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Fiscal crisis spurs Obama action

Nov. 8: Newly re-elected, President Obama moved quickly today to open negotiations with Congressional Republican leaders over the main unfinished business of his term — a major deficit-reduction deal to avert a looming fiscal crisis — as he began preparing for a second term that will include significant cabinet changes.

Obama, while still at home in Chicago at midday, called Speaker John A. Boehner in what was described as a brief and cordial exchange on the need to reach some budget compromise in the lame-duck session of Congress starting next week.

Later at the Capitol, Boehner publicly responded before assembled reporters with his most explicit and conciliatory offer to date on Republicans’ willingness to raise tax revenues, but not top rates, together with a spending cut package.

“Mr President, this is your moment,” said Boehner, a day after Congressional Republicans suffered election losses but kept their House majority. “We’re ready to be led — not as Democrats or Republicans, but as Americans. We want you to lead, not as a liberal or a conservative, but as president of the United States of America.”

His statement came a few hours after Senator Harry Reid, leader of a Democratic Senate majority that made unexpected gains, extended his own olive branch to the opposition. While saying that Democrats would not be pushed around, Reid, a former boxer, added, “It’s better to dance than to fight.”

Both men’s remarks followed Obama’s own overture in his victory speech after midnight yesterday. “In the coming weeks and months,” he said, “I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together: reducing our deficit, reforming our tax code, fixing our immigration system, freeing ourselves from foreign oil.”

After his speech, Obama tried to call both Boehner and the Senate Republican leader, Mitch McConnell, but was told they were asleep.

The efforts from both sides, after a long and exhausting campaign, suggested the urgency of acting in the few weeks before roughly $700 billion in automatic tax increases and across-the-board spending cuts take effect at year’s end — the “fiscal cliff.” A failure to reach agreement could arrest the economic recovery.

Corporate America and financial markets for months have been dreading the prospect of a partisan impasse.

While Obama enters the next fray with heightened leverage, both sides agree, the coming negotiations hold big risks for both parties and for the president’s ability to pursue other priorities in a new term, like investments in education and research, and an overhaul of immigration law.

The President flew back to Washington from Chicago late yesterday, his post-election relief reflected in a playful race up the steps of Air Force One with his younger daughter, Sasha. At the White House, he prepared to shake up his staff to help him tackle daunting economic and international challenges. He will study lists of candidates for various positions that a senior adviser, Pete Rouse, assembled in recent weeks as Obama crisscrossed the country campaigning.

The most prominent members of his cabinet will leave soon.

 
 
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