New term, old issue: Fiscal cliff looms

JACKIE CALMES & PETER BAKER

Newly re-elected, President Obama moved quickly on Wednesday 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 soon after Senator Harry Reid, leader of a Democratic Senate majority that made unexpected gains, extended his own olive branch to the opposition. While saying 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 on Wednesday. "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."

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.

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