Congress may be ready to negotiate on taxes, spending

Washington • Congress' rank and file — which will decide whether the nation avoids plummeting off a fiscal cliff in less than seven weeks — is showing a new willingness to negotiate and compromise, a message their leaders will carry Friday to President Barack Obama.

But they will also warn in the first post-election White House talks aimed at crafting an agreement that those lawmakers have a shared history that has to be overcome. For the past two years, Washington has been paralyzed by partisanship, and the scars of the battles are still raw.

What's different now is that lawmakers heard the message from voters last week: Stop bickering and get the economy moving again. And don't wait to do something until hours before the Bush-era tax cuts expire Dec. 31 and automatic spending cuts take effect two days later.

Senators and members of the House of Representatives are suggesting almost everything is negotiable — spending cuts, tax rates, Medicare, Medicaid — and there's widespread agreement any deal has to be a combination of cuts in spending and increases in tax revenues.

Even the most contentious point, the top tax rates, appears to be on the table.

"People are really eager to get an agreement. I've rarely seen a mood like it," said Senate Budget Committee Chairman Kent Conrad, D-N.D.

In the week and half since the election, most leaders, including Obama, have sent subtle but meaningful signals that they're willing to soften their positions.

At the president's news conference Wednesday, he suggested he might be willing to bargain on his oft-stated goal of raising the top income tax rate from 35 percent to 39.6 percent for high incomes.

"With respect to the tax rates, I just want to emphasize I am open to new ideas," he said, and White House officials explained he would consider a top rate of 37 percent or 38 percent, presumably as long as he also limited deductions so those people still would pay more taxes.

Republicans welcome the change, but they also warn that despite the calmer mood, "that doesn't mean there's wholesale desire to raise taxes," Sen. Mike Crapo, R-Idaho, said.