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Obama Makes Tax Hike Appeal in Detroit After Weekend Closed-Door Budget Talks

December 10, 2012 at 12:00 AM EST
The president and House Speaker Boehner met face-to-face to discuss budget plans, saying "lines of communication" would remain open. Judy Woodruff talks to Washington Post reporter Lori Montgomery, who explains why politicians have chosen to keep deliberations private and what kind of deal may be forming behind closed doors.
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JUDY WOODRUFF: President Obama made another foray outside Washington today, trying to build public support for a fiscal cliff agreement.

It came a day after he resumed talking with the top House Republican and as a year-end deadline moved even closer.

The president took his public campaign for a deficit deal on his terms to the Daimler diesel plant in Redford, Mich.

PRESIDENT BARACK OBAMA: If Congress doesn’t act soon, meaning in the next few weeks, starting on Jan. 1, everybody is going to see their income taxes go up. It’s true. You all don’t like that?

CROWD: No!

JUDY WOODRUFF: Instead, Mr. Obama again pressed for raising tax rates on the top 2 percent of incomes.

BARACK OBAMA: And that’s a principle I won’t compromise on because I’m not going to have a situation where the wealthiest among us, including folks like me, get to keep all our tax breaks, and then we’re asking students to pay higher student loans.

JUDY WOODRUFF: The Michigan visit came a day after the president and House Speaker John Boehner met privately at the White House, their first one-on-one session since the election.

Neither side gave any details about what was discussed. , Instead they issued identical statements, saying that lines of communication remain open. At the same time, the Sunday talk shows highlighted a partial split in GOP ranks over letting the president have higher tax rates on top earners.

Tennessee Sen. Bob Corker told FOX News Sunday that Republicans should give ground on taxes and concentrate on long-term spending cuts.

SEN. BOB CORKER, R-Tenn.: The focus then shifts to entitlements. And maybe that puts us in a place where we actually can do something that really saves this nation. So there, is a growing body. I actually am beginning to believe that is the best route for us to take.

JUDY WOODRUFF: But, on NBC, House Majority Whip Kevin McCarthy countered that that approach is the wrong way to go.

REP. KEVIN MCCARTHY, R-Calif.: It doesn’t solve the problem. If the president is asking for higher rates, he’s asking for more revenue. Most economists agree the best way to get that is through closing special loopholes. And you know what? When you close those, it makes a fairer tax process.

JUDY WOODRUFF: A new poll from Politico and GeorgeWashingtonUniversity backed the president’s position; 60 percent favored raising taxes on households earning more than $250,000 a year; 38 percent were opposed.

Another survey last week found that, by a 2-to-1 margin, Americans would blame Republicans if there’s no agreement by the end of the year.

For more on the political dynamics at play and what might be in the deal taking shape, we are joined by Lori Montgomery. She’s a reporter for The Washington Post. She covers economic policy and the federal budget.

Welcome back to the program.

LORI MONTGOMERY, The Washington Post: Thanks for having me.

JUDY WOODRUFF: So, let me come at this from a different direction. Is there anything the two sides agree on?

LORI MONTGOMERY: Well, they both finally agree that we need to raise some tax revenue. But they don’t agree on how we should do that.

And that is the fundamental sticking point. The president wants to raise rates on rich people. And John Boehner and House Republicans have drawn a bright line in the sand that they will not raise rates. They will give him revenue, but not by higher rates.

JUDY WOODRUFF: So they have — and we learned that a week ago. That was when the Republicans came out.

They met at the White House yesterday, the president and the speaker. What came out of that meeting?

LORI MONTGOMERY: Neither side is really telling us what happened, but, by all accounts on both sides, the meeting was very cordial. But there were no breakthroughs.

There was no give from Speaker Boehner on the rate question, which, according to Democrats and the White House, is the first hurdle you have got to clear.

They are unwilling to discuss how we’re going to tackle the entitlement problem until Republicans very specifically agree that rates are going to go up.

JUDY WOODRUFF: Each side still saying, Lori, that the other side has to give first?

LORI MONTGOMERY: That’s right. That’s right.

JUDY WOODRUFF: And so right now, what is the pressure on the speaker? I mean, he has to worry about being reelected speaker in January. What is he hearing from his ranks?

LORI MONTGOMERY: Well, people are all over the map. And it’s sort of hard to tell what he could marshal the votes for. And I think that’s one of the problems they’re facing.

When you hear people like Corker, you know, there’s echoes of what his — his point on the House side as well that people are saying, go ahead and give him the rates and then let’s toss this into next year, when we have a debt ceiling fight coming up and we will have pressure to get the spending cuts we want.

But other people say, no way, I won’t vote for rates under any circumstances. So, it’s sort of all over the map right now, and lawmakers don’t really have a lot of information about the state of these negotiations.

JUDY WOODRUFF: So, at this point, are they even talking — are the staffs even talking to each other?

LORI MONTGOMERY: The staffs, we are told, are continuing to talk.

But they don’t have much time. If they want to do a big bipartisan deal that has all these moving parts in it, they really need to start selling it to lawmakers by the end of this week.

JUDY WOODRUFF: What are they saying in these meetings? They’re talking, but neither side — I mean, there must be — is there any scenario presenting or — what do you hear?

LORI MONTGOMERY: That’s an excellent. And I wish I could answer it for you.

(LAUGHTER)

LORI MONTGOMERY: But what we are told is that, you know, I mean, they have got a numbers problem to solve too. Boehner has offered $800 billion over 10 years. The White House wants $1.6 trillion. So, they have got to also meet on the numbers somewhere.

And at this point, Boehner’s office is saying they have refused even to agree to a higher number.

JUDY WOODRUFF: And, finally, one is hearing some talk that one or the other side may feel it’s better to wait until after January the 1st.

LORI MONTGOMERY: Well, I think people are both sides are sort of gaming out what happens if we get to January.

And the Democrats feel that, you know, at that point, everything becomes a tax cut because taxes are already up. So, we will be cutting taxes. And Republicans maybe feel that, you know, you could see where that might be a good thing for them too. So, there are big — I think big pressures pushing against that, though, too.

This is a Congress that has been fighting over these issues for two years. Corker has made this point as well. If we can’t do it — we have been over all these issues. Now is the time. There’s going to be a new Congress in January. You have got to educate all these new people coming in. There are — in addition to the economy, there are incentives to get it done now.

JUDY WOODRUFF: All right, we are going to let you go back to watching it.

Lori Montgomery of The Washington Post, thank you.

LORI MONTGOMERY: Thank you.