Obama, congressional leaders launch tax-cut talks

President Obama and congressional leaders called their first meeting since the midterm elections a frank but productive initial discussion of the issues before them, each expressing hope that common ground could be reached on the thorniest debate: the fate of tax rates set to expire next month.

To that end, Obama announced that Treasury Secretary Timothy F. Geithner and Jack Lew, his budget director, would immediately begin working with representatives from both parties in Congress in an attempt to broker a compromise on the matter by year’s end.

Speaking to reporters after the meeting Tuesday, Obama said there was “broad agreement” that they need to resolve the tax-cut issue before the rates expire, but he outlined the differences and stopped short of saying he was confident they would do so.

He said he was hopeful Geithner and Lew could “break through the logjam.”

“There must be some sensible common ground,” Obama said.

Democrats continue to believe that tax rates for higher earners should be allowed to expire, Obama said.

Meanwhile, Rep. John Boehner of Ohio, the likely speaker of the House in the new Congress, said Republicans “made the point that stopping all the looming tax hikes and cutting spending would, in fact, create jobs and get the economy moving again.”

“So we’re looking forward to the conversation with the White House over extending all of the current rates, and I remain optimistic,” Boehner said, speaking with other Republican leaders back on Capitol Hill.

Beyond the specifics of the tax debate, both parties offered traditionally vague pleasantries about working together.

House GOP Whip Eric Cantor of Virginia said he appreciated that president acknowledged that he had not reached across the aisle often enough in the last two years.

“I think we all agree there’s no particular reason why we can’t find areas of agreement and do some important things for the American people over the next two years,” said Senate Minority Leader Mitch McConnell (R-Ky.).

Boehner laced his praise with skepticism.

“We had a very nice meeting together; of course, we’ve had a lot of very nice meetings,” Boehner said. “The question is can we find the common ground the American people expect us to find.”

Obama said he was pleased with how the meeting went, and looked forward to additional meetings to come, including one at Camp David.

But he too acknowledged that the task of reaching agreement would always be a difficult one.

“We have two parties for a reason,” he said. “There are real philosophical differences. … Although the atmosphere in today’s meeting was extremely civil, there’s no doubt that those differences remain, no matter how many meetings we have.”

Tuesday’s meeting in the Roosevelt Room of the White House lasted about an hour and included a private meeting without any staff. The parties also discussed other issues, including unemployment insurance and the new START treaty.

Michael A. Memoli and Kathleen Hennessey contributed to this report.