W Private talks between President Barack Obama and top congressional leaders in search of a deal to avoid the year-end "fiscal cliff" are accelerating, officials said Monday, even as the president began putting pressure on Republicans to extend tax cuts for the middle class.
Obama phoned Republican House Speaker John Boehner and Democratic Senate Majority Leader Harry Reid over the weekend, in a sign that high-level negotiations are advancing with only weeks to go before an automatic series of spending cuts and tax hikes starts to hit nearly every American.
Boehner, meanwhile, was laying plans Monday for top Republicans to meet with Erskine Bowles, a chief of staff in the Clinton administration who also has close ties to Obama's White House.
GOP aides noted that Bowles offered a debt-reduction plan last fall in line with Republican principles. That plan called for an overhaul of the tax code and significant spending cuts, including major changes to Medicare and other federal health programs.
"We look forward to talking to Mr. Bowles and (others advocating a debt deal) about their ideas to avert the fiscal cliff without tax hikes that target small businesses and cost jobs," Boehner said.
In recent days, other Republicans -- such as Sens. Lindsey Graham of South Carolina, Bob Corker of Tennessee and Saxby Chambliss of Georgia, and Rep. Peter King of New York -- have voiced support for a deal that includes additional tax revenue.
Still, a wide gap remains between Obama and the Republicans on taxes and changes to federal retirement programs. Resolving those differences are key to avoiding the year-end tax hikes and spending cuts, which threaten to suck $500 billion out of the economy next year and snuff out the recovery.
Talks began 10 days ago with a meeting between Obama and congressional leaders at the White House. But continuing work by staff up to the Thanksgiving weekend and on Monday has not yet made enough progress for a second meeting between Obama and the congressional leaders to be scheduled.
A key dispute is how to raise taxes on the wealthy. Boehner has previously opened the door to about $800 billion in new tax revenue -- achieved through an overhaul of the tax code that eliminates deductions that disproportionately benefit the rich. The speaker and other Republicans have opposed any proposal that increases tax rates.
Obama, however, favors $1.6 trillion in new tax revenue and insists that it be achieved by allowing tax rates on the wealthy to increase at the end of the year, as well as by eliminating deductions.
On Monday, White House press secretary Jay Carney made clear the president was maintaining that position.
"Math tells us that you can't get the kind of balanced approach that you need without having rates be part of the equation," he said.
He said the White House is less interested in tackling the rising cost of Social Security during the current talks, echoing Senate Democrats who have said the program should be reviewed separately next year. "Social Security is not currently a driver of the deficit. That's an economic fact," he said.
In addition to pursuing private talks, the White House began making a public push on Monday, meeting with the leaders of two major business groups -- the Business Roundtable and the U.S. Chamber of Commerce.
In related developments:
- Despite early signs of robust sales, White House economists warned Monday that the uncertainty of a potential hike in taxes next year for middle class taxpayers under the looming fiscal cliff could hurt consumer confidence during the crucial holiday shopping season.
In a new report that coincides with Congress' return after the Thanksgiving holiday, the White House says that if lawmakers don't halt the automatic increase in taxes for households earning less than $250,000, consumers might even curtail their shopping during the current holiday season.
"As we approach the holiday season, which accounts for close to one-fifth of industry sales, retailers can't afford the threat of tax increases on middle-class families," says the report by Obama's National Economic Council and his Council of Economic Advisers.
- Several senior Republicans are breaking ranks with conservative lobbyist Grover Norquist, who vowed to drive Republicans out of office if they didn't pledge to oppose tax increases.
Sen. Corker, of Tennessee, says the only pledge he will keep is his oath of office. House Majority Leader Eric Cantor says no one in his home state of Virginia is talking about what leaders in Washington refer to simply as "The Pledge," a Norquist invention that dates to 1986.
"Oh, I signed it," Sen. Jeff Sessions of Alabama said on Fox News about Norquist's pledge. "But we've got to deal with the crisis we face."
The Associated Press contributed to this report.