Monday, November 12, 2012

ECONOMY - Debt Talks Beyond Beltway

"In Debt Talks, Obama Is Ready to Go Beyond Beltway" by JACKIE CALMES, New York Times 11/11/2012

Excerpt

President Obama, emboldened by his decisive re-election and lessons learned over four years in office, is looking to the renewal of budget talks with Republicans this week as a second chance to take command of the nation’s policy debates and finally fulfill his promise to end gridlock in Washington, associates say.

As he prepares to meet with Congressional leaders at the White House on Friday, aides say, Mr. Obama will not simply hunker down there for weeks of closed-door negotiations as he did in mid-2011, when partisan brinkmanship over raising the nation’s debt limit damaged the economy and his political standing. He will travel beyond the Beltway at times to rally public support for a deficit-cutting accord that mixes tax increases on the wealthy with spending cuts.

On Wednesday, Mr. Obama will meet with corporate executives at the White House as he uses the nation’s fiscal problems to start rebuilding relations with business leaders. Though many of them backed Mitt Romney, scores have formed a coalition to push for a budget compromise similar to the one the president seeks. He hopes to enlist them to persuade Republicans in Congress to accept higher taxes on the assurance that he can deliver Democrats’ votes for future reductions in fast-growing entitlement programs like Medicare and Medicaid.

“Every president learns lessons from their successes and failures, and President Obama is no different,” said Dan Pfeiffer, his communications director. “There is no question that lessons were learned in the summer of 2011 that will impact his approach to the presidency for the next four years.”

And with the election campaign over, the campaign for the Obama legacy begins: Mr. Obama will keep his grass-roots organization in place to “have the president’s back,” as its members like to say, on the budget negotiations and other issues in the second term. Democrats concede that the network has not been a particularly effective legislative lobby to date. But they argue that when it was activated to pass payroll tax cuts and low-interest student loans, the pressure made a difference.

Ultimately, however, success or failure will depend on Mr. Obama, starting with his attempts to steer negotiations during the lame-duck Congress, which starts Tuesday, to a successful two-part conclusion.

First, that means averting the “fiscal cliff” created by the coincidental combination of expiring tax cuts and unemployment benefits with across-the-board cuts in military and domestic programs that are set to take effect after Jan. 1. Both parties seek agreement on alternative savings that would be less damaging to the economy than up to $700 billion in immediate tax increases and spending cuts.

Second, for the long term, success means consensus on a framework to overhaul the tax code and benefit programs in 2013 to control the mounting federal debt.

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