While President Obama launched a campaign Wednesday to take his debt-reduction plan to the American people, the former co-chairman of his debt commission expressed pessimism that Washington will avoid going over the "fiscal cliff" at the end of the year.
"I think the probability is we're going over the cliff," Erskine Bowles told reporters at a roundtable hosted by The Christian Science Monitor.
To do so would be "insane," Bowles said. But he forecast only a one-third probability that Obama and a divided Congress can agree on a budget deal that raises revenue and cuts spending. "One without the other won't work," he said.
Obama and Congress are looking to head off the fiscal cliff, a series of tax hikes and budget cuts that kick in next year if the parties can't reach an agreement. Obama wants to extend the George W. Bush-era tax cuts for the middle class but eliminate them for filers who make more than $250,000 a year; Republicans oppose any increase in tax rates, saying they will stunt economic growth.
Obama spoke Wednesday with an invited group of Americans who would see their taxes go up if the White House and congressional Republicans are unable to strike a deal. "Let's approach this problem with the middle class in mind," he said.
Noting that both parties agree on extending tax cuts for the middle class, Obama called on Congress for an immediate agreement on that issue while they negotiate the rest of an overall agreement.
House Speaker John Boehner, R-Ohio, said Republicans want to work with Obama, but said the president has spent more time talking about tax hikes than spending cuts. Boehner said the GOP is willing to increase government revenue, but through the elimination of tax breaks rather than raising tax rates.
"Republicans are willing to put revenue on the table, but it's time for the president and Democrats to get serious about the spending problem that our country has," Boehner said.
Bowles said he was frustrated by the slow pace of the negotiations, the ongoing differences between the two parties and a dwindling legislative calendar.
Former senator Alan Simpson, R-Wyo., who chaired Obama's debt commission with Bowles, said at the roundtable that he was discouraged by the cynicism in Washington and the role of outside interest groups.
It would take political courage, he said, for lawmakers to come to an agreement that threatens to anger powerful outside interests. "As long as we are in the thrall of (anti-tax advocate) Grover Norquist and the AARP, it's going to be a rough, long haul," he said.
Bowles also met Wednesday with corporate executives and House Republican leaders to continue his efforts to reach a deal.
"I'm for getting a deal done and getting it done today," he said. "I'm hopeful but, boy, I wouldn't put me down as optimistic."
Goldman Sachs CEO Lloyd Blankfein, who attended the meeting, offered a more optimistic outlook for a deal afterward, but he echoed Bowles' view that both parties will need to challenge orthodoxy.
"Both sides need to compromise. It has to be a balanced approach. This is not a question of one side is right and one side is wrong, good versus evil. Both sides are trying to do what's in the best interest of the country as each of them see it," he said. "People have to yield on things that they are quite convicted about."
Most Popular Stories
- Businesses, Investors Pressing for Green Policy
- 'The Voice' Sounds Different This Season
- NSHMBA to Rebrand With New Name, Logo
- Lower Used-Car Prices Roil the Auto Industry
- Chrysler and Google Launch Virtual Plant Tour
- Investors Fret Yahoo's Future, Stock Dips
- Perry Wants to Skip Court for Foreign Trip
- Liberty Power Helps USHCC Go Green
- Hispanic Designer Honored As Rising Star
- Porn Lovers Get a New Search Engine