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Obama Takes Fiscal Plan to Business Leaders

The 2012 Capitol Christmas Tree; photo by Alex Wong/Getty Images

The U.S. Capitol Christmas Tree is lit on Tuesday. The year’s tree is a 65-foot spruce from the White River National Forest in Colorado. Photo by Alex Wong/Getty Images.

The Morning Line

The “fiscal cliff” will remain an outside game Wednesday, as President Obama makes his case to business leaders while House Speaker John Boehner, R-Ohio, holds a news conference on Capitol Hill.

Mr. Obama is scheduled to deliver morning remarks at the quarterly meeting of the Business Roundtable in Washington, where, according to a White House official, “he will reiterate that he will not accept a deal that doesn’t include higher rates on the wealthiest individuals.” The president will also ask the leaders “for their help in supporting an approach that resolves the debt limit without drama or delay,” added the official.

Wednesday’s appearance by Mr. Obama comes a day after he talked with Bloomberg TV in his first interview since winning re-election, again rejecting the proposal offered by House Republicans on Monday as “out of balance.”

The president warned that if Republicans want to preserve lower tax rates for the top 2 percent of wage earners, then it would mean painful cuts elsewhere.

“It’s not me being stubborn. It’s not me being partisan. It’s just a matter of math,” Mr. Obama said. “You know, there’s been a lot of talk that somehow we can raise $800 billion or $1 trillion worth of revenue just by closing loopholes and deductions, but a lot of your viewers understand that the only way to do that would be if you completely eliminated, for example, charitable deductions. Well, if you eliminated charitable deductions, that means every hospital and university and not-for-profit agency across the country would suddenly find themselves on the verge of collapse. So that’s not a realistic option.”

Bloomberg’s Julianna Goldman asked when he and Boehner would sit down again for another round of face-to-face negotiations.

“I don’t think that the issue right now has to do with sitting in a room,” Mr. Obama said. “The issue right now that’s relevant is the acknowledgment that if we’re going to raise revenues that are sufficient to balance with the very tough cuts that we’ve already made and the further reforms in entitlements that I’m prepared to make, that we’re going to have to see the rates on the top 2 percent go up. And we’re not going to be able to get a deal without it.”

Boehner, meantime, said that for an agreement to happen, the president needs to put forward a serious counter-offer to the plan submitted by Republicans.

“If the president really wants to avoid sending the economy over the fiscal cliff, he has done nothing to demonstrate it,” Boehner said in a statement. “With our latest offer we have demonstrated there is a middle ground solution that can cut spending and bring in revenue without hurting American small businesses. The president now has an obligation to respond with a proposal that does the same and can pass both chambers of Congress. We’re ready and eager to talk with the president about such a proposal.”

Behind the scenes, House Republicans are weighing their options, including a measure to extend only the tax rates on families making less than $250,000 annually, reports Jonathan Weisman of The New York Times:

Senior Republican leadership aides say they are contemplating a fallback position since a standoff over expiring tax rates will be portrayed by Democrats as evidence that the opposition is willing to allow taxes to rise on the middle class to keep taxes from rising on the rich — and their intransigence could mean taxes go up on rich, poor and middle class alike.

The leadership officials now say that if no deal can be struck to avert the automatic expiration of all the Bush-era tax cuts and the onset of deep, across-the-board spending cuts, they could foresee taking up and passing legislation this month to extend the tax cuts for the middle class and then resume the bitter fight over spending and taxes as the nation approaches the next hard deadline: its statutory borrowing limit, which could be reached in late January or February.

Politico’s Manu Raju and Jake Sherman, meanwhile, look at the intra-party fight brewing among Republicans over the issue of revenue increases:

Speaker John Boehner’s pitch of $800 billion in new tax revenues already has tea party-backed conservatives accusing GOP leaders of peddling a plan that would destroy job growth. Conservative outside groups are urging their party’s rank and file to rebel and reject any new taxes. Senate Minority Leader Mitch McConnell and his leadership team pointedly declined to endorse the proposal.

All told, it points to a party still struggling to find a way out that doesn’t destroy its reputation with the activist base or take the nation over the fiscal cliff. The question remains: Does it hold firm by its party’s small government principles and reject any new taxes — no matter the cost? Or does it try to stake a middle ground and cut a bipartisan deal to end the partisan gridlock, even if it means latching on to a deal that would force the conservative base to recoil?

