* Geithner meeting, Obama phone call bring sides no closer
* No sign of a quick resolution on fiscal cliff
* Renewed debt ceiling fight could complicate fight
By Richard Cowan and David Lawder
WASHINGTON, Nov 29 House of Representatives
Speaker John Boehner said on Thursday that "fiscal cliff" talks
with the White House had made no substantive progress and
criticized President Barack Obama and Democrats for failing to
get serious about including spending cuts in a final deal.
Boehner said he was "disappointed" after a phone call with
Obama on Wednesday night and a meeting with Treasury Secretary
Timothy Geithner on Thursday moved the two sides no closer to an
agreement to avert the tax hikes and spending cuts that will be
triggered at the start of 2013 unless Congress intervenes.
"I'm disappointed in where we are and disappointed in what's
happened over the last couple of weeks," Boehner, of Ohio, told
reporters after a private session with Geithner at the Capitol.
"No substantive progress has been made in the talks between
the White House and the House over the last two weeks," he said.
"There's been no serious discussion of spending cuts so far, and
unless there is, there's a real danger of going off the fiscal
Markets dipped briefly into negative territory on Boehner's
comments, continuing a pattern of gyration based on the latest
utterance or headline about the outlook for an agreement to
avert the fiscal cliff.
The tone was in sharp contrast to the one expressed on Nov.
16, the last time Obama met with congressional leaders. Boehner
then stood next to Democratic leaders and voiced optimism they
could find common ground in fiscal cliff negotiations.
Complicating the debate on Thursday was a renewed fight over
raising the U.S. debt ceiling. That explosive issue, which could
have been handled separately in the spring, was thrust into the
fiscal cliff fray on Thursday in an exchange between Republicans
Boehner said any debt limit increase needed to be matched or
exceeded by spending cuts to be proposed by Obama as part of the
' DEEPLY IRRESPONSIBLE '
White House s pokesman Jay Carney responded by demanding that
Congress go ahead and raise the debt ceiling as part of any
year-end deal to av oid the cliff. T o do otherwise, he said,
would be "deeply irresponsible."
The last partisan fight over the nation's borrowing limit in
2011 was settled by a law that led directly to the fiscal cliff
and to a downgrade of the government's credit rating.
Geithner, Obama's top negotiator in the talks, met with
congressional leaders from both parties at the Capitol as the
end-of-year deadline approaches to avoid the onset of $600
billion in tax hikes and spending cuts that analysts warn could
push the U.S. economy back into recession.
The immediate issue is whether the tax cuts that originated
in the administration of former President George W. Bush should
be extended beyond Dec. 31 for all taxpayers including the
wealthy, as Republicans want, or just for taxpayers with income
under $250,000, as Obama and his fellow Democrats want.
Republicans have said they are willing to consider new ways
to raise revenue as long as Democrats and Obama agree to
accompany it with significant spending cuts, particularly to
entitlement programs like the government-sponsored Medicare and
Medicaid healthcare plans.
"Without spending cuts and entitlement reform, it's going to
be impossible to address our country's debt crisis. Right now,
all eyes are on the White House," Boehner said.
Boehner said Geithner and the administration had not offered
any new plans during the meeting to break the impasse, while
Senate Democratic leader Harry Reid said Democrats were still
waiting for a "reasonable" proposal from Republicans.
Carney said the president had put forward "very specific
spending cuts," including some in the entitlement healthcare
programs, but had not seen any movement from Republicans.
CRACKS IN REPUBLICAN RANKS
Despite a few cracks in Republican ranks, most notably from
Republican Representative Tom Cole of Oklahoma, neither side has
budged significantly in recent weeks from its position, leaving
the markets and political analysts alike to grasp at wording
"I think unfortunately it seems pretty clear that the market
is trading very much off the reading of the tea leaves on how
these fiscal cliff negotiations are going," said Eric Kuby,
chief investment officer at North Star Investment Management
Corp in Chicago.
In the absence of progress, or any realistic understanding
as to when or if Republicans and Democrats might avert the cliff
or come up with some deficit reduction agreement, prodding has
started to come on a regular basis from business leaders as well
as Federal Reserve officials.
New York Fed President William Dudley and Richard Fisher of
the Dallas Fed, highlighted the problems that U.S. lawmakers
were causing for both hiring and the economy with each day they
fail to strike a deal to avoid a pending fiscal crisis.
Dudley said on Thursday that if it is not addressed, the
economic contraction is likely to be larger than normal because
interest rates are so low.
The post-election lame-duck session of Congress also has
made clear that until the two sides get over the immediate tax
issue, they will not be able to move forward on the serious
discussions they desire on longer-term deficit reduction and tax
Keeping the nation in suspense down to a white-knuckled
deadline has become the rule rather than the exception for
Congress in recent years.
Whether the risk has been a government shutdown or, as in
the events that led to the fiscal cliff, default for failure to
raise the U.S. government's borrowing power, Republicans and
Democrats have needed the pressure of time and possible disaster
to bring them together.