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Friday, November 16, 2012 - 16:28

Flickers Of Optimism Detected On US Hill After Budget Meeting

-President Obama, Hill Leaders Agree To Use Word 'Constructive' -House, Senate Leaders Say Talks Got Off To Good Start

WASHINGTON (MNI) - There is one timeless, even cosmic, rule of budget negotiations. It is this: the first meeting is always the easiest one.

So it comes as little surprise that both congressional leaders and President Obama left their first budget meeting Friday saying that the session was "constructive" and the two parties must work together for the good of the country.

Obama met Friday morning with House Speaker John Boehner, Senate Majority Leader Harry Reid, Senate Minority Leader Mitch McConnell, and House Minority Leader Nancy Pelosi for more than an hour in the White House.

The administration's team included Treasury Secretary Tim Geithner, White House chief of staff Jack Lew and National Economic Council director Gene Sperling.

Everyone appeared to be on their best behavior.

"I believe that we can do this and avert this fiscal cliff," Boehner told reporters after the meeting.

"I feel confident that a solution may be in sight," Pelosi said, standing next to her congressional colleagues.

Reid, upon returning from the White House, told congressional reporters that he really does feel positive. "It was a good meeting. There were no harsh words. There was a general feeling that we need to get something done and both sides are going to have to give," Reid said.

After the meeting, White House press secretary Jay Carney issued a statement in which he called the first meeting positive and said policymakers must do everything possible to avert the fiscal cliff.

"Both sides agreed that while there may be differences in our preferred approaches, we will continue a constructive process to find a solution and come to a conclusion as soon as possible," Carney said.

While there are hundreds of details to work out and dozens of major decisions, there is one central dynamic that will drive the parties either to a deal or lead to an ugly derailment.

That is the linkage between the Democratic demand for more revenue and the Republican insistence on entitlement reform.

"We're prepared to put revenue on the table as long as we solve the real problem," McConnell said, adding that "most of my members without exception believe that we're in the dilemma we're in not because we tax too little but because we spend too much."

Put starkly, Democrats believe the nation's main fiscal problem concerns revenues and Republicans say it centers on entitlements. Crafting an agreement that reconciles these conflicting views will be difficult -- but also essential.

After the White House session, an aide to Boehner said the Speaker proposed that the leaders agree on long term revenue targets to guide tax reform, spending targets to shape entitlement reform and enforcement mechanisms to achieve these goals.

Congressional and White House staffs will be working over the coming week and then congressional leaders will meet again with the president the week after Thanksgiving.

This session and others are likely to be much more difficult, contentious and consequential than the first meeting.

** MNI Washington Bureau: (202) 371-2121 **


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