Can U.S. avert 'fiscal cliff'?

1:53 PM, Nov 8, 2012   |    comments
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Video: What is the fiscal cliff?

Speaker of the House John Boehner and U.S. President Barack Obama (File photo by SAUL LOEB/AFP/Getty Images)

WASHINGTON -- So far, President Obama has nothing on Thursday's public schedule, but we expect to hear from him soon on the so-called "fiscal cliff."

The president is likely to respond to House Speaker John Boehner, R-Ohio, who called Wednesday for cooperation and suggested the GOP might accept new government revenues -- through an overhaul of the tax code -- as part of a deal to reduce the federal debt.

"Mr. President, this is your moment," Boehner said. "Let's challenge ourselves to find the common ground that has eluded us."

Obama campaign adviser David Axelrod said Obama plans to follow through on his pledge to end the George W. Bush tax cuts for Americans earning more than $250,000 a year, and feels bolstered by his election victory.

"Hopefully people will read those results and read them as a vote for cooperation and will come to the table," Axelrod told MSNBC's Morning Joe. "And obviously everyone's going to have to come with an open mind to these discussions.

"But," he added, "if the attitude is that nothing happened on Tuesday, that would be unfortunate."

The White House announced that Obama has spoken to Boehner and other congressional leaders by phone since his re-election Tuesday, seeking a deal to to reduce the federal debt while avoiding the expiration of tax cuts at the end of the year.

"The president reiterated his commitment to finding bipartisan solutions to: reduce our deficit in a balanced way, cut taxes for middle-class families and small businesses and create jobs," said the White House in a statement.

It added: "The president said he believed that the American people sent a message in yesterday's election that leaders in both parties need to put aside their partisan interests and work with common purpose to put the interests of the American people and the American economy first."

The challenge: Obama is a Democrat, the Republicans run the House, and the Democrats run the Senate -- the same set-up for gridlock that has existed the past two years.

But the parties have incentive: The prospect of fiscal calamity at the end of the year.

USA TODAY's Richard Wolf described "the potential crisis that is 54 days away: the expiration of almost every tax cut enacted since 2001, which could raise the average U.S. household's tax burden by $3,500, and the first $110 billion of $1.2 trillion in spending cuts set to occur over 10 years."

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