WASHINGTON -- Democrats and Republicans seized on November's job numbers Friday to press for a compromise on a deficit deal, as Speaker John A. Boehner opened the door slightly to tax rate increases as part of a broad fiscal package.
Boehner, meeting with reporters, declined to rule out a rise in the top income tax rate below the level that President Barack Obama wants, only to reiterate later that his opposition to tax rate increases remained unchanged. That suggested a possibility that though he opposes higher tax rates, they could still end up in a final package, given enough compromise by the White House on spending.
"There are a lot of things that are possible to put the revenue that the president seeks on the table," Boehner said when asked about an increase in the top tax rate short of the 39.6 percent level of the Clinton-era. "But none of it's going to be possible if the president insists on his position, insists on 'my way or the highway.' "
Boehner later released a statement saying: "As I've said many, many, many times: I oppose tax rate increases because tax rate increases cost American jobs. That has not changed, and will not change."
Publicly, neither side indicated progress toward a deal ahead of the end-of-the-month deadline for averting a series of automatic tax increases and spending cuts. But talks continued. Rep. Nancy Pelosi, D-San Francisco, the House Democratic leader, met with Obama for private
Boehner put the onus on the president to make the next move.
The jobs report gave both sides a new talking point to press for compromise. The Labor Department on Friday said the economy added 146,000 jobs last month, and the unemployment rate fell to 7.7 percent from 7.9 percent in October. Those numbers were unexpectedly bright given the impact of Hurricane Sandy and business fears about the potential fiscal crisis next month.
Boehner continued to say that his opposition to allowing the top two rates to rise from 33 percent and 35 percent to 36 percent and 39.6 percent stems from fears of the impact on small businesses that pay ordinary income tax rates, not the corporate tax rate. About 97 percent of small businesses do not turn enough profit to be affected, but Republicans note that more than half of small-business income -- from the most profitable businesses, partnerships and limited liability corporations -- would be hit by the increases.
"The risk the president wants us to take with increases of tax rates will hit many small businesses that create 50 to 70 percent of the jobs in our country," Boehner said. "That's the whole issue."
Pelosi countered that after 33 straight months of gains in private-sector jobs, employment was now threatened by Republican refusal to pass Senate legislation extending Bush-era tax cuts for 98 percent of U.S. households -- but not the top 2 percent.