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Obama plans second-term strategy as House Republicans craft their own Obama aides offer bipartisan approach to looming fiscal cliff crisis
(35 minutes later)
Democrats have warned their opponents in Congress against seeking to wreck Barack Obama's second term by adopting confrontational strategies that risk bringing Washington to a standstill.Democrats have warned their opponents in Congress against seeking to wreck Barack Obama's second term by adopting confrontational strategies that risk bringing Washington to a standstill.
One of Barack Obama's senior advisers, David Axelrod, said it was no longer "business as usual" and the American public did not want to see a return to the kind of deadlock they had witnessed over the last two years.One of Barack Obama's senior advisers, David Axelrod, said it was no longer "business as usual" and the American public did not want to see a return to the kind of deadlock they had witnessed over the last two years.
"If the attitude (of the Republicans) is that nothing happened on Tuesday, that would be unfortunate," Axelrod said in an interview on Wednesday."If the attitude (of the Republicans) is that nothing happened on Tuesday, that would be unfortunate," Axelrod said in an interview on Wednesday.
His words came amid fears of a renewed clash between the Obama administration and the Republican-led House of Representatives over debt and spending, the so-called fiscal cliff, with a 1 January deadline looming.His words came amid fears of a renewed clash between the Obama administration and the Republican-led House of Representatives over debt and spending, the so-called fiscal cliff, with a 1 January deadline looming.
The crisis began to bubble up as Obama spent his first full day back in the White House since the election, laying plans for his second term, including a cabinet reshuffle.The crisis began to bubble up as Obama spent his first full day back in the White House since the election, laying plans for his second term, including a cabinet reshuffle.
The seriousness of the fiscal cliff crisis was underlined by an International Monetary Fund report warning that that failure by Obama and Congress to strike a deal on raising the US debt ceiling could result in the country suffering a "technical default".The seriousness of the fiscal cliff crisis was underlined by an International Monetary Fund report warning that that failure by Obama and Congress to strike a deal on raising the US debt ceiling could result in the country suffering a "technical default".
It cautioned Washington against trying to "kick the can down the road", as the Republicans are suggesting, and outlined the risks to business and consumer confidence from a protracted period of uncertainty.It cautioned Washington against trying to "kick the can down the road", as the Republicans are suggesting, and outlined the risks to business and consumer confidence from a protracted period of uncertainty.
It warned that if the US fell off the fiscal cliff the result would be a "recession with large international spillover".It warned that if the US fell off the fiscal cliff the result would be a "recession with large international spillover".
The nonpartisan Congressional Budget Office (CBO) warned Thursday that going over the fiscal cliff would drive unemployment up from the current 7.9% to 9.1% by the end of 2013 and push the US back into recession. But CBO predicts the US economy would start returning to better growth rates in 2014 and and unemployment would be 5.5% by 2018.
In an updated report the CBO said economic output would drop by 0.5% in 2013 if Congress fails to act. Stopping all the cuts would boost GDP by 0.75%, as would maintaining current tax rates. Doing nothing would add $503bn to the US debt by the end of 2013, rising to $682bn by the end of 2014.
Axelrod, in his interview with MSNBC, was primarily concerned about the looming confrontation with Republicans over the so-called fiscal cliff, the 1 January deadline for resolving the deficit and spending crisis.Axelrod, in his interview with MSNBC, was primarily concerned about the looming confrontation with Republicans over the so-called fiscal cliff, the 1 January deadline for resolving the deficit and spending crisis.
"Hopefully people will read those results and read them as a vote for cooperation and will come to the table," Axelrod said. "And obviously, everyone's going to have to come with an open mind to these discussions.""Hopefully people will read those results and read them as a vote for cooperation and will come to the table," Axelrod said. "And obviously, everyone's going to have to come with an open mind to these discussions."
The Republicans, however, might choose to interpret the election differently: if the electorate had really wanted an end to confrontation they would have voted to give the Democrats a majority in the House as well as the Senate.The Republicans, however, might choose to interpret the election differently: if the electorate had really wanted an end to confrontation they would have voted to give the Democrats a majority in the House as well as the Senate.
The Democrats increased their lead in the 100-seat Senate from 51 to 53 and will receive the support of at least one of the independents. The other is also likely to back the Democrats but has not yet said. The Republicans have dropped to 45 seats.The Democrats increased their lead in the 100-seat Senate from 51 to 53 and will receive the support of at least one of the independents. The other is also likely to back the Democrats but has not yet said. The Republicans have dropped to 45 seats.
While some races are still be called for the 435-seat House, the Republicans have 234, well about the 218 needed for control, to the Democrats' 194.While some races are still be called for the 435-seat House, the Republicans have 234, well about the 218 needed for control, to the Democrats' 194.
The Republican House speaker John Boehner and the Democratic Senate leader Harry Reid both expressed a desire on Wednesday to work together. But neither offered any hint of a compromise.The Republican House speaker John Boehner and the Democratic Senate leader Harry Reid both expressed a desire on Wednesday to work together. But neither offered any hint of a compromise.
One of Obama's former economic advisers, Austan Goolsbee, told CNN he feared there would be one more "death match".One of Obama's former economic advisers, Austan Goolsbee, told CNN he feared there would be one more "death match".
Almost no major legislation has been passed for at least 12 months in the stand-off between congressional Republicans, many of them backed by the Tea Party. In the battles over spending and debt, Washington came close to shutting down.Almost no major legislation has been passed for at least 12 months in the stand-off between congressional Republicans, many of them backed by the Tea Party. In the battles over spending and debt, Washington came close to shutting down.
One of the senior Democrats in the Senate, Charles Schumer, opted to take Boehner's hint of bipartisanhip co-operation at face value. He applauded him for his change of "tone". Republican leaders had seen the "handwriting on the wall".One of the senior Democrats in the Senate, Charles Schumer, opted to take Boehner's hint of bipartisanhip co-operation at face value. He applauded him for his change of "tone". Republican leaders had seen the "handwriting on the wall".
Obama's campaign team held a final conference call with reporters on Thursday afternoon. Asked about priorities for the second term, a senior member of the Obama team, David Plouffe, identified building up the middle-class, taxing the wealthy to bring down the debt and trying again to find a bipartisanship solution to the debt problems. Obama's campaign team held a final conference call with reporters on Thursday afternoon. Asked about priorities for the second term, a senior member of the Obama team, David Plouffe, identified building up the middle-class, taxing the wealthy to bring down the debt and trying again to find a bipartisanship relationship with the Republicans in Congress and elsewhere.
Plouffe indicated that, even though the campaign was over, Obama's huge grassroots network will be maintained. Those grassroots supporters can be activated in support of single issues.Plouffe indicated that, even though the campaign was over, Obama's huge grassroots network will be maintained. Those grassroots supporters can be activated in support of single issues.
Addressing the implication that those lists might be handed over to the next Democratic candidate, say Hillary Clinton, in 2016, he said that handing over a list did not necessarily mean support would be transferred.Addressing the implication that those lists might be handed over to the next Democratic candidate, say Hillary Clinton, in 2016, he said that handing over a list did not necessarily mean support would be transferred.