Key fig­ures op­ti­mistic deal will be reached

Cliff

Austin American-Statesman - - THE SECOND FRONT - Con­tin­ued from A

Boehner’s of­fice is­sued iden­ti­cal state­ments af­ter­ward say­ing, “The lines of com­mu­ni­ca­tion re­main open.” On Fri­day, Boehner told re­porters that an­other week had been wasted, with just three weeks left for law­mak­ers to avert a fis­cal cri­sis.

Also on Fri­day, Obama spoke pri­vately with con­gres­sional Demo­cratic lead­ers, Sen. Harry Reid, the Se­nate ma­jor­ity leader, and Rep. Nancy Pelosi, the House mi­nor­ity leader, pre­sum­ably to gauge what po­si­tions the Democrats in Congress could sup­port.

Repub­li­cans have been

The White House and House Speaker John Boehner’s of­fice is­sued iden­ti­cal state­ments Sun­day say­ing lines of com­mu­ni­ca­tion re­main open.

in­sis­tent that the Obama ad­min­is­tra­tion agree to sub­stan­tial sav­ings in en­ti­tle­ment pro­grams as the two sides ne­go­ti­ate how to nar­row the coun­try’s huge deficits. But Corker is part of a group of Repub­li­cans who say the party ul­ti­mately will have to yield to the Obama de­mand of higher tax rates for top earn­ers, po­ten­tially re­turn­ing to the lev­els that pre­vailed un­der Pres­i­dent Bill Clin­ton.

That group of Repub- li­cans, he said on Fox, is be­gin­ning to re­al­ize “that we don’t have a lot of cards as it re­lates to the tax is­sue be­fore yearend” — but that a taxrate con­ces­sion could be con­verted into a tac­ti­cal ad­van­tage.

Corker’s com­ments came as key fig­ures on net­work news pro­grams mixed cau­tious words of op­ti­mism over the fis­cal-cri­sis ne­go­ti­a­tions be­tween the White House and con­gres­sional Repub­li­cans with dire warn­ings about what a fail­ure to act might bring.

Chris­tine La­garde, the man­ag­ing di­rec­tor of the In­ter­na­tional Mon­e­tary Fund, warned that such a fail­ure was the gravest threat now fac­ing the still-frag­ile U.S. econ­omy — greater than the Euro­pean debt cri­sis or any un­cer­tainty in China.

“It would re­sult in the stock mar­ket really tak­ing a hit,” La­garde said on the CNN pro­gram “State of the Union.”

She called for a “balanced” agree­ment of both rev­enue in­creases and spend­ing cuts, and of­fered a ten­ta­tive pre­dic­tion that what she called Amer­i­can “prag­ma­tism” would pre­vail and avert the worst out­come.

Sen. Charles Schumer of New York, the No. 3 Se­nate Demo­crat, also pre­dicted that an agree­ment would be reached. Per­haps more op­ti­misti­cally, he said he thought it would in­clude a stip­u­la­tion that the na­tional debt ceil­ing be raised with­out fur­ther drama when it comes due in late Jan­uary or Fe­bru­ary.

“I be­lieve, frankly, our Repub­li­can col­leagues have learned that to say the government is not go­ing to pay its debts and hold it up for some­thing else is bad sub­stance and bad pol­i­tics,” he said on “Fox News Sun­day.” “I don’t think they’ll pre­vail on that.”

Corker said he agreed with Schumer that a deal would be reached and “we’re not go­ing to go over the fis­cal cliff.” But he sug­gested that Repub­li­cans would not so eas­ily give up on the debt-ceil­ing lever­age. “Repub­li­cans know that they have the debt ceil­ing that’s coming up right around the cor­ner and the lever­age is go­ing to shift,” he said.

A Se­nate vote is re­quired to raise the na­tion’s statu­tory bor­row­ing limit.

One au­thor of the much-dis­puted Simp­sonBowles debt-re­duc­tion plan, former Sen. Alan Simp­son, R-Wyo., ex­pressed some op­ti­mism Sun­day.

He said he thought a deal would be reached but that if it were too nar­row — if it failed to make deep enough cuts in health care spend­ing or other big so­cial pro­grams — the econ­omy, and Amer­i­cans, would still suf­fer.

“I’m an op­ti­mist,” he said on the CBS pro­gram “Face the Na­tion.” “I think they’ll do some­thing, but if they do small ball, that won’t work. The mar­kets aren’t go­ing to lis­ten to that.”

His part­ner in the plan, former Clin­ton White House Chief of Staff Ersk­ine Bowles, warned that a fail­ure in the on­go­ing ne­go­ti­a­tions would be “dis­as­trous.” But he said he was some­what more up­beat than he was a week ago, be­cause of signs of move­ment from both sides.

Af­ter weeks of what he called “kabuki the­ater,” the two sides have “started to tango now,” Bowles said, also on CBS. Asked if a deal could be reached by the end of the year, Bowles replied, “They ab­so­lutely can do it. If they don’t do it, shame on them.”

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