'Fiscal cliff' looming, Obama to spell out agenda

In a video released by the Obama campaign, a tearful president thanks his campaign workers before he sets off to tackle second-term issues including taxes, the debt and replacing as many as five high profile secretaries in his Cabinet. NBC's Chuck Todd reports. By Tom Curry His hand strengthened by Tuesday's re-election but facing a looming deadline to avoid $64 billion in automatic spending cuts, President Barack Obama was to spell out his second-term agenda in a Friday afternoon statement at the White House. Obama is expected to use Friday's event to give some indication of how he is prepared to work with Senate Majority Leader Harry Reid and House Speaker John Boehner in the next seven weeks to avert the spending cuts that will take effect in January if a deal cannot be reached. Those cuts are mandated by the Budget Control Act that Obama signed into law last year. He was not expected to take any questions. Watch live: President Obama's White House statement at 1 p.m. ET As part of an agreement to avoid what is known as the "fiscal cliff," Obama and congressional leaders must also agree how much taxes ought to go up and which taxpayers will be hit by tax hikes. According to the Congressional Budget Office taxes will increase by more than $400 billion in 2013 under current law. Budget analysts call the combination of automatic spending cuts and tax increases set to occur at year end the fiscal cliff. Adding to the pressure to design a deal that would avoid the fiscal cliff, the CBO on Thursday repeated its previous warnings that the spending cuts, combined with scheduled tax increases, would probably cause a recession next year. Specifically the CBO said in its Thursday report that the tax increases and spending cuts would cause the unemployment rate to rise to 9.1 percent by the fourth quarter of 2013, compared to a jobless rate of 7.9 percent in October. The tax increases would raise the average tax burden by almost $3,500 per taxpayer in 2013, according to According to the Tax Policy Center. This would happen because the current income tax rates and some tax breaks are scheduled to expire or shrink on Dec. 31. Among them, the popular middle-class tax break, a $1,000-per-child tax credit for each child age 17 and younger, would be cut in half.  After re-election, House Speaker John Boehner says he believes the House GOP and President Obama will find common ground "to avoid the fiscal cliff." Boehner is also talking less harshly about the president's signature health care law. In addition, starting on Jan. 1, the Affordable Care Act imposes a $20 billion tax increase on people with incomes above $200,000, or $250,000 for joint filers.  Adding to the tax increase, a temporary reduction in the Social Security payroll tax is set to expire at year end. The president has argued for raising taxes on Americans with incomes over $200,000 and over $250,000 for married couples who file jointly. But the exact mix of tax increases and who must pay them will be the subject of intense negotiations between the president and congressional leaders over the next few weeks. Before February Obama and congressional leaders must also work out a deal to raise the federal government's borrowing limit. In a press briefing Friday morning, Boehner said he is willing to work with Obama and congressional Democrats, but remains opposed to raising the tax rates for any Americans. "The members of our majority understand how important it is to avert the fiscal cliff," he said. He sketched out his opening bargaining position: Extend current tax rates for one year, allowing Congress time to entirely redesign the tax code, eliminating some tax deductions and preferences – and pass "entitlement reform." He made the case that "by lowering rates and cleaning up the tax code we know that we're going to get more economic growth. It'll bring jobs back to America – it'll bring more revenue." The revenue question is crucial: Because the U.S. economy remains anemic, federal revenue has still not reached its pre-recession peak. While revenue increased for third consecutive year in fiscal 2012, it is still 5 percent below the 2007 peak. Boehner warned about the spending pressure from growing entitlement programs: "We're spending a trillion dollars more than what we take in. You can't continue to do that. This is year two of a 25-year demographic bubble. …. Ten thousand Baby Boomers like me retiring every day." He said "everything on the revenue side and on the spending side has to be looked at."  "This is an opportunity for the president to lead," Boehner said. "This is his moment to engage the Congress and work toward a solution that can pass both chambers." Obama and the Democrats go into the bargaining over fiscal policy with voters having given them a stronger bargaining position. In Tuesday's balloting, Democrats scored a net gain at least six seats in the House, which was better than most analysts had predicted, and they exceeded expectations by gaining two seats in the Senate, dashing GOP hopes for a takeover of the upper chamber. But Boehner said Tuesday that "The American people re-elected a Republican majority (in the House) and I'm proud of the fact that our team in a very difficult year was able to maintain our majority." But showing that the election outcome had altered his strategy, Boehner signaled a retreat Thursday from Republican calls for total repeal of the Affordable Care Act. "I think the election changes that," Boehner said in an interview with ABC News. "It's pretty clear that the president was re-elected, Obamacare is the law of the land." But he added, "I think there are parts of the healthcare law that are going to be very difficult to implement. And very expensive. And as the time when we're trying to find a way to create a path toward a balanced budget everything has to be on the table." The speaker may try to make rescinding parts of the law an ingredient of any deal he tries to strike with Obama and Reid. Another issue on which Republican opposition to Obama may have been weakened by Tuesday's outcome is immigration, with some congressional Republicans and conservative pundits now sending signals that the GOP must come to terms with Democrats over a comprehensive proposal that would include a provision making it possible for younger illegal immigrants brought to the United States by their parents to remain in the United States legally. In Tuesday's elections, exit poll interviews indicated that more than seven out of 10 Latino voters nationwide backed Obama. In states such as Colorado, where three out of four Latino voters supported Obama and Latino voters accounted for 14 percent of the electorate, they gave the president his victory. Obama won Colorado by a margin of about 117,000 votes out of more than 2.4 million total votes cast.