JUDY WOODRUFF: With the election over, there's new talk in Washington about finally coming to grips with taxes, spending and the deficit. The mammoth problem has been hanging over Congress and the president for many months, and now time is running out.
In just five days, lawmakers troop back to the Capitol for a final, lame-duck session. And they are under mounting pressure to avoid going off the much-talked-about fiscal cliff. Come January 1, the Bush era tax cuts will expire, as will a 2 percent payroll tax cut that was passed in December of 2010.
At the same time, large automatic spending cuts would begin to bite, 10 percent less for defense in 2013, and an 8 percent cut in domestic programs.
The result, according to Federal Reserve Chairman Ben Bernanke, could be disastrous. He said this in July, citing the Congressional Budget Office.
BEN BERNANKE, Federal Reserve chairman: The CBO has estimated that if the full range of tax increases and spending cuts were allowed to take effect, a scenario widely referred to as the fiscal cliff, a shallow recession would occur early next year and about 1.4 million fewer jobs would be created in 2013.
JUDY WOODRUFF: Today, in a new estimate, CBO said that extending all tax breaks, other than the payroll tax cut, would boost growth by nearly 1.5 percent next year. And it said raising taxes just for individuals earning more than $200,000 a year wouldn't significantly hurt growth.
A deal on taxes and spending and deficits eluded the so-called congressional super committee a year ago, but now outside groups are pressing for a deal, as in this ad being run by Fix the Debt, an organization founded by former Republican Sen. Alan Simpson and former Clinton Chief of Staff Erskine Bowles.
WOMAN: We should be figuring this out.
JUDY WOODRUFF: Still, finding compromise will be tough. Senior Obama campaign aide David Axelrod argued today that the president now has new public support for raising taxes on better-off Americans.
DAVID AXELROD, Obama Campaign: But the president did campaign all over this country. He talked about it in debates. He talked about it in speeches on the need for balanced deficit reduction that included some new revenues. And he was reelected by -- in a significant way.
JUDY WOODRUFF: House Speaker John Boehner said yesterday that Republicans are willing to consider raising revenues, but only within limits.
REP. JOHN BOEHNER, R-Ohio: The president has called for a balanced approach to the deficit, a combination of spending cuts and increased revenues. But a balanced approach isn't balanced if it means higher taxes on small businesses that are the key to getting our economy moving again and keeping it moving.
JUDY WOODRUFF: Meanwhile, Republican and Democratic senators known as the gang of eight have restarted talks aimed at finding a deal. They held a conference call yesterday.
And Wall Street signaled its own concern with Wednesday's big sell-off. It was blamed partly on fears there will be no deal, and the country will go off the fiscal cliff.
A number of business leaders are starting to take a more public position on how to tackle the fiscal cliff.
We get the views of one of the CEOs who have joined in with the campaign to fix the debt that we referred to in our piece.
Mark Bertolini is chairman and CEO of Aetna, a health insurance company with more than $33 billion in revenue and a worldwide work force of some 34,000 people. He joins us from Hartford, Conn.
Mr. Bertolini, thank you for being with us.
And let me just start by saying, why is the fiscal cliff of such concern to you? I mean, do you -- why -- what's the threat here?
MARK T. BERTOLINI, Aetna: Well, I think the big threat, Judy, is that if we go off the fiscal cliff, we will see negative GDP in the first quarter.
And when you get into a recession, American business, worldwide business begins to make plans on how to reduce its operating costs. And that ultimately results in fewer jobs.
So fewer jobs coupled with a negative GDP ultimately will put the economy in the wrong direction. And that's not good for anyone.
JUDY WOODRUFF: Well, at the same time, I'm sure you know there's a body of thought out there that says some of this concern about the fiscal cliff is exaggerated, that even if it didn't happen by Jan. 1, that there would still be time to get things worked out, that this is -- in other words, that this timetable is not so urgent, really.
MARK T. BERTOLINI: Well, I think that's misplaced.
American businesses are already planning for 2013. We take our operating budget to our board on Nov. 29, and we're already gating our investments and pulling back on employment until we figure out what the macroeconomic environment is going to do next year.
