House Speaker John A. Boehner’s fiscal diplomacy tour continued its rapid pace Friday, as he reiterated for a third straight day that President Obama has the “opportunity to lead” on fiscal cliff negotiations.
Boehner, the most influential Republican in Washington now that Obama has been re-elected and Democrats have increased their Senate majority, used his first post-election press conference to provide a more detailed timeline of how he would like to implement any deal that averts the combination of more than $500 billion in automatic tax hikes and spending cuts set to begin in January.
While the deal is far from being cinched, Boehner spelled out that this would be a two-step process in which negotiators reach a deal in December that sets the fiscal framework for new tax revenues and long-term savings from entitlement reform. Then those precise tax and entitlement changes would be implemented in congressional negotiations next year, he said.
“This framework can lead to common ground, and I hope the president will respond today in that same spirit. As I said on Wednesday, this is an opportunity for the president to lead. This is his moment to engage the Congress,” Boehner told reporters.
Top leaders and senior advisers have long known that the fiscal cliff talks would have such a two-step framework. But many rank-and-file lawmakers have been uncertain about the process ahead, wondering whether the entire “grand bargain” would be struck in the next seven weeks.
The speaker’s remarks were carried live by many cable news networks, including financial outlets such as CNBC and Bloomberg TV. Afterward analysts were on air tracking how the markets reacted to Boehner’s comments, an indication of how closely Wall Street is following every statement from congressional leaders.
It was Boehner’s third straight day of a national media tour, which began with a conciliatory speech on Wednesday in which he congratulated Obama on his re-election and said Republicans “are ready to be led”.
On Thursday, he used interviews with ABC News and USA Today to further outline where Republicans stand on some issues, explaining that House Republicans would not pass any compromise that included higher tax rates on the wealthiest individuals, as Obama and Democrats have demanded. Instead, the GOP position is to simply extend all current tax rates as a bridge to a full tax reform process next year, in which the Treasury would end up collecting far more in revenue because that process would result in closing many loopholes and exemptions in the current tax code.
“We passed a bill to extend all of the current tax rates for one year so that we had time to overhaul our tax code,” Boehner said Friday. He spoke less than two hours before Obama was slated to make his first remarks on the fiscal negotiations – during which he is expected to reiterate his demand for higher tax rates on income above $250,000.
The run-up to the January deadline to avert the tax hikes and spending cuts will test Boehner’s leadership as much as any moment in his two-year tenure. Many rank-and-file Republicans are averse to any deal that leads to something resembling a tax increase, which is why they have issued a bright-line directive against any agreement that raises rates on any individuals.
Politically, however, Republicans lost ground after Tuesday’s elections left Obama in place with a wider-than-anticipated margin in the electoral college, as well as an additional two seats for Democrats in the Senate. Even Boehner lost at least six seats off his majority in the House.
He acknowledged that “we’ve got some work to do” as Republicans to figure out how they lost on Tuesday, but he maintained that the House GOP still had leverage in any future negotiations.
“There’s a Republican majority here in the House. The American people re-elected the Republican majority. And I’m proud of the fact that our team in a very difficult year was able to maintain our majority,” he said.
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