Obama, Boehner closer to cliff's edge

Speaker John Boehner (R-Ohio) and President Obama met Thursday at the White House for fiscal talks amid increasing pessimism the two can hammer out a deal before Christmas.

The 50-minute long Oval Office meeting was the first between the two since Sunday. It followed a day of harsh rhetoric and attacks that suggested Obama and Boehner were digging in rather than narrowing their differences on taxes and entitlements.

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Aides to Obama and Boehner described the meeting as “frank” and emphasized that “the lines of communication remain open.” Treasury Secretary Tim Geithner and White House director of legislative affairs Rob Nabors also participated in the meeting, the administration confirmed.

Earlier on Thursday, a visibly frustrated Boehner used a press conference to rip Obama for not taking spending cuts seriously.

“It’s clear the president is just not serious about cutting spending. But spending is the problem,” Boehner said. “Republicans want to solve the problem and get this spending line down. The president wants to pretend spending isn’t the problem. That’s why we don’t have an agreement.”

White House press secretary Jay Carney responded by accusing Boehner of proffering “fantasy economics” in arguing they could achieve $800 billion in new tax revenues simply by eliminating deductions. The White House believes this would be impossible without going after breaks widely used by the middle class, such as the mortgage interest deduction.

“We cannot achieve the kind of revenue necessary simply through cutting deductions, or capping deductions or closing loopholes limited to the wealthy, to those making more than $250,000 in an economically sensible or political feasible way,” Carney said. “It's not possible.”

The attacks led to a gloomy atmosphere on Capitol Hill, where staff and lawmakers are dreading the possibility of working up to New Year’s Eve with just a brief break for Christmas Day.

Yet budget talks in Washington also are often darkest before the dawn, and the latest fire across Pennsylvania Avenue prefaced Obama inviting Boehner to the White House for a new meeting. The two have been working in private to reach an agreement for more than a week.

Democrats say Boehner won’t relent on raising tax rates on the wealthy for fear it could cost him his job, a suggestion the Speaker dismissed Friday.

“I’m not concerned about my job as Speaker,” said Boehner, who is scheduled to return to Ohio on Friday. “What I’m concerned about is doing the right thing for our kids and grandkids. And if we don’t fix this spending problem, their future is going to be rather bleak.”

President Obama, meanwhile, looked to intensify pressure on the House Speaker with a series of local television interviews.

In an interview with Minneapolis CBS affiliate, Obama said Boehner had a "contentious caucus" and that not raising taxes was "something of a religion for some Republicans."

"The big problem right now is that the Republicans in the House are resistant to the idea of the wealthiest Americans paying higher tax rates and I understand they have a philosophical objection,” he said. “On the other hand, we’re willing to make some really tough decisions about spending cuts, we’ve already made a trillion dollars’ worth of spending cuts.”

GOP leaders signaled they were willing to work up to Christmas Eve to try to get a deal.

House Majority Leader Eric Cantor (R-Va.) told members to expect weekend votes in the days before Christmas.

“As was announced last week and the week before, the House will not adjourn the 112th Congress until action has been taken to avert the fiscal cliff,” he said.

The Sunday meeting between Boehner and Obama prompted an exchange of new offers aimed at avoiding the so-called “fiscal cliff” of more than $500 billion in tax hikes and spending cuts set to hit in January.

Federal Reserve Chairman Ben Bernanke on Wednesday said the cliff was already hurting the economy, which experts say could slip into a recession if Washington fails to act.

Obama lowered his revenue demand from $1.6 trillion over 10 years to $1.4 trillion in his latest offer, but Boehner stuck with his plan to raise $800 billion in tax revenue, none of it from raising income tax rates.

A GOP aide said Thursday that Boehner could conceivably increase his $800 billion offer, but only if Obama agreed to massive entitlement reforms along the lines of the House-passed budget that block-granted Medicaid and converted Medicare into an optional defined-contribution system in which seniors could receive subsidies to buy private insurance.

Carney insisted Obama has been specific in putting $600 billion in new spending cuts on the table, arguing it is Boehner who will not specify his entitlement demands.

“There were no specific spending proposals” from Boehner, Carney said. “If their answer is go look at the [House-passed] budget, which lacked specifics to begin with and contained the voucherization of Medicare, that’s not going to happen.”

Obama, in talks with Boehner last summer, agreed to put raising the eligibility age of Medicare — from 65 to 67 — on the table. House Minority Leader Nancy Pelosi (Calif.) and other Democrats strongly oppose such a change.

And in an interview earlier this week, the president didn’t rule out raising the Medicare eligibility age, though Senate Democratic Whip Dick Durbin (Ill.) on Thursday said he had been told it is “off the table.”

Obama and Democrats have pressed House Republicans to vote on a Senate bill that extends tax rates on annual family income below $250,000 and patches the Alternative Minimum Tax so that it does not hit middle-class taxpayers.

“In case of emergency, the House should break glass and allow vote on middle-class extension,” Carney said.

Boehner avoided ruling out such a vote when pressed on the issue by reporters.

“The law of the land is that everyone’s income taxes will go up on Jan. 1,” he said. “I’ve made it clear that I think that is unacceptable, but until we get this issue resolved, that risk remains.”

There appears to be little support in Boehner’s conference for that vote, however.

“It’s not going to happen. We need to see serious spending cuts, and those aren’t coming,” said Rep. Mike Simpson (R-Idaho).

Russell Berman contributed to this story.

This story was first posted at 3:41 p.m. and was updated at 7:07 p.m.