Obama-Boehner Meeting Sparks Optimism on ‘Fiscal Cliff’ Deal

President Obama took his debt-reduction campaign to Michigan on Monday, amid cautious signs that progress is being made on avoiding the “fiscal cliff.”

Obama and Republican Speaker of the House John Boehner held a private meeting Sunday with no aides present. The two leaders’ spokespeople issued identical statements afterward that read: “This afternoon, the president and Speaker Boehner met at the White House to discuss efforts to resolve the fiscal cliff. We’re not reading out details of the conversation, but the lines of communication remain open.”

The fact that communication lines were open is a positive step. Obama and Boehner spent most of last week firing barbs at each other, so Sunday’s unscheduled meeting offered optimism that the two sides were working on a compromise, or at least offering more specific details on plans that would help the government avoid mandatory tax hikes and budget cuts that are scheduled to take effect Jan. 1.

Obama has been adamant about increasing tax rates for the top 2 percent, but vague on entitlement spending cuts. Boehner has been adamant about spending cuts for entitlement programs, but vague on which tax deductions and loopholes he would close to raise revenues.

Time For Compromise

However, members of both parties realize it may be time to give a little. Erskine Bowles, chief of staff in the Clinton White House and former co-chair of Obama’s deficit-reduction commission, said that Democrats have to work harder on spending cuts for health care.

“The president put $350 billion worth of cuts on the table, and that’s not enough,” Bowles said Sunday on CBS’ “Face the Nation.” “We’re going to have to do more. We may not like it, but we simply made promises we can’t keep, and we’ve got to face up to that.”

Across the aisle, some Republicans are getting on board with tax increases to generate revenue.

“A lot of people are putting forth a theory, and I actually think it has merit, where you go ahead and give the president … the rate increase on the top 2 percent, and all of a sudden the shift goes back to entitlements,” Tennessee Republican Sen. Bob Corker said on “Fox News Sunday.”

“Will I accept a tax increase as a part of a deal to actually solve our problems? Yes,” Sen. Tom Coburn, R-Okla., said on ABC News’ “This Week.”

Rates Going Up

Obama’s plan to generate revenue by increasing taxes includes raising the top rates from 33 and 35 percent to 36 and 39.6 percent. Other parts of the Obama proposal include limiting deductions and tax exemptions and raising rates on capital gains and dividends from investment income.

Some other ideas that could be part of any final agreement include revisions on estate taxes, home mortgage deductions and charitable giving

Boehner previously had said that the Republicans were opposed to any tax hikes at any level, but some in the party are backing off that strong stand.

“If there is anyone out there who’s quote, rich, and doesn’t think their taxes are going up, the drinks are on me,” former Sen. Alan Simpson, R-Wyo., said.

Members of Congress have until Dec. 31 to work things out or huge tax increases for all taxpayers plus mandatory spending cuts in Defense and discretionary spending programs like Medicare and Social Security will go into effect.

“It’s not surprising that it hasn’t come together yet,” Peter Orszag, Obama’s first director of the Office of Management and Budget, said Monday on MSNBC’s “Morning Joe” program. “If we had a deal on Dec. 10, both bases would say, ‘You guys are nuts, you gave too soon, you gave too much.'”

Obama spoke to auto workers in Redford, Mich., today. He was there to talk about the effect of the fiscal cliff on the economy, but most of his remarks dealt with the “right to work” issue being debated in Michigan.

“These right-to-work laws have nothing to do with economics and everything to do with politics,” Obama said. “What they are really talking about is giving you the right to work for less money.”

Lawmakers in Lansing are expected to take final votes Tuesday on a three-bill package to make Michigan the 24th state to allow workers to decide whether to pay fees to their union.