US congressional leaders emerged from a meeting with President Barack Obama yesterday vowing to find common ground on taxes and spending that would allow them to avoid a “fiscal cliff” that could push the economy back into recession.
Democrats said they recognised the need to curb spending and Republicans said they had agreed to put “revenue on the table” as the two sides enter what are likely to be weeks of tense negotiations ahead of a December 31st deadline.
Both sides are eager to reassure investors that Washington will not see a repeat of the white-knuckle budget standoffs that spooked consumers and financial markets last year.
After a White House meeting that lasted a little more than an hour, the top two Republican leaders in Congress spoke alongside the two Democratic leaders – a rare occurrence.
“I feel very good about what we were able to talk about. We have the cornerstones of being able to work something out,” said Senate Democratic leader Harry Reid.
US stocks went up on the positive remarks by Mr Reid and the other leaders – House speaker John Boehner, Senate Republican leader Mitch McConnell and House Democratic leader Nancy Pelosi.
The meeting marked the first time Mr Obama, a Democrat, has sat down with his Republican opposition since he won re-election last week.
“I think we’re all aware that we have some urgent business to do,” Mr Obama told reporters at the start of the meeting.
The president insists that tax rates on the wealthiest 2 per cent of Americans must rise, while Republicans say they will not agree to any increase. They are eager to rein in health spending, which is projected to increase dramatically over the coming decade. – (Reuters)