President Obama and Speaker Boehner Speak Out on Avoiding the Fiscal Cliff

This week’s announcements from President Obama and Republican Speaker of the House John Boehner, regarding how to tackle tax increases were aimed at positioning their stance on the issue, while leaving room for compromise. While there seems to be some of the same old points of contention, there seemed to be less of a sense of combativeness when Obama and Boehner stated their case for compromise.

In a show of further support for compromise, Democratic Representative Steny H. Hoyer of Maryland, made a statement supporting the President’s, saying that, “on Tuesday, the American people made it clear that they support a balanced approach to bring down deficits and set our nation back on a sound fiscal path.”

At stake, if compromise is not reached, are tax increases that will run into the hundreds of billions along with automatic spending cuts that will kick in unless changes are made before year end. The irony of the situation is there doesn’t seem to be any real, substantial differences in the conversation, except that everyone seems to have hung on the subtle wording of the President’s statement.

The fact that he specifically did not say he would fight for higher rates, rather he said he would fight for more revenue generated by taxes on higher income taxpayers, seemed significant to Republicans. This stems from the fact that a bone of contention has been whether to raise rates or eliminate loopholes to achieve the same goal. The two strategies are most certainly not interchangeable, which is the crux of the argument, but that Obama has left more room for negotiation is significant.

One of the things that cannot be lost in the conversation is that much of the bickering has less to do with the final outcome and more to do with the perception of who wins the argument. The partisan combat that has gone on for Obama’s entire first term has been largely impacted by jockeying for political capital and favorable perception in the eyes of constituents, and both sides have been extremely hesitant to make any moves that could be seen as weakness or losing ground.

If both men are to be taken at their word, a couple of statements are key indicators that we should be optimistic about averting the fiscal cliff. President Obama clearly stated, “I’m not wedded to every detail of my plan. I’m open to compromise.” Similarly, Speaker Boehner announced with a sense of authority, “When the president and I have been able to come to an agreement, there has been no problem getting it passed here in the House.”

Although Boehner spoke about compromise, he still made it clear that he wanted to be seen as leading the way, saying, “I think it’s important for us to come to an agreement with the president. But this is his opportunity to lead.” Even with announcements of a willingness to compromise it is clear political posturing is ever present and we can’t take for granted there will be a bipartisan solution reached before the end of the year. There does, however, seem to be reason for new optimism.