U.S. House Speaker John Boehner voiced optimism that Republicans could broker a deal with the White House to avoid year-end austerity measures, saying on Wednesday that Republicans were willing to raise revenues if Democrats agreed to spending cuts.
"I am optimistic that we can continue to work together to avert this crisis sooner rather than later," the Ohio Republican told reporters. "We [Republicans] put revenue on the table as long as it is accompanied by serious spending cuts to avert this crisis."
Mandated $600-billion (U.S.) in tax increases and spending cuts will start going into effect early next year if the Obama administration and lawmakers cannot agree on how to change the law. Top policy makers say these austerity measures could topple the U.S. economy back into a recession.
Although the White House and top congressional leaders have started negotiating, Democrats and Republicans are deeply divided on how to reduce the trillion-dollar-plus U.S. budget deficit and put the nation on a sound fiscal path.
"You're not going to grow the economy if you raise tax rates on the top two rates," Mr. Boehner said. "We're willing to put revenue on the table, as long as we're not raising rates."
President Barack Obama, who was re-elected this month after campaigning to make the wealthy pay their fair share, wants to raise taxes on the country's highest income earners. A handful of powerful corporate chief executive officers, including Goldman Sachs's Lloyd Blankfein, have come out in support of higher taxes.
Mr. Blankfein and scores of business executives have been warning Washington not to go over the "fiscal cliff" and let the austerity measures kick in and are meeting with lawmakers in Washington on Wednesday.
Democrat Erskine Bowles, who along with former Republican senator Alan Simpson crafted a plan to slash the budget deficit at Mr. Obama's request, said the business community's involvement in the fiscal debate is significant.
"It's one thing for me to talk about the effect on the rate of growth, could be as much as 4 per cent, enough to put the U.S. back into recession," Mr. Bowles told reporters as he arrived for the meeting with the CEOs and Republicans.
"For [lawmakers] to hear that these companies are already slowing their hiring down . .. for them to hear individually from the business leader themselves, I think, makes it real that we really got to do something," Mr. Bowles said.