'Apples, Oranges and Bananas Don't Mate': The President's Closed-Door Meeting with Congressional Leaders

President Obama started the meeting with the bipartisan congressional leadership this morning by telling Republicans he hasn’t “reached out as effectively as I should have. Let’s have honest cooperation, not just photo ops.”

“It was a hard-fought election,” he told the eight congressional leaders, according to multiple sources present, “but the election’s over and it’s time for us to work together.”

He congratulated incoming Speaker and current House GOP Leader John Boehner, R-Oh., and soon to be House Majority Leader Eric Cantor, R-Va., the current House GOP Whip.

“We have a responsibility, jointly, to grow the economy,” he said. The president noted that while Democrats got “shellacked” in the midterms the American people aren’t happy in general with how Washington is working.

They sat in the Roosevelt Room of the West Wing: the president, Boehner, Cantor, Vice President Biden, Secretary of the Treasury Tim Geithner, Office of Management and Budget Director Jack Lew, outgoing Speaker Nancy Pelosi, D-Ca., current House Majority Leader Steny Hoyer, D-MD, Senate Majority Leader Harry Reid, D-Nev., Senate GOP Leader Mitch McConnell, R-Kentucky, Assistant Senate Majority Leader Dick Durbin, D-Il., and Senate GOP Whip Jon Kyl, R-Ariz.

Boehner: “I’m a Transparent Guy”

They went around the room.

Speaker Pelosi congratulated Boehner and Cantor, and said there are two main items the American people want Congress to focus on: creating jobs and reducing the deficit. She also pushed for Congress to extend Unemployment Insurance, set to expire at midnight tonight.

Boehner had a slightly different take, saying the message from the American people was for Congress to focus on jobs and spending.

“I’m a transparent guy,” said Leader Boehner, suggesting that the group needed to spend more time together to get to know each other so they can work better together.

Said Hoyer: “All our poll numbers are low. We have to show courage. We will have to say no to some people.” He noted that with 60,000 federal employees living in his Maryland district, the president’s proposed pay freeze for civilian federal employees isn’t popular, but everyone needs to be part of the solution. He suggested the military should have been part of the freeze as well.

Cantor thanked the president for the proposed pay freeze and the spirit in which he welcomed them all. Republicans are looking for common ground on deficit reduction and reducing spending and the federal bureaucracy, he said, as well as creating jobs and extending the Bush tax cuts.

Reid: “I Don’t Have a Magic Wand”

Senate Majority Leader Reid said that everyone needs to be reasonable about what’s possible during the lame duck session.

“I don’t have a magic wand,” Reid said. “The Senate is very different” than the House.

“We can’t waste time,” said Reid, saying the Senate can move quickly on the DREAM Act, health care for 9/11 responders, and funding the government.

“The American people prefer periods of divided government,” said McConnell. “Sometimes divided government can be productive.” He said priorities included extending the Bush tax cuts and figuring out how to fund the government – funding runs out on Friday.

Long term economic growth needs to be our goal, said Kyl. The Senate GOP Whip, who has been the chief obstacle in Senate ratification of the START nuclear disarmament treaty with Russia, said the sooner the Senate gets to an agreement on the Bush tax cuts, the more time we will have for START.

Geithner: Europe Is “A Mess”

Offering a status report on the economy, Secretary Geither said that the economy is growing at about a rate of 2-2.5% but it’s still not very strong. The question is whether job growth will be enough. He acknowledged some risk of a double-dip recession, but said that was largely because Europe is currently “a mess.”

National Economic Council director Larry Summers said that private spending is sluggish, with capacity exceeding demand. Unemployment claims are dropping, he said. The last jobs report was not terrific, but was better than we have seen.

The conversation also focused on the Bush tax cuts.

“I would love it to not tax anyone,” the president said, suggesting that deficit reduction and economic growth and taxes may not work well if tackled at the same time. If nothing too drastic is done as the economy comes out of recession in 2012, tougher debt reduction measures can be taken in 2013, followed by a more aggressive approach with entitlement spending.

He pushed for Bush tax cuts for those earning under $200,000 a year/$250,000 per family be extended, and suggested that if Republicans disagree they should “decouple” Bush tax cuts for wealthier Americans from those for those in lower brackets, after which Congress can debate tax cuts for those with higher incomes.

“That way we can achieve 98% of what we agree on,” the president proposed, adding the other tax cuts that he supports extending including the AMT and college tax credit. He pushed an extension of Unemployment Insurance.

The president then suggested that the House and Senate Democrats and Republicans each assign one representative to begin negotiating tax cuts with Geithner and Lew.

“We need to extend the estate tax cuts,” said Kyl.

The president noted that he forgot to mention the Medicare “Doc Fix.”

Of START, the president said later in the meeting: “this needs to get done.”

He noted that the UN Security Council would not have gone along with sanctions against Iran for its nuclear program if the Russians hadn’t come along. The challenge is to turn Russia more towards the West.

“This is worth doing on its merits,” the president said, “and it’s absolutely vital to our national interest.”

At the recent NATO summit, plans for missile defense in Europe sailed through, a notion that was once very controversial, the president said, this is all part of a larger strategy with Medvedev and Russia,

Kyl insisted that no politics was at play with his position on the treaty, he just contends that it needs to be amended, which means that priorities for the lame duck session have to be established. The Arizonan insisted that he’d never said START couldn’t be completed or that it wouldn’t ultimately pass, just that he questioned whether there was enough time to do it.

Pelosi: Apples, Oranges and Bananas Don’t Mate

On the debt commission, President Obama urged the group to begin discussing what each others’ bottom lines are and to set up a process for implementation of any agreed-upon recommendation.

McConnell said the Debt Commission has issued some serious recommendations, some of which can be possibly used for a jumping off point.

Speaker Pelosi said the issues of Social Security solvency and balancing the budget through revenue and spending cuts should be kept separate.“Don’t raise the Social Security retirement age in order to give a tax cut to the rich,” she said. “Apples, oranges, and bananas don't mate.”

It is fair to say that not everyone in the room understood the point she was trying to make.

The Vice President, quoting Bob Dole, said that when it came to reducing the debt, “we all need to step in the row boat together.”

Durbin noted that he’s on the debt commission, and expressed hope that 14 out of 18 members agree on moving forward on some recommendations. It is a challenge he noted to both grow the economy and balance the budget.

The group later dispatched to the dining room off the Oval Office, shedding all staffers – including Geithner, Lew and Summers – to talk more candidly. President Obama said the group should meet again after the New Year. Reid said he’d never been to Camp David, so the president suggested that the meeting be held there.

-- Jake Tapper

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