-President Obama To Meet With Congressional Leaders Friday
-Congress To Hold Leadership Elections, Discuss Fiscal Options
-House Expected To Vote On Russia PNTR Bill This Week

By John Shaw

WASHINGTON (MNI) – President Obama will meet with congressional
leaders Friday to begin talks on how to resolve the fiscal cliff
impasse.

The House and Senate return to Washington Tuesday to begin the Lame
Duck session. Both chambers reconvene at 2 p.m. ET.

Before meeting with congressional leaders, the president will meet
Tuesday with labor leaders and Wednesday with a group of business
executives.

Late last week, both Obama and House Speaker John Boehner sent
conciliatory signals, but were careful not to appear too eager to reach
an agreement in a way that would compel them to make major compromises.

The president repeated his insistence that any deficit reduction
package be “balanced” with both spending cuts and revenue increases.

“We can’t just cut our way to prosperity,” Obama said, arguing that
tax increases for the wealthy must be part of a final agreement.

But the president also struck a conciliatory note. “I’m open to
compromise. I’m open to new ideas,” he said.

Boehner said it’s essential for Congress and Obama to find a way to
avert the fiscal cliff. He repeated that he opposes increasing tax rates
as part of a deficit reduction package, adding he is waiting for new
proposals from the president.

“It’s important for us to come to an agreement,” Boehner said,
referring to the fiscal cliff.

“Everything on the revenue side and on the spending side has to be
on the table,” he said.

The Speaker said he is open to new revenues as long as they are
generated by tax reform which spurs economic growth or closing unneeded
tax loopholes. He said that tax reform and entitlement reform are
critical to a long-term deficit reduction agreement that should be
reached next year.

Boehner has said that Congress should pass a “down payment” on
deficit reduction this year, but declined to say how large a package he
would like to pass and how this package would relate to efforts to avert
the fiscal cliff.

Since last Tuesday’s election, Obama, Boehner and Senate Majority
Leader Harry Reid have all signalled they are ready to try to negotiate
a budget deal. Senate Minority Leader Mitch McConnell, in several
statements last week, indicated that he is more inclined to fight than
to dance, at least for right now.

Arguably, the most productive thing that could come from Friday’s
meeting is for the president and congressional leaders to create a
process by which the fiscal cliff negotiations can occur.

Before Friday’s meeting, the House and Senate will hold leadership
elections. No major changes are expected regarding the status of
Boehner, Reid and McConnell. House Minority Leader Nancy Pelosi has not
said definitively if she will run again to be the House Democratic
leader.

The House is expected to vote Friday on legislation to grant
permanent normal trade relations with Russia.

The House Rules Committee will meet Tuesday to consider a rule
under which the House will consider the Russia PNTR bill.

Also on Friday, the Peter G. Peterson Foundation is hosting a
fiscal cliff conference in which the key speakers will be former Federal
Reserve Board Committee chairmen Alan Greenspan and Paul Volker as well
as Erskine Bowles and Alan Simpson, the co-chairmen of the National
Fiscal Commission.

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

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