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House Speaker calls for 'down payment' on 'fiscal cliff'

In the wake of the GOP’s disappointing election, Speaker John Boehner (R-Ohio) on Wednesday signaled a willingness to accept higher tax revenues as part of a deficit cutting deal.

The fast-approaching deadline to stop a combination of tax hikes and spending cuts left Boehner and other leaders with little time to digest Republican Mitt Romney’s defeat on Tuesday. 

Leaders on both sides of the Capitol moved swiftly to stake out their positions on the fiscal cliff, with Boehner calling for a “down payment” that would lead to a farther-reaching pact in 2013 and Senate Majority Leader Harry Reid (D-Nev.) saying he did not want to see a short-term fix.

“I’m not for kicking the can down the road; I think we’ve done that far too much,” Reid told reporters in the Capitol. “I think we should just roll up our sleeves and get it done.”

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The Democratic leader also cast Obama’s victory over Romney — in which the president won nearly every swing state — as overwhelming, and noted that his party gained seats in both chambers of Congress. “That’s not the status quo,” he said.

Boehner claimed an equal mandate with the president, on the grounds that the same voters who approved a second term for Obama also affirmed a Republican majority in the House. 

The Speaker, who spoke to Obama by phone Wednesday morning, had already warned that Republicans would stand firm against raising “tax rates,” including on wealthy Americans. He noted that during negotiations in 2011, Obama had endorsed tax reform that put the top rates at lower than the current 35 percent.

But, in a concession to Democrats, the Speaker on Wednesday said Republicans would accept a broad fiscal deal that increases tax revenue to the Treasury — the type of agreement that many conservatives consider a tax increase.

“For purposes of forging a bipartisan agreement that begins to solve the problem, we’re willing to accept new revenue, under the right conditions,” Boehner said. “What matters is where the increased revenue comes from, and what type of reform comes with it.

“Does the increased revenue come from government taking a larger share of what the American people earn through higher tax rates?” he said. “Or does it come as the byproduct of a growing economy, energized by a simpler, cleaner, fairer tax code, with fewer loopholes, and lower rates for all?”

Boehner previously has put higher revenues on the table in budget talks, but the timing and focus of his remarks in the aftermath of the election were seen in Washington as something of an olive branch. And while Boehner pushed for lower overall tax rates, he did not repeat the long-standing GOP demand that any increase in revenue be accompanied by equal cuts elsewhere.

Boehner said any new revenue must be coupled with significant spending cuts and entitlement reforms.

The Speaker’s remarks came as part of a carefully choreographed effort by House Republicans to assert their share of authority after a bruising defeat in the presidential and Senate elections.

In a rare sight, the ordinarily off-the-cuff Boehner used a teleprompter for his statement in the most formal of Capitol settings — the Rayburn room just off the House floor. He took no questions from reporters, and within minutes, Majority Leader Eric Cantor (R-Va.), Majority Whip Kevin McCarthy (R-Calif.) and the chairman of the Ways and Means Committee, Rep. Dave Camp (R-Mich.), issued statements echoing Boehner’s message.

One GOP leader who did not issue a statement was Rep. Paul Ryan (Wis.), the defeated vice presidential nominee who will return to the House as the chairman of the Budget Committee.

Before his appearance, Boehner held a conference call with House Republicans in which he exhorted his troops to stick together while working with the reelected president. “When we’re unified, we’re at our strongest. Divided we fail,” Boehner said, according to a person on the call. 

Boehner dismissed the possibility of achieving the grand bargain before Jan. 1.

“We won’t solve the problem of our fiscal imbalance overnight, in the midst of a lame-duck session of Congress,” Boehner said. “And we certainly won’t solve it by simply raising tax rates or taking a plunge off the fiscal cliff.

“What we can do,” the Speaker continued, “is avert the cliff in a manner that serves as a down payment on — and a catalyst for — major solutions, enacted in 2013, that begin to solve the problem.”

He did not describe what a “down payment” might look like, and afterward, a spokesman said only that it would be a topic for negotiation with Democrats.

The White House said Obama called Boehner and other congressional leaders Tuesday night and Wednesday morning.

“The president reiterated his commitment to finding bipartisan solutions to reduce our deficit in a balanced way, cut taxes for middle-class families and small businesses and create jobs,” the White House said in a readout of the calls.

And Vice President Biden suggested to reporters that the election does provide a mandate to raise taxes on the wealthy.

“From what it appears is that, on the … tax issue, there was a clear sort of mandate about people coming much closer to our view about how to deal with tax policy,” Biden said.

He said Obama’s reelection will force Republicans to compromise with Democrats.

“I think the fever will break,” he said.

Many Democrats believe Obama derives a key advantage from the fact that the George W. Bush-era tax rates are going to expire in the absence of any congressional action. The GOP forced Obama to extend the rates for the wealthy in 2010 by tying them to the middle-class rates.

Liberals might feel betrayed by any move by Obama to extend the current rates for the vague promise of new revenue through tax reform in the future.

But that’s exactly what Boehner wants. His remarks on Wednesday amounted to a pitch for a return to the grand bargain that he failed to strike with Obama in 2011.

He concluded with a call for Obama to lead and said to the president, “We want you to succeed.

“Mr. President, this is your moment,” Boehner said. “We’re ready to be led, not as Democrats or Republicans, but as Americans.”

A Senate Democratic aide said Boehner’s words should be understood in the terms of a bargaining table. 

“I would think that his hard stance and puffing up his chest now is all about putting down a marker hard to the right that can eventually be brought to the middle in bipartisan negotiations,” the aide said.

 The right wing of the Republican Party was already girding for battle to prevent any compromise. The conservative Heritage Action released a video announcing the beginning of a “war” with the reelected Obama.

 “Conservatives and Tea Partiers are just sick and tired of Republican leaders compromising on the state and national level with Democrats that grow the size of government,” said Richard Viguerie, a top activist and chairman of ConservativeHQ.com. “We are going to hold their feet to the fire.”

— Alexander Bolton and Molly K. Hooper contributed to this report.

— Updated at 8:35 p.m.