WASHINGTON -- President Barack Obama heads for familiar campaign ground later today, an auto plant in Michigan, to press his case for tax hikes on the wealthy.
Obama's trip, part of an aggressive White House public relations effort, comes a day after a Sunday meeting with the Republican leader of the House of Representatives raised hopes of progress in talks to avert the "fiscal cliff" - automatic tax increases and spending cuts that could deliver a jolt to the economy if Congress fails to stop them by the end of the year.
The two sides declined to provide details about the meeting between Obama and Ohio Republican House Speaker John Boehner, though the fact that they were communicating face-to-face was taken as a hopeful sign.
"I'm a little more encouraged than I would have been if you had asked me about it a week ago," Erskine Bowles, co-chairman of the so-called Bowles-Simpson deficit reduction commission, said on CBS' Face the Nation Sunday.
"You know, we were going through the Kabuki theater, you know, one side making an offer and the other side rejecting it. And that's natural in any deal," said Bowles.
But "they've started to tango now. And, you know, any time you have two guys in there tangoing you have a chance to get it done," he said.
The stock markets have calmed recently after a series of wild swings, when nearly every utterance from a politician about the looming budget crisis caused wild swings in stock prices.
The S&P 500 index has nearly retraced the 5.3 percent slide it suffered in the first seven sessions after the November 6 presidential election.
"The sentiment has definitely changed," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co in New York. "The market has become somewhat desensitized to headlines out of Washington because the fear of the economy hitting a wall in 2013 if we don't get a deal done has diminished."
Obama's visit to Daimler Detroit Diesel in Redford, Michigan, where he will tour the plant and speak to workers, is scheduled for 1 p.m.
Obama, Boehner meet
President Barack Obama and House Speaker John Boehner met Sunday at the White House to discuss the ongoing negotiations over the impending "fiscal cliff," the first meeting between just the two leaders since they both won re-election.
Spokesmen for both Obama and Boehner said they agreed to not release details of the conversation, but emphasized that the lines of communication remain open.
The meeting comes as the White House and Congress try to break an impasse over finding a way to stop a combination of automatic tax increases and spending cuts scheduled to kick in at the beginning of next year.
Obama met in November with Boehner, as well as Senate Majority Leader Harry Reid and House Minority Leader Nancy Pelosi. The president spoke by telephone with Reid and in person with Pelosi on Friday. The president is traveling to Redford, Mich., on Monday to promote his agenda in a speech to workers at an engine factory; auto workers helped Obama win Michigan in last month's election.
Obama has been pushing higher tax rates on the wealthiest Americans as one way to reduce the deficit — a position Boehner and other House Republicans have been steadfastly against. Republicans are demanding steeper cuts in costly government entitlement programs like Medicare and Social Security.
One GOP senator said Sunday that Senate Republicans would probably agree to higher tax rates on the wealthiest Americans if it meant getting a chance to overhaul entitlement programs.
The comments by Bob Corker of Tennessee — a fiscal conservative who has been gaining stature in the Senate as a pragmatic deal broker — puts new pressure on Boehner and other Republican leaders to rethink their long-held assertion that even the very rich shouldn't see their rates go up next year. GOP leaders have argued that the revenue gained by hiking the top two tax rates would be trivial to the deficit, and that any tax hike hurts job creation.
But Corker said insisting on that red line — especially since Obama won re-election after campaigning on raising tax rates on the wealthy — might not be wise.
"There is a growing group of folks looking at this and realizing that we don't have a lot of cards as it relates to the tax issue before year end," Corker told "Fox News Sunday."
If Republicans agree to Obama's plan to increase rates on the top 2 percent of Americans, Corker added, "the focus then shifts to entitlements and maybe it puts us in a place where we actually can do something that really saves the nation."
Another hurdle in talks
Besides getting tax hikes through the Republican-dominated House, Corker's proposal faces another hurdle: Democrats haven't been receptive to GOP proposals on the entitlement programs. Senate Democratic Whip Dick Durbin, D-Ill., on Sunday was skeptical about proposals to increase the eligibility age for Medicare from 65 to 67. He said he doesn't see Congress addressing the complicated issue of Medicare overhaul in the three weeks remaining before the end of the year.
"I just don't think we can do it in a matter of days here before the end of the year," Durbin said. "We need to address that in a thoughtful way through the committee structure after the first of the year."
And hard-line fiscal conservatives in the House are holding fast to their position.
"No Republican wants to vote for a rate tax increase," said Rep. Jeb Hensarling, R-Texas, chairman of the House Republican Conference.
Added Rep. Marsha Blackburn, R-Tenn.: "I'm not sure there is support for the rate hikes. There is support for revenue by cleaning up the code."
Still, at least one House Republican has said there is another way. Rep. Tom Cole, of Oklahoma, has said Obama and Boehner should agree not to raise tax rates on the majority of Americans and negotiate the rates for top earners later. Cole said Sunday that most House Republicans would vote for that approach because it doesn't include a rate hike.
"You know, it's not waving a white flag to recognize political reality," Cole said.
Sen. Tom Coburn, R-Okla., already has said he could support higher tax rates on upper incomes as part of a comprehensive plan to cut the federal deficit.
When asked Sunday what it would take to sign on to a tax rate increase, Coburn echoed Corker's comments by responding, "Significant entitlement reform." He quickly added, however, that he has estimated that such a tax rate increase would only affect about 7 percent of the deficit.
"Will I accept a tax increase as a part of a deal to actually solve our problems? Yes," Coburn said. "But the president's negotiating with the wrong people. He needs to be negotiating with our bondholders in China, because if we don't put a credible plan on the discussion, ultimately, we all lose."
Obama's plan would raise $1.6 trillion in revenue over 10 years, partly by letting decade-old tax cuts on the country's highest earners expire at the end of the year. He would continue those Bush-era tax cuts for everyone except individuals earning more than $200,000 and couples making above $250,000. The highest rates on top-paid Americans would rise from 33 percent and 35 percent to 36 percent and 39.6 percent.
Boehner has offered $800 billion in new revenues to be raised by reducing or eliminating unspecified tax breaks on upper-income people. The Republican plan would cut spending by $1.4 trillion, including by trimming annual increases in Social Security payments and raising the eligibility age for Medicare.
Hensarling and Coburn spoke on ABC's "This Week." Blackburn and Cole spoke on CNN's "State of the Union." Durbin spoke on NBC's "Meet the Press."
Associated Press and Reuters contributed
