Obama, top Republican meet on 'fiscal cliff'

WASHINGTON (AP) — President Barack Obama and the top Republican in Congress negotiated at the White House late Thursday in what aides called "frank" talks aimed at breaking a stubborn deadlock and steering the nation away from an economy-threatening "fiscal cliff."

There was no indication whether any progress had been made, though the use of the word "frank" by both sides to describe the talks suggested the president and House Speaker John Boehner speaker stuck hard to their opposing positions.

Thursday night's meeting was the two men's second face-to-face encounter in five days as they seek to find an agreement that avoids major tax increases and across-the-board spending cuts scheduled to kick in on Jan. 1. Experts warn the "fiscal cliff" could plunge the fragile U.S. economy back into recession.

The meeting came shortly after Obama suggested that the sluggish pace of deficit-cutting talks between the administration and congressional Republicans was a result of a "contentious caucus" of Republican lawmakers who were making it difficult for Boehner to negotiate.

Boehner saw things differently. "Unfortunately, the White House is so unserious about cutting spending that it appears willing to slow-walk any agreement and walk our economy right up to the fiscal cliff."

Before the meeting, Boehner accused Obama of dragging out negotiations. Obama is insisting on higher tax rates for household incomes above $250,000 to cut federal deficits; Boehner says he opposes higher rates, though he has said he would be willing to raise tax revenue instead by closing loopholes and deductions.

Obama, in an interview during the day with WCCO-TV in Minneapolis, said that he was hopeful of a "change in attitude" from Republicans on raising taxes on the wealthy. "It shouldn't be hard to get resolved," he said.

He added that the notion of not raising taxes "has become sort of a religion for a lot of members of the Republican Party. I think Speaker Boehner has a contentious caucus, as his caucus is tough on him sometimes so he doesn't want to look like he's giving in to me somehow because that might hurt him in his own caucus."

There's increasing resignation within the Republican Party that Obama is going to prevail on the rate issue since the alternative is to allow taxes on all workers to go way up when tax cuts implemented during George W. Bush presidency expire on Dec. 31.

"I think it's time to end debate on rates," said Republican Sen. Richard Burr. "It's exactly what both parties are for. We're for extending the middle-class rates. We can debate the upper-end rates and what they are when we get into tax reform."

Beyond the disagreement over tax rates, there is a deep philosophical disagreement on government spending, especially so-called entitlement programs like the Medicare health insurance program for older Americans and the Social Security pension program. Republicans want big cuts, and Democrats don't.

Dick Durbin, a key Obama ally in the Senate, said Thursday that he has been told that increasing the eligibility age of Medicare from 65 to 67 is "no longer one of the items being considered by the White House." In negotiations between Boehner and Obama more than a year ago, it was widely believed that Obama had been ready to accept the raising of the eligibility age.

Neither side has given much ground, and Boehner's exchange of proposals with Obama seemed to generate more hard feelings than progress.

House Democratic Leader Nancy Pelosi said a deal must be reached "in the next couple of days or the very beginning of next week" to avoid the fiscal cliff.

She criticized Republican House leaders for sending lawmakers home on Thursday, saying they should stay in Washington and work on a solution. Last week, most House members left town on Wednesday.

Pelosi said, "Here we are once again having a two-day work week in the Congress of the United States."

Republican House Majority Leader Eric Cantor has warned that Congress may stay in session over the Christmas holiday to reach a deal.

The deadline to stop the expiration of Bush-era tax cuts and the start of across-the-board spending cuts is the result of Washington's failure to complete a deficit-reduction deal last year. Even if an agreement is reached, the slow pace of negotiations is jeopardizing chances that it could be written into proper legislative form and passed through both the House and Senate before the new Congress convenes on Jan. 3.

The White House has slightly reduced its demands on taxes — from $1.6 trillion over a decade to $1.4 trillion — but isn't yielding on demands that rates rise for wealthier earners.

Boehner responded with an offer very much like one he gave the White House more than a week ago that proposed $800 billion in new revenue, half of Obama's original demand. Boehner is also pressing for an increase in the Medicare eligibility age.

Both sides accuse the other of delaying the talks. Democrats say Boehner is unwilling to crack on the key issue of raising tax rates on family income over $250,000 because he's afraid of a revolt by conservatives and from younger, ambitious members of his leadership team.

"I do have an increasing concern that the speaker ... is trying to string this out until Jan. 3 because that's when he would be re-elected as speaker," said Rep. Chris Van Hollen, the top Democrat on the House Budget Committee. "And I think he's nervous that if he can't get a majority of his House Republican members to support a reasonable agreement that that could put his speakership election in jeopardy."

Republicans say it's Democrats who are dragging out the talks.

"In the past 48 hours, the president has not been negotiating in good faith, in my opinion," said Rep. Pat Tiberi, who said he was increasingly pessimistic that a deal could be reached.