Election Day bears fruit? Boehner, Reid talk of compromise on 'fiscal cliff.'

Senate majority leader Harry Reid claims a mandate from Election 2012 to let tax cuts expire for the 'richest of the rich.' House Speaker John Boehner says the mandate is for members of Congress to work together.

J. Scott Applewhite/AP
Speaker John Boehner (R) of Ohio finishes a prepared statement to reporters about the elections and the unfinished business of Congress, at the Capitol on Wednesday.
Susan Walsh/AP
Senate Majority Leader Harry Reid (D) of Nevada gestures as he discusses Tuesday's election results during a news conference on Capitol Hill on Wednesday.

Senate majority leader Harry Reid and House Speaker John Boehner hit a note of compromise not often heard in the last Congress as they weighed in Wednesday on how to deal with the "fiscal cliff" in Congress's upcoming lame-duck session.

But their conciliatory tones, in separate briefings on Capitol Hill, belied sharply different views on how to handle the looming fiscal crisis – and how Tuesday's election should impact lawmaking in Congress.

“If there is a mandate in yesterday’s results, it is a mandate for us to find a way to work together on solutions to the challenges we face together as a nation,” Speaker Boehner said in a briefing with reporters. “My message today is not one of confrontation, but of conviction."

Senator Reid, a former boxer, concurred.

“I know how to fight. I know how to dance. I don't dance as well as I fight, but I'd much rather dance any time,” he said, in a separate briefing. “It's better to dance than to fight.”

But whether Congress tangos or tussles, congressional action is needed before the American economy goes off the fiscal cliff on Jan. 1. That’s when expiring fiscal policy amounting to more than $600 billion in higher taxes and new mandated spending cuts goes into effect. Economists say that could put the economy into a recession in the first half of 2013.

Reid said Congress should deal with the cliff as part of what others have called a “grand bargain,” a wide-ranging debt and deficit reduction deal. And Congress should grapple with that big-picture problem as soon as possible.

“I'm not for kicking the can down the road,” the majority leader said. “I think we've done that far too much.... We know what the issue is. We need to solve that issue. Waiting for a month, six weeks, six months, that's not going to solve the problem. We know what needs to be done. And so I think that we should just roll up our sleeves and get it done.”

Boehner explicitly ruled out such a move in his own statement to the press.

“We won't solve the problem of our fiscal imbalance overnight, in the midst of a lame duck session of Congress,” he said. “And we certainly won't solve it by simply raising tax rates or taking a plunge off the fiscal cliff.”

Instead, Boehner set out a goal of achieving a “down payment” on the nation’s long-term financial solvency that would be a “catalyst” for “major solutions, enacted in 2013.”

Reid swore that neither he nor the speaker would “draw any lines in the sand” on the policy measures needed to avert a fiscal disaster – before both men did everything except say the words, “I have drawn a line in the sand.”

However, he did see Tuesday's election – President Obama’s electoral thrashing of Mitt Romney, a larger Democratic majority in the Senate, and gains for Democrats in the House – as a mandate from voters to allow the Bush tax cuts to expire for households with income over $250,000.

“The mandate was, look at all the exit polls, look at all the polling,” Reid said. “The vast majority of the American people – rich, poor, everybody – agrees that the rich, [the] richest of the rich, have to help a little bit.”

Boehner’s statement was a bit murkier. At times, he seemed to flatly reject Reid’s premise that the election gave Obama a mandate to raise taxes. Letting the Bush tax cuts expire kills job creation by raising taxes on small businesses, he said.

At other moments, however, he seemed open to compromise on the subject.

“In order to garner Republican support for new revenues, the president must be willing to reduce spending and shore up the entitlement programs that are the primary drivers of our debt,” Boehner said. “We aren’t seeking to impose our will on the president; we’re asking him to make good on his ‘balanced’ approach.”

"This was a clever, preemptive move by Mr. Boehner to take the high road in fiscal cliff negotiations," wrote Pete Davis, head of Capital Investment Ideas, in an analysis. "He offered to work with the president, but he emphasized core Republican principles over and over again, without the slightest hint of compromise."

Obama and congressional Democrats frequently called their approach of $3 in spending cuts and lower entitlement spending to $1 in new tax revenue as a “balanced” approach to deficit reduction, especially when compared with the GOP position of no new taxes. 

Away from Capitol Hill, there was little indication that members had a change of heart on Election Day. To get a deal, Boehner, Reid, and Obama will have to convince members in both the Democratic and Republican caucuses to get on board with policy changes – higher taxes on the right, entitlement curbs on the left – that are bitter points of contention.

Rep. Jim Jordan (R) of Ohio, who chairs the Republican Study Committee – the largest and most conservative GOP caucus – said he didn’t see any glint of tax hikes in Boehner’s statement.

“He said, ‘We’re not going to raise taxes,’ ” Representative Jordan said in a phone interview. “The speaker hit the right tone. Someone’s going to have to convince me how raising taxes on job creators is going to create more jobs. It’s just the wrong thing to do.”

Jordan went on to say that House Republicans “have just as strong a mandate from the last election,” when the GOP scored a massive wave of seats, to defeat the president’s agenda as the president had from his 2012 victory.

Across the state, Sen. Sherrod Brown (D) of Ohio, fresh off his own electoral victory, had the exact opposite read on Tuesday’s events.

“The tax cuts for the wealthy should expire, period,” Senator Brown told reporters. “I will never go along with raising the retirement age on Social Security or [the eligibility age for] Medicare.”

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