Obama Takes Fiscal Plan to Business Leaders

The "fiscal cliff" will remain an outside game Wednesday, as President Obama makes his case to business leaders while House Speaker John Boehner, R-Ohio, holds a news conference on Capitol Hill. Mr. Obama is scheduled to deliver morning remarks at the quarterly meeting of the Business Roundtable in Washington, where, according to a White House official, "he will reiterate that he will not accept a deal that doesn't include higher rates on the wealthiest individuals." The president will also ask the leaders "for their help in supporting an approach that resolves the debt limit without drama or delay," added the official. Wednesday's appearance by Mr. Obama comes a day after he talked with Bloomberg TV in his first interview since winning re-election, again rejecting the proposal offered by House Republicans on Monday as "out of balance."

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The president warned that if Republicans want to preserve lower tax rates for the top 2 percent of wage earners, then it would mean painful cuts elsewhere. "It's not me being stubborn. It's not me being partisan. It's just a matter of math," Mr. Obama said. "You know, there's been a lot of talk that somehow we can raise $800 billion or $1 trillion worth of revenue just by closing loopholes and deductions, but a lot of your viewers understand that the only way to do that would be if you completely eliminated, for example, charitable deductions. Well, if you eliminated charitable deductions, that means every hospital and university and not-for-profit agency across the country would suddenly find themselves on the verge of collapse. So that's not a realistic option." Bloomberg's Julianna Goldman asked when he and Boehner would sit down again for another round of face-to-face negotiations. "I don't think that the issue right now has to do with sitting in a room," Mr. Obama said. "The issue right now that's relevant is the acknowledgment that if we're going to raise revenues that are sufficient to balance with the very tough cuts that we've already made and the further reforms in entitlements that I'm prepared to make, that we're going to have to see the rates on the top 2 percent go up. And we're not going to be able to get a deal without it." Boehner, meantime, said that for an agreement to happen, the president needs to put forward a serious counter-offer to the plan submitted by Republicans. "If the president really wants to avoid sending the economy over the fiscal cliff, he has done nothing to demonstrate it," Boehner said in a statement. "With our latest offer we have demonstrated there is a middle ground solution that can cut spending and bring in revenue without hurting American small businesses. The president now has an obligation to respond with a proposal that does the same and can pass both chambers of Congress. We're ready and eager to talk with the president about such a proposal." Behind the scenes, House Republicans are weighing their options, including a measure to extend only the tax rates on families making less than $250,000 annually, reports Jonathan Weisman of The New York Times: Senior Republican leadership aides say they are contemplating a fallback position since a standoff over expiring tax rates will be portrayed by Democrats as evidence that the opposition is willing to allow taxes to rise on the middle class to keep taxes from rising on the rich -- and their intransigence could mean taxes go up on rich, poor and middle class alike. The leadership officials now say that if no deal can be struck to avert the automatic expiration of all the Bush-era tax cuts and the onset of deep, across-the-board spending cuts, they could foresee taking up and passing legislation this month to extend the tax cuts for the middle class and then resume the bitter fight over spending and taxes as the nation approaches the next hard deadline: its statutory borrowing limit, which could be reached in late January or February. Politico's Manu Raju and Jake Sherman, meanwhile, look at the intra-party fight brewing among Republicans over the issue of revenue increases: Speaker John Boehner's pitch of $800 billion in new tax revenues already has tea party-backed conservatives accusing GOP leaders of peddling a plan that would destroy job growth. Conservative outside groups are urging their party's rank and file to rebel and reject any new taxes. Senate Minority Leader Mitch McConnell and his leadership team pointedly declined to endorse the proposal. All told, it points to a party still struggling to find a way out that doesn't destroy its reputation with the activist base or take the nation over the fiscal cliff. The question remains: Does it hold firm by its party's small government principles and reject any new taxes -- no matter the cost? Or does it try to stake a middle ground and cut a bipartisan deal to end the partisan gridlock, even if it means latching on to a deal that would force the conservative base to recoil? Amid the public posturing and internal squabbling, a poll released Tuesday by the Pew Research Center and The Washington Post found that Americans by nearly a two-to-one margin would lay most of the blame for going over the fiscal cliff on House Republicans. Fifty-three percent of respondents said the GOP would be most at fault, compared with 27 percent who chose Mr. Obama. Twelve percent of those polled said the two sides would share in the blame equally. On Tuesday's NewsHour, congressional correspondent Kwame Holman updated the state of play from Capitol Hill.