Politico’s VandeHei and Allen: “[B]behind the scenes, top officials who have been involved in the talks for many months say the contours of a deal – including the size of tax hikes and spending cuts it will likely contain — are starting to take shape. Cut through the fog, and here’s what to expect: Taxes will go up just shy of $1.2 trillion — the middle ground of what President Barack Obama wants and what Republicans say they could stomach. Entitlement programs, mainly Medicare, will be cut by no less than $400 billion - and perhaps a lot more, to get Republicans to swallow those tax hikes. There will be at least $1.2 trillion in spending cuts and ‘war savings.’ And any final deal will come not by a group effort but in a private deal between two men: Obama and House Speaker John Boehner (R-Ohio). The two men had what one insider described as a short, curt conversation Wednesday night — but the private lines of communications remain very much open.”
Obama’s pitch yesterday on the importance of getting a deal on the fiscal cliff: “It’s too important for Washington to screw this up.”
The AP: “President Barack Obama said Wednesday he believes that members of both parties can reach a ‘‘framework’’ on a debt-cutting deal before Christmas, making his case with a mix of optimism and pressure on congressional Republicans to keep tax rates from rising on the middle class.
Is Obama open to “raising revenue” from the wealthy but not necessarily raising rates? Erskine Bowles says yes. National Journal quotes Bowles from a Christian Science Monitor breakfast yesterday: “I heard it not only from the team, but from the president.” He added, “It all doesn’t have to come in the form of higher rates.” (But note the word ALL…)
Recently, the Washington Post editorial page urged Obama and the Democrats to tackle entitlement reform in the fiscal negotiations. “Elections do have consequences, and Mr. Obama ran on a clear platform of increasing taxes on the wealthy. But he was clear on something else, too: Deficit reduction must be ‘balanced,’ including spending cuts as well as tax increases. Since 60 percent of the federal budget goes to entitlement programs such as Medicare, Medicaid and Social Security, there’s no way to achieve balance without slowing the rate of increase of those programs.”
But the New York Times editorial page counters, “[T]he fact is, the Obama administration has already pledged to extract more than $1 trillion in savings over the next decade from these programs [Medicare and Medicaid]. There is not much more that can be cut without hurting the most vulnerable Americans.”
The Wall Street Journal: “Morgan Stanley Chief Executive James Gorman enlisted his employees to pressure Congress to reach a bipartisan deficit-reduction deal, one of the most high-profile in a series of moves by major corporations seeking to influence the course of negotiations. Mr. Gorman, in an email Tuesday, asked Morgan Stanley ’s more than 16,000 U.S. financial advisers and branch managers to contact their members of Congress and urge them to reach “a bipartisan compromise” to avoid a year-end budget crisis known as the ‘fiscal cliff.’”