July 26, 2014 SIGN IN | REGISTER

Pivoting to the Fiscal Cliff

Chris Maddaloni/CQ Roll Call

A day after voters endorsed the political status quo in Washington, House and Senate leaders offered conflicting strategies for dealing with the tax and spending issues that have the nation on the brink of a “fiscal cliff.”

While Congressional leaders promised to work with one another to head off tax increases and spending cuts scheduled to begin Jan. 1, prospects for cooperation were dimmed when Speaker John Boehner (R-Ohio) and Senate Majority Leader Harry Reid (D-Nev.) pointed in different directions.

In addition to a fundamental disagreement on taxes, the leaders sent conflicting signals on how much can be accomplished during the post-election session.

Boehner sought to put the ball in President Barack Obama’s court today, offering to accept increased revenue as part of a deficit-reduction deal if the new money does not  come from increased tax rates and if the growth in the cost of entitlement programs is addressed.

Republicans have said additional revenue can be obtained through an overhaul of the tax code and can come from wealthier taxpayers without raising tax rates, perhaps by limiting the use of some tax credits and deductions.

Boehner rejected any notion that the newly re-elected president and Reid — whose party increased its advantage in the Senate on Tuesday — can claim a mandate from voters to allow expiration of the 2001 and 2003 tax rates for those earning more than $250,000.

“The president has called for a balanced approach to the deficit — a combination of spending cuts and increased revenues,” Boehner told reporters. “But a balanced approach isn’t balanced if it means higher tax rates on the small businesses that are key to getting our economy moving again and keeping it moving.”

Boehner said the same thing in a conference call with Republican lawmakers this afternoon, according to two sources with knowledge of the discussion, and said he will be conducting interviews during the next few weeks to drive home his position.

Boehner appealed to House Republicans for unity. The Speaker’s negotiating position was undercut during the past two years when he could not muster the support of a majority of his Conference for bipartisan deals, particularly those dealing with fiscal issues. If he cannot deliver 218 votes, he told members of his Conference, Democrats will run the show in negotiations.

Reid, who spoke with Boehner this morning, said neither leader should draw lines in the sand and signaled he thinks Democrats do indeed have a mandate from Tuesday’s election to raise taxes for those with very large incomes.

 “Look at all the exit polls, look at all the polling, the vast majority of the American people — rich, poor, everybody — agrees that the rich — richest of the rich — have to help a little bit,” Reid said. “People who are making more than a million dollars a year, the vast, vast majority of them are happy to pay that. The only place that people disagree are Republicans in Congress.”

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