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Obama discusses fiscal cliff, Libya

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The president’s remarks, and shifting tone, reflected the mix of issues that await him. As Obama lays the groundwork for his second term, he will look to a familiar cast of characters on Capitol Hill for aid with legislation, a potentially legacy-making tax and budget deal, and nominations to replace Cabinet secretaries.

The fight over one post is brewing even before Obama names his choice. Graham and McCain have pounced on talk of Rice’s possible nomination and used it as a cudgel in the fight over when the White House knew what prompted the Sept. 11 attack that killed four Americans, including the U.S. ambassador to Libya.

Republicans have accused the administration of downplaying the incident for political reasons when U.S. officials initially described it as a spontaneous reaction to an anti-Islamic film, rather than a terrorist attack. Rice was among the first administration officials to make extended comments on the matter.

“To besmirch her reputation is outrageous,” Obama said. He understood the debate over whether the Benghazi compound was properly secured, he said, “but when they go after the U.N. ambassador, apparently because they think she’s an easy target, then they’ve got a problem with me.”

McCain took to the Senate floor to respond. “This president or this administration has either been guilty of colossal incompetence or engaged in a cover-up,” he said.

Obama will have to try to keep the heated rhetoric from souring his first order of business — negotiations with Republicans to avoid the so-called fiscal cliff, the tax increases and spending cuts scheduled to take effect in the new year unless the White House and lawmakers compromise.

Halting middle-class tax hikes would limit the threat, Obama said, adding, “We could get that done by next week.” The Senate has already passed legislation that would preserve current rates for income up to $250,000 for families and $200,000 for individuals.

Obama is scheduled to meet at the White House on Friday with congressional leaders from both parties.

House Speaker John A. Boehner, R-Ohio, has made an opening offer that would extend all of the expiring tax rates another year while Congress and the White House work on a broader overhaul of the tax code, with the goal of closing loopholes and using the revenue to lower all tax rates.

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