Obama, GOP leaders seek truce on tax cuts

With tax increases looming, President Obama and congressional leaders tapped a group of high-level negotiators Tuesday to seek a compromise that will extend the George W. Bush-era tax breaks due to expire on Jan. 1.

But punting decisions to the short-term task force was the only concrete decision that emerged from Tuesday’s much-anticipated meeting between Mr. Obama and the bipartisan congressional leadership - the first meeting since the GOP’s big wins in the Nov. 2 midterm elections.

Both sides said the meeting produced promises of cooperation, but said they would wait to see if the other side follows through.

“We had a very nice meeting today. Of course, we’ve had a lot of very nice meetings. The question is: Can we find the common ground the American people expect us to find?” said House Minority Leader John A. Boehner of Ohio, set to be speaker in the next Congress in January.

The meeting ran about two hours, and for about 35 minutes at the end, the lawmakers and the president and vice president adjourned to a separate room to meet without any staffers present.

Mr. Obama afterward told reporters he had tapped Treasury Secretary Timothy F. Geithner and top budget aide Jacob Lew to negotiate with four lawmakers, a Republican and a Democrat from each chamber, on the fate of the tax cuts. The president said he wants them to report back on a possible deal in the next couple of days.

Republicans want to see the 2001 and 2003 Bush tax cuts extended in full, and permanently. Democrats, though, are more divided, with Mr. Obama and his party’s leaders in Congress wanting the tax cuts for the wealthiest Americans to expire, while many rank-and-file Democrats want at least a short-term extension of all the tax cuts.

Democrats balked at bringing the issue to the floor before the election, fearful of putting vulnerable lawmakers on the spot just before facing voters. But the ensuing election results haven’t changed the dividing lines much.

And even as the negotiators prepared to meet, Democrats were laying plans to hold votes on extending just the tax cuts for those making less than $250,000 - the position their leadership backs.

The president said there is now pressure on both parties to break the stalemate he has said dominated the last two years, during which Democrats pushed through a giant health insurance overhaul, rewrote the regulatory rules for Wall Street and passed an $814 billion economic stimulus package.

“The American people did not vote for gridlock,” Mr. Obama said. “They’re demanding cooperation, and they’re demanding progress, and they’ll hold all of us - and I mean all of us - accountable for it.”

Mr. Obama also called for the Senate to ratify a nuclear arms reduction treaty with Russia and to extend unemployment benefits for the long-term jobless, two other measures facing an uncertain future in the brief lame-duck session.

House Minority Whip Eric Cantor of Virginia said Mr. Obama acknowledged to the Republicans that he had not reached out enough to them during the last two years, and the leaders said they think more face time can only be a good thing.

“I think that spending more time will help us find some common ground,” Mr. Boehner said.

But Senate Minority Leader Mitch McConnell sounded a note of caution about the public’s expectations, pointing to the fact that voters regularly choose to divide power between Democrats and Republicans.

“Some of these periods when you have divided government have been quite productive. I think of the second Clinton administration with welfare reform, a balanced budget, with trade agreements,” the Kentucky Republican said.