So the sooner we know that, the more we can get about doing cap acts and hiring people.
So the longer it takes, the more difficult it is to be able to turn things around in 2013.
JUDY WOODRUFF: So, each side, Mr. Bertolini, is arguing that they have got public opinion on their side.
The Republicans are saying the public is behind them in believing that to raise taxes on the well-to-do, people earning over $250,000 a year, is going to hurt growth and it's going to kill jobs and it's not something they want to do.
MARK T. BERTOLINI: Judy, no matter how you do the arithmetic, we have to raise revenue and we have to deal with entitlement programs.
You can't do this all by raising taxes and you can't do it all by cutting costs. So I think Americans -- what Americans really want is the truth.
They want leadership that says here's what we need to do no matter how difficult it is, personal accountability on the part of Washington to get something done and then a level of transparency about what's being done so that people can see progress along the way.
That's the way we do it in business. That's the way we need to do it in Washington.
JUDY WOODRUFF: And then, as you know, there's a Democratic argument. They're saying there are real limits to what you can cut in domestic spending and entitlement programs like Medicare before they say you are doing real harm to people.
MARK T. BERTOLINI: I think that the cuts need to be over the long term and not as near-term now, because I think, again, cuts could impact the economy today.
But we look at this 10-year scoring -- and what to say it's not 15-year scoring -- at getting the debt solved.
This debt is not going to get solved in 2013, but a plan put in place that shows the direction of where we're headed is going to do a lot for confidence in the economy and business.
JUDY WOODRUFF: Well, let me ask you a very political question, because the same people who were not able to come up with a deal in the summer of 2011 after many weeks of trying -- both sides seemed to be very serious about it -- those are the same folks who are coming back to the table right now in -- at the end of 2012.
What makes you believe that they can work something out now that they couldn't -- when they couldn't do it before?
MARK T. BERTOLINI: Well, a number of them have nothing to lose, No. 1.
No. 2., I think the president's not running for reelection again, so he has an opportunity to provide some leadership here.
And I think the two most important powers that a CEO can exercise, any leader, is the power to convene and the power to set the agenda. So, let's get everybody in a room, let's convene them.
Let's put the agenda together to say, here are the issues we need to solve and let's not let them leave until they have it done. And I think those that are part of the lame-duck session that aren't coming back owe it to the American public to make some of the tough decisions we need to make today.
JUDY WOODRUFF: Do you believe the president has a stronger hand now that he's coming off of being re-elected?
MARK T. BERTOLINI: I think he has a mandate to lead. And if he uses that leadership well, I think he can get this done.
JUDY WOODRUFF: But how that would be different from what he did the last time?
MARK T. BERTOLINI: Because there are going to be decisions on both the tax side and on the entitlement side that would have hurt him in this election. Now he doesn't have that facing him anymore.
He's got two years where he can create a legacy.
And I think it's -- getting this debt fixed would be a huge legacy, not only for people today and the Americans that are unemployed, but for the future generations that rely on us to spend our money wisely and invest for the future.
JUDY WOODRUFF: And let me just ask you, finally, is the Simpson-Bowles framework the kind of thing you would like to see? Can you just give us a general outline of what you think would work here?
MARK T. BERTOLINI: I think the Simpson-Bowles framework is perfect to build off of.
Now, time’s moved on, so the baseline has changed, but I think that's a great framework to work. And that's why the Fix the Debt group led by Erskine Bowles and Alan Simpson and people like Saxby Chambliss and Mark Warner are people who are serious about a bipartisan solution, and this is the best framework I think to build off of.
JUDY WOODRUFF: Mark Bertolini with Aetna, we thank you very much for talking with us.
MARK T. BERTOLINI: Thank you, Judy.
JUDY WOODRUFF: And, by the way, The Associated Press is reporting tonight that the president will make his first post-election comments on the economy and the fiscal cliff at the White House tomorrow.
And we will be hearing other views on how to deal with the fiscal cliff in the weeks to come.