Amid the public posturing and internal squabbling, a poll released Tuesday by the Pew Research Center and The Washington Post found that Americans by nearly a two-to-one margin would lay most of the blame for going over the fiscal cliff on House Republicans.

Fifty-three percent of respondents said the GOP would be most at fault, compared with 27 percent who chose Mr. Obama. Twelve percent of those polled said the two sides would share in the blame equally.

On Tuesday’s NewsHour, congressional correspondent Kwame Holman updated the state of play from Capitol Hill.

Watch the segment here or below:

Nobel Prize-winning economist and New York Times columnist Paul Krugman called the latest Republican plan “a smokescreen.” Krugman spoke with Gwen Ifill on Tuesday. His analysis of what might happen politically wasn’t optimistic:

I mean, everybody’s guess — and I have no more expertise than anyone else — is that we will go over the cliff. Taxes on everybody will go up. Then the Democrats will propose a bill that cuts taxes on the middle class. The Republicans won’t dare vote it down … I think Erskine Bowles, bless his heart, still wants to believe that we live in the Washington of 20 or 30 years ago, where reasonable men could get together and make sensible deals. I don’t think we’re in that Washington anymore.


  • Sen. Marco Rubio, R-Fla., and Rep. Paul Ryan, R-Wis., both spoke at an awards dinner Tuesday, outlining their vision for the Republican Party and how they can represent all Americans.

  • Presidential historian Michael Beschloss revisits the last month of former President Lyndon Johnson’s life, which includes audio of his last conversation with former President Richard Nixon.

  • Colorado Sen. Michael Bennet will head the Democratic Senatorial Campaign Committee, a move that the Denver Post says may push the moderate to the left.

  • Reuters reports that Mr. Obama is considering former Nebraska GOP Sen. Chuck Hagel to lead the Department of Defense.

  • A Quinnipiac University poll released Wednesday found Americans split 48 percent to 46 percent when it comes to support for same-sex marriage. The survey also showed 51 percent of Americans favored the legalization of marijuana, while 44 percent opposed.

  • Top faces from MSNBC, including Rachel Maddow and Al Sharpton, and Arianna Huffington visited the White House on Tuesday to discuss the fiscal situation with the president, Politico writes.

  • Texas lawmaker Jack Brooks, who rode in the Dallas motorcade in which former President John Kennedy was shot, has died.

  • Wednesday’s tidbit from NewsHour partner Face the Facts USA: “117,000 individuals double dipped” by collecting federal benefits for both unemployment and disabilities in 2010.

  • Rep. Tim Ryan, D-Ohio, was arrested in August for public intoxication while attending a wedding. On Tuesday a judge dismissed the charge.

  • The Senate failed to pass a United Nations treaty that bans discrimination against people with disabilities, despite an appearance by disability rights advocate and former GOP Sen. Bob Dole and support from President Obama and former President George W. Bush.

  • Vogue Editor-in-Chief Anna Wintour is on the shortlist for the ambassador position to the United Kingdom or France, according to Bloomberg News.

  • Jon Favreau, Mr. Obama’s speech writer, might not stay for a second term.

  • Buzzfeed posts the eight-minute tribute video to Secretary of State Hillary Clinton from a policy event that is convincing watchers she’ll run for president in 2016. It’s star-studded with international leaders and a special message from President Obama. Former British Prime Minister Tony Blair caps the glowing montage with soaring Bruno Mars soundtrack with this comment: “I just have an instinct that the best is yet to come.”

  • The Washington Post continues its investigation into the 2010 campaign of D.C. Mayor Vincent Gray with new details that some of his campaign contributions weren’t reported.

  • After reporters wondered where Arizona Gov. Jan Brewer had gone for a week, Bloomberg News learns the Republican is in Afghanistan.

  • Georgia GOP Sen. Saxby Chambliss could lose to former presidential candidate Herman Cain in a 2014 senate primary, Public Policy Polling finds, but he’d lead in a race against recently ousted Florida GOP Rep. Allen West, who could move one state north to reclaim an office.

  • There’s one opponent Chambliss won’t face in his next senate race: Newt Gingrich.

  • In other polling news, PPP finds people care about Bowles/Simpson only slightly more than they care about Panetta/Burns, “a mythical Clinton Chief of Staff/former western Republican Senator combo we conceived of to test how many people would say they had an opinion even about something that doesn’t exist.”

  • Costco wins again. Mitt and Ann Romney went shopping, so TMZ nabbed photos.


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