Lawmaker Sees Shift in Fiscal Cliff Negotiations

By: From CNN
By: From CNN

WASHINGTON (CNN) -- Both sides agree the wealthy will pay more, so now fiscal cliff talks come down to how much Republicans can wring out of the White House in return for giving in on taxes.

To President Barack Obama, it's all about first locking in additional revenue from raising taxes on high-income owners, an outcome the GOP has long rejected.

Republicans led by House Speaker John Boehner want to secure commitments on entitlement reforms and spending cuts opposed by Democrats as part of a broader agreement to reduce the nation's chronic federal deficits and debt.

A GOP source told CNN that talks between staff members on both sides resumed Thursday for the first time this week, after Obama and Boehner spoke by phone the day before.

Meanwhile, retiring Republican Rep. Steve LaTourette of Ohio told CNN that he sensed a shift in the House GOP approach during a conference meeting Wednesday.

"The sense was that there's a growing number of folks in our party that are saying, 'You know what, the president has won this round relative to the rates, but we need to you to sit down and get the second half of the deal and that's the spending,'" LaTourette said.

It remains unclear if a deal will happen before the end of the year -- less than four weeks away -- or if the negotiations will carry over into 2013 after the fiscal cliff of automatic tax hikes and spending cuts takes effect.

While economists warn that going over the fiscal cliff could lead to a recession, the administration has signaled it can delay some of the impacts to allow time to work out a deal.

All signs point toward a two-step approach sought by the newly re-elected Obama -- an initial agreement that would extend lower tax rates for income up to $250,000 for families, while letting rates return to higher levels from the Clinton era on income above that threshold.

Even conservatives such as Oklahoma Sen. Tom Coburn and Louisiana Gov. Bobby Jindal acknowledge the obvious -- taxes on the wealthy are going up despite opposition by Republicans.

"Whatever deal is reached is going to contain elements that are detrimental to our economy," Jindal wrote Thursday in an opinion piece published by Politico. "Elections have consequences, and the country is going to feel those consequences soon.

At the same time, Jindal wrote, "Republicans certainly should fight to at least get something done that will matter."

"At present, any reading of the headlines over the past week indicates that Republicans are fighting to protect the rich and cut benefits for seniors," he added. "It may be possible to have worse political positioning than that, but I'm not sure how."

Coburn, a notorious fiscal hawk, told MSNBC on Wednesday that he would support higher tax rates on wealthier Americans as part of a broader deal to avoid the fiscal cliff and broader deficit crisis.

"I know we have to raise revenue," Coburn said. "I don't really care which way we do it. Actually, I would rather see rates go up than do it the other way, because it gives us a greater chance to reform the tax code and broaden the base in the future."

After meeting with his conference Wednesday, Boehner told reporters that the rich will be paying more, but he still hoped to limit any increase to ending tax deductions and loopholes rather than Obama's demand for higher rates.

"We have got to cut spending and I believe it is appropriate to put revenues on the table," Boehner said. "Now, the revenues that we are putting on the table are going to come from guess who? The rich."

He continued, "There are ways to limit deductions, close loopholes and have the same people pay more of their money to the federal government without raising tax rates, which we believe will harm our economy."

Obama, however, continued to insist that Republicans must agree to higher tax rates for the wealthiest Americans before working out a broader agreement on tackling the nation's chronic federal deficits and debt.

Under his plan, 98% of the country would have current rates extended, with higher rates affecting only 2% of top earners, the president and Democrats note.

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