WASHINGTON, (Reuters) – Republican and Democratic congressional leaders emerged from a meeting with President Barack Obama yesterday pledging to find common ground on taxes and spending that would allow them to avert a looming “fiscal cliff” that could send the economy back into recession.
The top lawmakers spoke to reporters as a group for the first time in more than a year in what aides said was a joint decision to project a message of unity.
Each side at least signaled a willingness to put “on the table” issues dear to the two parties for decades.
The two Democrats, Senate Majority Leader Harry Reid and Nancy Pelosi, the minority leader in the House of Representatives, said they recognized the need to curb spending.
John Boehner, the Republican speaker of the House, and Mitch McConnell, who leads the party in the Senate, said they had agreed to put “revenue on the table” as the two sides enter what are likely to be weeks of tense negotiations before a Dec. 31 deadline.
Starting on Jan. 2, about $600 billion worth of tax increases and spending reductions, including $109 billion in cuts to domestic and defense programs, will begin to kick in if Congress cannot decide how to replace them with less extreme deficit-reduction measures.
Nonpartisan budget forecasters say failure to reach a deal could push the U.S. economy back into recession and drive up the unemployment rate.
Both sides are eager to reassure the public that Washington will not see a repeat of the white-knuckle budget standoffs that spooked consumers and investors last year.
“We have the cornerstones of being able to work something out,” Reid said, standing outside the White House after a meeting with Obama, Vice President Joe Biden and other top officials that lasted more than an hour.
The S&P 500 stock index has dropped 4.7 percent since the Nov. 6 election as investors have turned their attention to the uncertainty surrounding the fiscal cliff.
But stocks closed up on Friday on hopes that politicians would find common ground to steer clear of the danger.
The meeting marked the first time Obama, a Democrat, sat down with his Republican opposition since he won re-election last week.
