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Obama needs to step up and make nice with Republicans

Updated: December 12, 2012 6:35AM

Preventing $500 billion in tax increases and $1.2 trillion in spending cuts from pushing the nation over the “fiscal cliff” into the abyss of another recession will require President Barack Obama to do something he never showed any inclination to do in his first term: forge a working relationship with Republicans and be willing to compromise.

Actually, the record is worse than that. Far from trying to build a relationship with GOP leadership on Capitol Hill, Obama seemed loath to even be in their company. Only in the second year of his term did he have a one-on-one session with Senate Minority Leader Mitch McConnell. The key Republican figure in fiscal cliff negotiations is House Speaker John Boehner. But, notes Rep. Aaron Schock (R-Ill.), “In the president’s four years, he has only met with the Speaker of the House less than a dozen times.”

“If you’re going to have a relationship with anyone — whether it’s your business cohort, whether it’s your spouse, or whether it’s a fellow elected official — you’ve got to spend time with them,” says Schock.

President Ronald Reagan is famously remembered for having Democratic House Speaker Tip O’Neill over to the White House for a convivial, relaxing drink. Obama and Boehner are avid golfers and played together once. But given the strained relationship between Obama and Republicans, the Reagan-O’Neill kind of easy, informal get-together seems highly unlikely. “I think the president plays enough golf,” Schock says. “What we need to honestly do is to have substantive, real conversations, not glad-hands for the camera, not have perfunctory meetings.”

The idea is to use a lame duck session of Congress later this month to come up with a plan to extend expiring Bush taxes cuts for a year and hold off deep “sequestration” spending cuts in defense and other government programs to give the White House and Congress time to produce a comprehensive tax-reform, deficit-reducing, entitlement reform package. The Bowles-Simpson deficit commission report offers a blueprint for such an agreement. Schock notes that the House Ways and Means Committee he sits on has had 23 hearings with the Senate Finance Committee and is “very close” to a tax reform agreement along the lines of lowering rates and closing loopholes as the commission recommended. Schock also says the GOP House has detailed proposals on alternatives to sequestration cuts, entitlements and deficit reduction and that Obama should offer up the same.

On Friday Obama said he will host a gathering of leaders from both parties this coming week. He’s held meetings before — most prominently on health-care overhaul — but they turned out to be for the cameras and not to actually incorporate GOP ideas into legislation. And Obama announced the upcoming meeting in a campaign-style event with applauding supporters at the White House. It came across more as political grandstanding intended to pressure Republicans rather than a hand extended in the spirit of compromise.

Obama said he was open to new ideas and compromise — except for one thing. He insists on raising taxes on households earning more than $250,000. To him and liberals, that’s the “wealthy.” To Boehner and conservatives, that’s a strategy that hits small business job creators and investors in a weak economy.

Boehner is open to raising revenues through closing loopholes in the tax code, but he is opposed to raising tax rates. He and House Republicans are in a tough political situation. Obama says he won’t accept an extension of the Bush tax cuts unless it exempts the wealthy. Would House Republicans stand firm against raising taxes on upper-income Americans if that meant letting Bush tax cuts for all Americans expire? I’ll be surprised if taxes at the high end don’t go up at the end of the year.

There’s speculation about a possible compromise: keeping the top rate where it is but cut loopholes for upper income households. Such a compromise would prevent a tax rate hike, Boehner’s priority, but also raise revenue, Obama’s priority.

It’s worth noting that business already faces other increased taxes, new fees, other costs and regulations coming in 2013 from Obamacare, the Democrats’ Dodd-Frank financial regulation law and the Environmental Protection Agency’s hostility to fossil fuels. All business, but especially job-generating small businesses, will face new burdens next year. That doesn’t sound encouraging for the economy — something for Washington to keep in mind as it tries to avoid the fiscal cliff.

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