DEMOCRATS fired the opening shots yesterday in negotiations to stop America falling off the "fiscal cliff", warning Republicans of the need to accept fresh compromises following Barack Obama's re-election.
As the shadowboxing began over a deal to fix America's finances, both sides began to offer suggestions over how to break the ideological deadlock in Washington that has blocked a resolution on tackling the $16 trillion (€12.54tn) national debt.
"We want the doors to be open and we want people to walk through both ways," he said, adding that Mr Obama was "willing to work with people from whatever political party in order to move things forward".
Failure to agree a deal by the end of the year would induce the fiscal cliff -- tax increases and spending cuts worth $600bn (€470.58bn) -- that would risk causing a severe downturn in America's already sluggish economic recovery. A longer-term deal would seek to achieve around $4tn (€313tn) in deficit reduction over 10 years.
Republican leaders have not ruled out accepting effective tax increases -- an ideological red line for many in the party -- but made clear that Democrats would also have to accept cuts to the welfare programmes that the left views as sacrosanct.
"Because the American people expect us to find common ground, we are willing to accept some additional revenues, via tax reform," said John Boehner, the Republican House speaker who led last year's failed attempt to deliver a "grand bargain" on taxes and spending.
"But the American people also expect us to solve the problem. And for that reason, in order to garner Republican support for new revenues, the president must be willing to reduce spending and shore up the entitlement programmes that are the primary drivers of our debt."
In a sign of the uncertainty surrounding negotiations, his remarks were read by some as an olive branch, but by others as a signal that Republicans were still intending to drive a hard bargain, notwithstanding their defeat in the White House race.
Senior Democrats also called on business leaders to pressure Republicans to compromise and to help strengthen Mr Boehner's negotiating position within his own party as he comes under pressure not to compromise.
"The speaker's going to need some help in bringing his conference to a good position on revenues and I am very hopeful that help can come from the business community," said Chuck Schumer, the New York senator and an ally of Barack Obama. "I think that privately he's seen the handwriting on the wall and it makes me very hopeful that we can do something big in the next month and a half," he said of Mr Boehner's statement. (© Daily Telegraph, London)