Big disconnect as clock ticks on ‘fiscal cliff’

Associated Press

WASHINGTON

Republicans’ newfound willingness to consider tax increases to avert the “fiscal cliff” comes with a significant caveat: larger cuts than Democrats seem willing to consider to benefit programs such as Medicare, Medicaid and the president’s health care overhaul.

The disconnect on benefit programs, coupled with an impasse between Republicans and the White House over raising tax rates on upper-bracket earners, paints a bleak picture as the clock ticks toward a year-end fiscal debacle of automatic spending increases and harsh cuts to the Pentagon and domestic programs.

Democrats emboldened by the election are moving in the opposite direction from the GOP on curbing spending, refusing to look at cuts that were on the bargaining table just last year.

Those include any changes to Social Security, even though President Barack Obama was willing back then to consider cuts in future benefits through lower cost-of-living increases. Obama also considered raising the eligibility age for Medicare, an idea that most Democrats oppose.

“I haven’t seen any suggestions on what they’re going to do on spending,” Sen. Orrin Hatch, R-Utah, said Tuesday. “There’s a certain cockiness that I’ve seen that is really astounding to me since we’re basically in the same position we were before.”

At the White House, Obama met with a group of small-business owners. Participants described the hourlong meeting as a listening session for Obama, with the business owners urging him to reach an agreement.

“They had one message for the president, which is they need certainty. Please get this deal done as soon as possible,” said Small Business Administration head Karen Mills.

Obama planned to meet today with more than a dozen leaders from large corporations, including Lloyd Blankfein of Goldman Sachs, Marissa Mayer of Yahoo!, Brian Roberts of Comcast and Arne Sorenson of Marriott.

Obama hits the road Friday, visiting a Pennsylvania toy factory and broadcasting his case to extend current tax rates for all but those families making more than $250,000 a year.