Bluster and hot rhetoric aside, the White House and House Republicans have identified areas of significant overlap that could form the basis for a final agreement after “fiscal cliff” posturing gives way to hard bargaining.
Both sides now concede that tax revenue and reductions in entitlement spending are essential elements of any deal. If the talks succeed, it probably will be because House Speaker John Boehner yields on raising tax rates for top earners and the White House bends on how to reduce spending on Medicare and accepts some changes in Social Security.
The White House and Boehner kept up the ridicule of each other’s negotiating stances Tuesday. But beneath the tough words were the possible makings of a deal that could borrow heavily from a near- bargain last year during debt-limit negotiations.
Then, Obama was willing to reduce cost-of-living increases for Social Security beneficiaries and increase the eligibility age for Medicare, as Boehner and other top Republicans have demanded. On Tuesday, Obama did not shut the door on Republican ideas on such entitlement programs.
“I’m prepared to make some tough decisions on some of these issues,” Obama said, “but I can’t ask folks who are, you know, middle-class seniors who are on Medicare, young people who are trying to get student loans to go to college, I can’t ask them to sacrifice and not ask anything of higher-income folks.”
“I’m happy to entertain other ideas that the Republicans may present,” he added in an interview with Bloomberg Television.
At the core, the negotiations center on three key points: whether tax rates for upper-income taxpayers should go up, how deeply to cut spending on entitlements such as Medicare and how to deal with raising the government’s borrowing limit early next year.