House is entrenched against tax increases

• On Wednesday, Boehner called for compromise to avoid 'fiscal cliff'
• Almost every tax cut enacted since 2001 will expire on Dec. 31
• Rep. Mulvaney and his Tea Party colleagues plan on maintaining budget-cutting priorities

WASHINGTON — The elections Tuesday may have secured a second term for President Obama while strengthening Democrats' control of the Senate, but judging from their reactions Wednesday, House Republicans don't seem any more willing to give ground on the economic battles ahead.

The lame-duck session that starts next week will force Washington to grapple with the expiration of $500 billion in tax cuts and the first wave of $1.2 trillion in spending cuts.

To reach any kind of consensus, the two parties will have to figure out whether to increase taxes on the wealthiest Americans. Obama said throughout his campaign that tax hikes are necessary, but House Speaker John Boehner tried to strike a conciliatory tone while shooting down the possibility of any tax hikes.

"There are two paths we can take to get the revenue the president seeks," Boehner said. "Feeding the growth of government through higher tax rates won't help us solve the problem. Feeding the growth of our economy through a better and cleaner tax code will."

With some races still undecided Wednesday, Democrats had picked up seven seats in the House. But Republicans retained control of the chamber with 235 seats to the Democrats' 194.

One of the big questions coming out of the election was whether the House leadership would change the course established in 2010 after a wave of Tea Party-backed freshmen came in opposing any tax increases and much of Obama's agenda.

On Wednesday, Boehner, House Majority Whip Kevin McCarthy and Republican Study Committee Chairman Jim Jordan all called for a compromise to keep the U.S. from going over the so-called "fiscal cliff." But, as McCarthy explained, they want a compromise that "avoids raising taxes on the American people and job creators."

A group of conservative leaders meeting in Washington was more blunt. "It's a simple formula," said Brent Bozell, founder of the Media Research Center. "When you compromise in their direction, you lose. When you compromise in our direction, you win."

The two sides are facing an epic battle in the final weeks of the year. Almost every tax cut enacted since 2001 will expire on Dec. 31, including the Bush-era tax cuts, the 2009 stimulus tax cuts and others. Two days later, the first $110 billion of a planned $1.2 trillion in spending cuts over 10 years, known as the "fiscal cliff," is scheduled to kick in.

Despite the calls from conservative groups for House Republicans to hold their ground, some warned that refusing to negotiate could force the U.S. into an economic meltdown.

John Engler, the former Republican governor of Michigan and president of the Business Roundtable, a group of more than 200 CEOs, said it's crucial for Washington to remove a cloud of uncertainty that's been hovering over U.S. businesses.

"The president, I believe, has won a mandate," Engler said Wednesday. "I think the Republicans, while being the loyal opposition, are in the minority in government and are going to have to do as the business community and others interested in the country moving ahead, and that's work together to get some of this nation's big problems behind us."

Rep. Sandy Levin, D-Mich., said the reaction of House Republicans showed they were not interested in a responsible compromise. "We need tax reform, but not as an excuse for continued stalemate as the fiscal cliff approaches," said Levin, a member of the Ways and Means Committee.

Rep. Mick Mulvaney, R-S.C., said it was up to Obama to take the first step in negotiations, because Mulvaney and his Tea Party colleagues plan on maintaining their budget-cutting priorities. "I don't think that attitude has changed because the facts haven't changed," he said. "Either we'll deal with it or we won't."