Politics

Obama Assembles Bipartisan Panel to Negotiate Tax Cut Compromise

In this Nov. 3 file photo, House Republican Leader John Boehner, right, speaks alongside Republican Senate Leader Mitch McConnell on Capitol Hill in Washington. (AP Photo)

In this Nov. 3 file photo, House Republican Leader John Boehner, right, speaks alongside Republican Senate Leader Mitch McConnell on Capitol Hill in Washington. (AP Photo)

President Obama, after meeting with congressional Republicans and Democrats for the first time since the midterm election, announced Tuesday that he's assembling a special panel to work toward breaking the logjam over the Bush tax cuts. Though he emerged without a compromise, he expressed confidence that the talks would "yield results" before the end of the year. 

"There was broad agreement that we need to work to get that resolved," Obama said. 

The clock is ticking. Lawmakers and the administration have until Dec. 31 to work out a deal or just about every taxpayer will face a tax hike -- and so far neither side has offered a compromise the other has liked. But Republicans had positive reviews for the president's overture after the lengthy meeting ended Tuesday afternoon and agreed to appoint negotiators from the House and Senate to "unlock" the disagreement, as House Republican Leader John Boehner put it. 

"The president, I think, put his best foot forward," House Republican Whip Eric Cantor, R-Va., said. 

Rep. Dave Camp, R-Mich., the top Republican on the House Ways and Means Committee, was swiftly named to represent Republicans on the House side. Sen. Jon Kyl, R-Ariz., will represent Senate Republicans and Sen. Max Baucus, D-Mont., will represent Senate Democrats. 

Obama said he's appointed Treasury Secretary Timothy Geithner and his budget director, Jacob Lew, to work with the representatives on the Hill. "That process is beginning right away," the president said, while continuing to argue that taxes should be allowed to rise for the wealthy to prevent an additional $700 billion from being added to the national debt over the next decade. 

Both sides agree that the middle class should not see their taxes increase, but they diverge over whether taxes on the wealthy should revert back to higher rates -- Republicans don't want a tax hike for anybody, while Democrats want the top tier of earners to pay more. 

Coming out of the meeting Tuesday, Obama and GOP lawmakers stuck by their arguments while suggesting that a compromise is attainable. 

"I think the Republicans made the point that stopping all the looming tax hikes and cutting spending would in fact, create jobs and get the economy moving again. And so, we're looking forward to a conversation with the White House over extending all of the current rates and I remain optimistic," Boehner said. 

Republicans were taking a carrot-and-stick approach to the negotiation ahead of the bipartisan sit-down. They dangled the prospect of a cooperative Congress before the president while at the same time warning that they'll take matters into their own hands in the next legislative session if they don't get their way on the tax cuts. 

"House and Senate Republicans will work to get the job done in the new Congress" if Democrats don't act, Boehner and Senate Republican Leader Mitch McConnell wrote in a column Tuesday. 

With both sides giving little ground on the issue, it's unclear what a compromise -- if possible -- could look like, though some have suggested a temporary extension for the wealthy is politically feasible.

The White House dialed down expectations ahead of the summit, which had been postponed from earlier this month. White House Press Secretary Robert Gibbs earlier described the meeting as "the beginning of a conversation" and predicted participants would not emerge with a "full agreement" on the tax cuts. But he said Obama "absolutely" does not want taxes to rise on the middle class. 

Despite the drama over the tax cuts, the agenda for the lame-duck session of Congress is much broader. The ratification of the arms reduction treaty with Russia known as START was the other top item on the table for Tuesday's meeting. 

And Congress is tasked with belatedly approving the fiscal 2011 budget or face a shutdown, and it must decide whether to extend long-term jobless benefits and repeal the military's "don't ask, don't tell" policy banning gays from serving openly in the military. Democrats also want to push a bill that would give some young illegal immigrants a path to legal residency provided they attend college or join the military.