* Republicans refusing to budge on tax rates -White House
* Polls show public backs Obama in showdown with Republicans
* Boehner says tax hikes would hurt small business
By Richard Cowan and Jeff Mason
WASHINGTON, Dec 13 President Barack Obama and
House of Representatives Speaker John Boehner held a "frank"
face-to-face meeting on Thursday in an effort to break an
impasse in talks to avert the "fiscal cliff" of steep tax
increases and spending cuts.
With an end-of-year deadline looming, the two leaders talked
at the White House as frustration mounted over the recent lack
of progress in negotiations that had become bogged down in a
daily round of finger-pointing.
Aides on both sides used similar language to describe the
50-minute meeting, calling it "frank" and repeating that lines
of communication remained open.
The meeting, also attended by Treasury Secretary Timothy
Geithner, was announced after frustration broke out on both
sides at a lack of progress and U.S. stocks turned negative due
to fears the economy could dip into recession again if
politicians fail to break the gridlock in Washington.
At times raising his voice, Boehner criticized Obama earlier
in the day for putting jobs and the economic recovery at risk by
insisting on raising tax rates for the wealthiest 2 percent.
White House spokesman Jay Carney responded by reaffirming
Obama's commitment to raising the top rates and complaining
there had been no movement from Republicans on that crucial
"What we have not seen from the Republicans is any movement
at all on the fundamental issue," Carney told reporters.
"Republicans need to accept the fact that rates will go up on
the top 2 percent."
In an interview with a Minnesota CBS television affiliate,
Obama said he was hopeful of getting a deal and willing to make
more spending cuts as long as revenue from higher tax rates for
the rich was part of the deal.
"I'm willing to do a lot more cuts in spending. We also need
to pair it up with a little more revenue," he told WCCO
At a meeting earlier on Thursday, Obama's top economic
adviser, Gene Sperling, delivered a downbeat message to
Democratic senators about the status of the fiscal cliff talks.
A Democratic aide described the presentation as "bleak,"
saying Sperling told the group of senators that "we don't have
anywhere to go until Republicans move on (income tax) rates."
Republicans offered similar gloom. "Based on the White
House's current approach, it looks like we're in for a
protracted conflict until the snow melts," Illinois
Representative Peter Roskam said in an interview. "They (the
White House) are pushing us over the cliff," said Roskam, a
member of Boehner's leadership team.
Economists say failure to reach an agreement before Jan. 1
could push the country back into recession. The main hurdle is
the expiring tax cuts, which Obama wants extended for all but
the rich and Boehner wants extended for everyone.
But with positions seeming to harden, both sides also
emphasized their differences on Obama's request for permanent
authority to increase U.S. borrowing as part of a fiscal-cliff
agreement and on Republican calls for an increase in the
eligibility age for recipients of the Medicare healthcare
At a news conference, Boehner occasionally raised his voice
in criticism of Obama's bottom-line insistence on raising tax
rates on the rich.
"Raising tax rates will hurt small businesses at a time when
we're expecting small businesses to be the engine of job
creation in America," said Boehner, who used a chart to
illustrate his point that curbing spending increases was the key
to deficit reduction.
If Obama persisted on a path of higher spending and higher
taxes, he said, "this chart is going to look a lot worse."
Afterward, his spokesman said Boehner would return to his
home state of Ohio on Friday for the weekend, but was available
if there were more talks. "Ohio has both cell phone service and
airports," spokesman Michael Steel said. "It won't be a
A seven-day rally in world shares came to a halt and
commodity prices slipped on Thursday after negotiations over the
fiscal cliff appeared to stall.
Today there's a certain sense that both sides are still
apart," said Gordon Charlop, managing director at Rosenblatt
Securities in New York, describing trading as "tweaking" while
investors watch Washington's back-and-forth drama.
While Republicans fumed, Obama planned to continue his
public-relations offensive with a round of interviews with
anchors from local television stations. He was interviewed by
ABC's Barbara Walters two days ago.
A flurry of new polls showed strong support for Obama's
position. According to a Wall Street Journal/NBC survey,
three-quarters of Americans said they would accept raising taxes
on the wealthy to avoid the cliff. Even among Republicans, some
61 percent said they would accept tax increases on high earners.
'REALITY SHOULD SET IN'
A Pew Research Center poll showed Obama's approval rating
rising and 55 percent saying he was making a serious effort to
engage in the fiscal talks, while just 32 percent said
Republicans were serious about a deal.
Senate Democratic leader Harry Reid, citing the polls, said
Boehner "can't ignore the people forever" on the tax issue. "At
some point, reality should set in," he told reporters.
The polls have put Republicans in a difficult negotiating
position, and pressure has grown on Boehner in recent weeks from
the right and left. Some Republicans have expressed a
willingness to give in on higher tax rates in exchange for
deeper spending cuts, while conservatives have demanded that
Boehner stand firm.
"I'm not concerned about my job as speaker," Boehner, who
faces re-election to the leadership post in January, told
Boehner also dismissed any notion that Republicans would
agree to giving Obama more authority on the debt ceiling.
"Congress is never going to give up our ability to control
the purse," Boehner said. "The debt limit ought to be used to
bring fiscal sanity to Washington."
A group of 72 House Democrats urged Obama to reject
Republican calls to raise the Medicare eligibility age.
Senator Dick Durbin of Illinois, the second-ranking Democrat
in the Senate, told reporters he was told by the White House
that raising the eligibility age for qualifying for Medicare
benefits was not in the mix anymore.
He said that raising the eligibility age "creates some
serious issues for a lot of people who may be caught in the gap
between retirement and eligibility. Where are they going to get
health insurance? Many of them are sick people."