On eve of fiscal cliff talks, positions harden

Thu Nov 15, 2012 5:51pm EST
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By Richard Cowan

WASHINGTON (Reuters) - As President Barack Obama and congressional leaders prepared for budget and tax talks on Friday aimed at preventing the economy from falling back into recession next year, Democrats and Republicans dug in on their long-held opposing positions.

"What we won't do is raise tax rates," Senate Republican leader Mitch McConnell warned on Thursday.

But raising income taxes on the wealthy to help shrink the deficit was exactly what Obama highlighted during his first post-election news conference on Wednesday. Twenty-four hours later, Obama spokesman Jay Carney argued that public sentiment was firmly behind the newly re-elected president.

Obama "will not sign, under any circumstances, an extension of tax cuts for the top 2 percent of American earners," Carney told reporters aboard Air Force One en route to New York to survey recent devastating storm damage.

With those tough battle lines drawn, Obama at 10:15 a.m. (1515 GMT) on Friday will bring together the four top leaders of Congress for the first time since the November 6 election.

McConnell, Senate Majority Leader Harry Reid, House of Representatives Speaker John Boehner and House Democratic leader Nancy Pelosi are scheduled to talk with him for about an hour at the White House.

"Let us go to the table in good faith that we want something to happen," Pelosi told reporters, adding, "If nothing happens, the consequences will be great."

While all five leaders have registered the need for cooperation after Democrats scored a healthy win in last week's elections, all signs point to difficult negotiations on how to avoid the "fiscal cliff" on January 1.   Continued...

U.S. President Barack Obama speaks to military fathers and their children before watching the latest Disney/Pixar movie, "Cars 2," in the South Court Auditorium in the Eisenhower Executive Office Building on the White House complex in Washington, June 15, 2011. REUTERS/Larry Downing