Obama, Boehner launch second effort to reach grand bargain to cut deficit

President Obama and Speaker John Boehner (R-Ohio) and their staffs will be the principal negotiators in talks to avoid the "fiscal cliff."

As the talks begin formally at the White House on Friday, lawmakers and special-interest groups are scrambling to figure out who else will be in the room and how to influence the outcome.

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Obama will host Boehner, Senate Majority Leader Harry Reid (D-Nev.), Senate Republican Leader Mitch McConnell (Ky.) and House Democratic Leader Nancy Pelosi (Calif.) at 10:15 a.m. in the Roosevelt Room. Senior congressional aides, however, describe it as more of a photo-op than a substantive bargaining session.

Informal talks are already under way, behind the scenes, between White House officials and congressional staff, according to a senior Senate aide. Obama has also called the Democratic leaders of the Senate and House to organize strategy.

A senior House Democratic aide said Obama and Pelosi have spoken three times since the election.

A senior House Republican aide, however, said Obama’s staff has not begun any informal talks with Boehner’s staff.

Congressional leadership aides say Obama and Boehner will pick up where they left off in the summer of 2011, when they almost sealed a deal to cut hundreds of billions from Medicare and Medicaid and raise nearly $800 billion in new tax revenues.

Obama and Boehner will lead the talks, but there will be more input from other congressional leaders this time compared to last year, when reports of the concessions Obama made to Boehner in private caught Democrats by surprise.

Reid confronted Jack Lew, then the White House budget director, in July of 2011 about why he had been kept in the dark about hundreds of billions of dollars in proposed cuts.

“I’m the Senate majority leader — why don’t I know about this deal?” Reid demanded as soon as Lew walked into a meeting with Senate Democrats.

Congressional Democrats are pressing for more access to the talks.

“I think everybody operates under the assumption that Speaker Boehner will need Democratic help on any proposal to get it out of the House,” said a Democratic aide. "I would think House Republicans would very much want House Democratic leadership at the table when any deal gets cut.”

Senior congressional aides say there is no fixed negotiating group, such as a Gang of Six or a Committee of 12, as in past negotiations. The cast of participants will fluctuate as various players bid for their priorities. Yet the ultimate deciders will be Obama and Boehner.

Republicans think Obama will be able to bring his party along to support any deal he signs off on, while Democrats say the House GOP conference, dominated by conservatives, will prove the biggest obstacle to passing a grand bargain through Congress.

“The only way we’re going to solve this present crisis and get past the political stalemate is for the president himself to lead,” McConnell said Thursday. “He’s the only one who can lead the members of his own party to do something they wouldn’t ordinarily do.”

“I think Pelosi and Reid will go along with whatever the White House delivers. It’s what Boehner can deliver” that will determine what gets through Congress, said a Republican senator.

Republican senators predict members of their conference will sign off on any deal Boehner can move through the House.

“We're going to have to get something that the president will sign and that the House will pass. And I think that [if] you get that, it will then ultimately have enough votes to pass in the Senate,” Sen. John Barrasso (Wyo.), chairman of the Senate Republican Policy Committee, said in an MSNBC interview.

Senate Republican Whip Jon Kyl (Ariz.) said McConnell would be Boehner’s “wingman” in the talks.

Some Democrats worry about the prospect of letting Obama and his senior advisers hash out a deal with Boehner on their own. They remember the steep cuts he reportedly agreed to in 2011 and the deal he struck with McConnell in December of 2010 to extend virtually all the Bush-era tax rates.

House Democrats are demanding that Pelosi not be shut out of the talks, as she was in December of 2010, the last time the Bush tax cuts were due to expire.

“She’s the Democratic leader of the House and I think she has to be at the table. Absolutely,” said Rep. Henry Waxman (Calif.), the ranking Democrat on the Energy and Commerce Committee and a Pelosi ally. “I’d expect she’d want to be at the table. She better be.”

Rep. Sandy Levin (Mich.), the ranking Democrat on the Ways and Means panel, said Pelosi’s participation is “vital.”

He said Democratic members of the Ways and Means panel would work closely with Pelosi.

Pelosi said in a statement Thursday that “House Democrats will act as partners in an effort to reach an agreement.”

Senate sources see the active involvement of Pelosi and Reid as intended to keep Obama from drifting too far toward accepting Republican demands on cutting Medicare and other safety-net programs.

During the last round of talks with Boehner, Obama’s representatives agreed to cut $250 billion from Medicare over the next decade and use a new formula to calculate cost-of-living adjustments for Social Security benefits, according to The New York Times.

Reid has insisted Social Security stay off the bargaining table.

Sen. Charles Schumer (D-N.Y.), Reid’s deputy, told reporters Wednesday that any deal to avoid the fiscal cliff must increase tax rates on families earning more than $250,000 annually.

Obama will press congressional leaders Friday not to let disagreements over taxing the wealthy or reforming safety-net programs imperil a deal to extend current tax rates for middle-income families.

“The president will also reiterate that he wants to work with leaders in both parties to achieve a significant, balanced deficit-reduction plan that puts our nation on a sustainable fiscal path,” said a White House official.

Rep. Chris Van Hollen (Md.), the ranking Democrat on the Budget Committee, thinks Obama will drive a harder bargain with Republicans this December.

“I’m absolutely convinced that this time there will be a different end to this movie because the president has been absolutely clear that if we want to be serious about reducing the deficit, we’ve got to ask very wealthy people to contribute,” he said during a recent C-SPAN "Newsmakers" interview.