believe remains the true forcing mechanism where Congress will, ultimately, get a deal, but it may well wait until late February, early March, around that second fiscal cliff,” said Krueger.
The United States faces the fiscal cliff because tax cuts implemented by former president George W. Bush expire at the end of the year.
The automatic spending cuts and tax increases were put in place in 2011, as an incentive to both parties to cut the deficit, after they were unable to agree on a larger deficit reduction plan at that time.