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US House Speaker Boehner open to budget deal

Bloomberg/Washington 30 Nov 12 | 12:41 AM

House Speaker John Boehner says he’s open to a budget deal with President Barack Obama. He may need Democratic help to push any agreement through his chamber.

Pressure from at least 60 small-government House Republicans, most backed by the anti-tax Tea Party, means Boehner must construct a plan for averting the so-called fiscal cliff that can win some Democratic votes. Congress is trying to head off more than $600 billion in automatic spending cuts and tax increases set to begin in January.

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“Everybody’s for fixing the problem until you get into the weeds," said Ron Bonjean, who was an aide to Republican former Speaker Dennis Hastert of Illinois. “Serious divisions are going to likely slow this process down."

Boehner, 63, of Ohio, and other Republicans, have called on Obama to propose a way to trim entitlement programs in exchange for more tax revenue. All sides are trying to craft an agreement that would satisfy the president, congressional leaders of both parties and, for Boehner, enough Republican lawmakers for the math to work in the 435-member House.

The speaker was in a similar position in negotiating the 2011 budget deal that set up the automatic spending cuts as a condition of raising the debt ceiling, following a standoff that took the US near a default. With 218 votes needed, the plan was passed with support from 174 Republicans and 95 Democrats. Opposing it were 66 Republicans and 95 Democrats.

“I know this is a very difficult time for our speaker and our leadership. So, I have great sympathy for John Boehner," Representative Dan Burton, an Indiana Republican, said in an interview this week.

“Obama is in the driver seat."

Boehner and other Republicans insist on overhauling entitlement programmes — such as Medicare and Medicaid — and changing the US tax code in exchange for new revenue sought by Democrats. Yesterday, the speaker pressed Obama and congressional Democrats to get “serious" about spending cuts.

He also maintained his opposition to Democrats’ proposal to let the George W Bush-era tax cuts expire December 31 for top earners. Boehner rejected a suggestion by Republican House member Tom Cole of Oklahoma that party members accede to the president’s demand that Congress extend the tax cuts for families with incomes of less than $250,000 a year.

Still, the speaker told reporters yesterday he’s “optimistic that we can continue to work together to avert this crisis, and sooner rather than later."

Stocks rose after Boehner spoke. The Standard & Poor’s 500 Index climbed 0.8 per cent to 1,409.93 in New York, after erasing a decline of as much as 1 per cent. The Dow Jones Industrial Average added 106.98 points, or 0.8 per cent, to 12,985.11.

Obama spoke with Boehner on the phone last night about negotiations to avert the fiscal cliff, said Kevin Smith, a spokesman for Boehner. Smith did not provide any more details about the conversation. Boehner is scheduled to hold his weekly on-camera press conference at 11:30 am.

Treasury Secretary Timothy Geithner is scheduled to meet today with each of the four top leaders in Congress, including Boehner. That will mark the first face-to-face meetings between high-ranking administration officials and top lawmakers since November 16.

The number of Republican votes for any deal this time may fluctuate, said Representative Jeff Flake, an Arizona Republican who won a Senate seat in November. He will vote in the House in the current lame-duck session.

“It depends on the agreement, it really does," Flake said in an interview.

Representative Allyson Schwartz, a Pennsylvania Democrat, said that regardless of what agreement may be reached, Boehner probably will lose at least 50 to 60 votes among Republicans who earlier opposed bipartisan measures to raise the debt ceiling and stopgap spending bills to keep the government operating.

“It really is a question the Republicans will have to decide, if they’re going to work with us," she said in an interview. “That’s how we’ve gotten all the big stuff before."

Republicans hold the House majority with 241 seats to the Democrats’ 192, with two vacancies. In January, Democrats will gain eight seats.

“We don’t discuss votes, but we’re pleased with the support for the framework offered by the leaders to avert the fiscal cliff without raising tax rates," Kevin Smith, a Boehner spokesman, said in a statement.

At least 51 of the 55 Tea Party-backed House members were re-elected November 6, cementing their influence in budget negotiations. In addition, the principles of the Republican Study Committee, a group of 165 lawmakers that promotes small government, align with those of the Tea Party on fiscal issues.

“It’s a very diverse body and rightly so. We have a first responsibility to represent our district back home, not the speaker’s opinion," Representative James Lankford, an Oklahoma Republican, said in an interview, while emphasising his support for Boehner as a negotiator.

Anti-tax, small government Republicans say a deal between Obama and congressional leaders can’t raise tax rates and must include an overhaul of entitlement programs such as Medicare. Spending cuts of about $109 billion to discretionary programmes slated for 2013 must be part of a deal, according to Representative Tim Huelskamp, a Kansas Republican.

Putting off those cuts is “unacceptable," and concessions on increasing tax rates for any income level “would be political suicide" for the party, said Huelskamp, a Tea Party caucus member re-elected for a second term.

Even the most strident anti-tax Republicans — including Huelskamp, Raul Labrador of Idaho, Jim Jordan of Ohio and Tom McClintock of California — have said they would be open to increasing tax revenue in a deal to avoid the fiscal cliff, mostly by ending or limiting some tax breaks. They continue to oppose increasing tax rates.

“Every conservative is OK with closing loopholes," Labrador said during a “conversation with conservatives" event in Washington on November 14. “What we want to make sure is that we don’t have marginal rates go up and that the overall tax burden remains the same."

Representative Mike Coffman, a Colorado Republican, said Boehner would have a “hard time selling an increase in marginal tax rates to the conference."

“We will be probably willing to support raising revenue through closing loopholes and deductions," Coffman, a member of the Tea Party caucus, said in an interview. “The line would be drawn that we don’t want marginal rates to go up and that we want the Bush tax cuts extended and permanent."

Without an agreement from Democrats to overhaul Medicare and Medicaid, Boehner may risk the support of many Republicans. Democrats have said Social Security is off the table.

Dissent from fellow Republicans in 2011 posed the biggest test to Boehner’s first year as speaker. Amid Republican opposition to tax increases, talks between Boehner and Obama on a long-term deficit-cutting plan to be tied to the debt-limit increase collapsed.

At the time, Boehner likened negotiating with the White House to “dealing with a bowl of Jell-O." Obama said that at one point Boehner didn’t return his phone call, and the president complained of being “left at the altar."

Jordan, chairman of the Republican Study Committee, voted against raising the debt ceiling last year. The ticking clock on the fiscal cliff is “a crisis that we created with legislation that was passed here," he said.

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