Obama holds out prospect of post-election 'grand bargain'

Matt Spetalnick

WASHINGTON, Oct 24 (Reuters) - President Barack Obama voiced confidence that if re-elected he would secure within six months a deficit-reduction deal with Republicans equivalent to the ``grand bargain'' he failed to achieve last year.

Obama made the bold prediction in an interview Tuesday with the Des Moines Register which was originally off-the-record. The White House released it Wednesday after the editor of the newspaper, which is still deciding its presidential endorsement, wrote a blistering blog complaining of the restriction.

Win or lose, Obama faces a so-called ``fiscal cliff'' of automatic across-the-board spending cuts and tax increases set for the end of the year, before the swearing in of a new Congress and the victor in the presidential election.

``It will probably be messy. It won't be pleasant,'' he said of the negotiations ahead. ``But I am absolutely confident that we can get what is the equivalent of the grand bargain that essentially I've been offering to the Republicans for a very long time, which is $2.50 worth of cuts for every dollar in spending, and work to reduce the costs of our health care programs,'' Obama said.

He also said a broader long-term deal could ``credibly meet'' the target of $4 trillion in deficit reduction over 10 years as proposed in December, 2010 by a deficit reduction commission headed by Erskine Bowles and Alan Simpson.

``We're going to be in a position where I believe in the first six months we are going to solve that big piece of business,'' Obama said.

Obama's did address with specifics how the fiscal cliff could be avoided. But his reference to ``six months'' for achieving a grand bargain conforms with the prevalent view on Capitol Hill that Congress and the White House will attempt some temporary fix on taxes and spending in order to work on something larger in the months after a newly-elected Congress convenes.

The comments to the largest newspaper in Iowa, a crucial political battleground state Obama visited on Wednesday less than two weeks before the Nov. 6 election, could meet a skeptical reaction in Washington where congressional gridlock remains.

Obama and U.S. House of Representatives Speaker John Boehner, the top Republican in Congress, failed to reach a ``grand bargain'' on the deficit last year when talks over raising the debt ceiling for federal borrowing reached an impasse. Only an 11th-hour deal in August 2011 prevented an historic government debt default.

Recriminations over who is to blame for the ``fiscal cliff'' that resulted have been a regular feature of the tight White House race between Obama and Republican Mitt Romney.