After meeting Obama, governors urge resolution of fiscal impasse

WASHINGTON Tue Dec 4, 2012 5:45pm EST

WASHINGTON (Reuters) - Democratic and Republican governors urged the White House and Congress on Tuesday to reach a deal to avoid year-end tax hikes and spending cuts, but they did not publicly recommend how the sides should bridge differences.

"We're not saying it should be this plan or that plan, I think what we all agree on is something's got to get done," Delaware Governor Jack Markell told reporters after meeting with President Barack Obama at the White House.

"And the idea that taxes on so many middle-class Americans could go up at the beginning of the year if something isn't done is something that could really negatively impact the economies in all of our states," added Markell, a Democrat, who is chair of the National Governors Association.

Obama and congressional Republicans are trying to work out a way to avoid automatic, across-the-board tax increases and government spending cuts that analysts say would drag the economy back into a recession. The president insists on letting tax cuts for top earners enacted under President George W. Bush expire as part of the deal.

Republicans have balked at tax rate increases. They have proposed increasing revenue through eliminating deductions and loopholes.

As part of his campaign to pressure Congress, Obama has met with a range of interest groups, and the governors are his latest guests at the White House. Markell was joined by two fellow Democrats and three Republicans at the White House on Tuesday.

Obama is due to speak to corporate leaders who are part of the Business Roundtable on Wednesday.

The governors told reporters after the meeting that the apparent stalemate between avoiding the fiscal cliff is casting a pall over business investment and hiring.

"What people are concerned about is the uncertainty that the current state of the debate represents in terms to businesses and individuals across the country," Markell said.

"The sooner that this gets resolved, and we believe the sooner that this gets resolved - that's not a three month fix, but that's a fix for some longer period of time - the better off we will be."

Many states are still dealing with budget shortfalls after a wrenching downturn, and the shock of going over the so-called fiscal cliff could be a painful setback, the governors said.

"This is a very serious time for our nation, a very serious time for our individual states, especially as we are recovering from the 2008 downturn," said Oklahoma Governor Mary Fallin, a Republican.

(Additional reporting by Jeff Mason, Matt Spetalnick, Steve Holland, and Lisa Lambert; Editing by Stacey Joyce)

A couple walks along the rough surf during sunset at Oahu's North Shore, December 26, 2013. REUTERS/Kevin Lamarque

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