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White House ‘Cliff’ Offer Gets GOP Cold Shoulder


The White House is seeking $1.6 trillion in higher taxes over a decade and an immediate infusion of funds to aid the jobless, help hard-pressed homeowners and perhaps extend the expiring payroll tax cut, officials said Thursday as talks aimed at averting an economy-rattling “‘fiscal cliff” turned testy.

In exchange, the officials said, President Barack Obama will support an unspecified amount of spending cuts this year, to be followed by legislation in 2013 producing savings of as much as $400 billion from Medicare and other benefit programs over a decade.

The offer produced a withering response from House Speaker John Boehner, R-Ohio, after a closed-door meeting in the Capitol with Treasury Secretary Tim Geithner. “Unfortunately, many Democrats continue to rule out sensible spending cuts that must be part of any significant agreement that will reduce our deficit,” he declared.

Boehner added, “No substantive progress has been made between the White House and the House” in the two weeks since Obama welcomed congressional leaders at the White House.

Democrats swiftly countered that any holdup was the fault of Republicans who refuse to accept Obama’s campaign-long call to raise tax rates on upper incomes.

At the White House, presidential press secretary Jay Carney said, “There can be no deal without rates on top earners going up.” Taking a confrontational, at times sarcastic tone, he said, “This should not be news to anyone on Capitol Hill. It is certainly not news to anyone in America who was not in a coma during the campaign season.”

With barely a month remaining until a year-end deadline, the hardening of positions seemed more likely to mark a transition into hard bargaining rather than signal an end to efforts to achieve a compromise on the first postelection challenge of divided government.

Boehner suggested as much when one reporter asked if his comments meant he was breaking off talks with the White House and congressional Democrats.

“No, no, no. Stop,” he quickly answered.

“I’ve got to tell you, I’m disappointed in where we are, and disappointed in what’s happened over the last couple weeks. But going over the fiscal cliff is serious business.”

Republican aides provided the first description of the White House’s offer, although Democratic officials readily confirmed the outlines.

Under the proposal, the White House is seeking passage by year’s end of tax increases totaling $1.6 trillion over a decade, including the rate hikes sought by Obama.

Obama also asked for approval by year’s end of $30 billion to renew expiring jobless benefits, $25 billion to prevent a looming Jan. 1 cut in fees for doctors who treat Medicare patients and an undisclosed amount to help homeowners hit by the collapse in real estate values.

The White House also wants a new stimulus package to aid the economy, with a price tag for the first year of $50 billion, as well as an extension of the Social Security payroll tax cut that is due to end on Dec. 31, or some way to offset the impact of its expiration.

In political terms, the White House proposal is a near mirror image of what officials have said Republicans earlier laid down as their first offer — a permanent extension of income tax cuts at all levels, an increase in the age of Medicare eligibility and steps to curtail future growth in Social Security cost-of-living increases.

In exchange, the GOP has offered to support unspecified increases in revenue as part of tax reform legislation to be written in 2013.

The GOP said the White House was offering unspecified spending cuts this year. Those would be followed next year by legislation producing savings from Medicare and other benefit programs of up to $400 billion over a decade, a companion to an overhaul of the tax code.

For the first time since the Nov., 6 elections, partisan bickering seems to trump productive bargaining as the two sides maneuvered for position.

Senate Majority Leader Harry Reid told reporters, “We’re still waiting for a serious offer from Republicans,” the Nevada Democrat said at a news conference.

Sen. Chuck Schumer, D-N.Y., was more emphatic.

Referring to a meeting at the White House more than a week ago, he said both sides agreed to a two-part framework that would include a significant down payment in 2012, along with a plan to expand on the savings in 2013.

“Each side said they’d submit a down payment. We have. Our preference is revenue. What is theirs?” he said, speaking of the Republicans.

The White House also circulated a memo that said closing loopholes and limiting tax deductions — a preferred Republican alternative to Obama’s call to raise high-end tax rates — would be likely to depress charitable donations and wind up leading to a middle class tax increase in the near future.

At issue is a bipartisan desire to prevent the wholesale expiration of Bush-era tax cuts and the simultaneous implementation of across-the-board spending cuts. The potential spending reductions, to be divided between military and domestic programs, were locked into place more than a year ago in hopes the threat would have forced a compromise on a deficit reduction deal before now.

Economists in and out of government warn that sending the economy over the “cliff” would trigger a recession.

To avoid the danger, Obama and Congress are hoping to devise a plan that can reduce future deficits by as much as $4 trillion in a decade, cancel the tax increases and automatic spending cuts and expand the government’s ability to borrow beyond the current limit of $16.4 trillion.

In the first few days after the elections, Boehner said he was willing to accept a deal that included new revenues, a long-time Democratic demand, and Obama has said he will sign on to savings from Medicare, Medicaid and other benefit programs that Democrats have long defended from proposed Republican cuts.

At the same time, both sides have worked to tilt the bargaining table to their advantage. As part of that effort, Obama travels to Pennsylvania on Friday to campaign for his tax proposal.

Boehner, who will begin a second term as House speaker early next month, has appealed to his rank and file to remain united. At a closed-door meeting this week, he displayed polling data that showed the public would rather see loopholes closed than rates raised as a means of raising revenue for the government.

At the same time, there are tremors within the GOP ranks, with a small number of Republicans saying they are willing to let tax rates rise at upper incomes in view of the election returns, and others predicting legislation to that effect would pass the House if put to a vote.

(AP)



7 Responses

  1. The president WANTS to raise taxes on EVERYONE and that will be accomplished. ObamaDoesntCare is a tax and we will ALL pay for it. The tax rates currently in effect, since President Bush, will end and they will go up. If you think those were “only” for the “rich” you’ve got another guess coming. They were across the board!!! Of course the lamebrain media won’t tell you that.

    Did you know that Obama wants to have mortgage interest taxed. That means if you own a house and you have a mortgage, you have been able to deduct the interest part of you payments. This is substantial for everyone! In my case (I am in one of the lower brackets), that means I will show another 13000 dollars in income. This translates into paying another 2500 dollars a year in Federal tax!!!

    Wait till the go after the 401K because Obama wants that too. Any money contributed to the 401k will be taxed as regular income — no deduction like we had till now.

    Obama and the demorat party want ALL your money no matter how muchj you earn. I don’t know what it will take for you to see it.

    The only choice is for them to stop spending NOW!! Not in 10 years from now because those numbers are hypocrisy. SPENDING CUTS ON ALL ENTITLEMENTS MUST BE DONE ACROSS THE BOARD NOW!!

  2. The Democrats want more taxes to support ever increasing spending. It’s not a compromise offer if all he offers is to have more taxes and more spending. If he were serious, he’ld either offer not to raise taxes, or not to increase spending.

    The Republicans didn’t lose over finance or economics. They lost over racism (opposing Hispanics in particular) and candidates fixated on sex in a way that is hypocritical for a party that claims to support small government. The Republicans should demand lower taxes or lower spending.

  3. What a chutzpah. Instead of raising taxes to reduce the deficit, which would at least have some sort of merit, he’s proposing to raise taxes and increase spending, so the deficit would keep rising! What happened to the “balance” he was prating about just recently? First cut spending, at least by one symbolic dollar, and then talk about tax increases.

  4. this is a joke!!!!! dem’s are still talking spending not cutting.
    Mark is correct, it is only a matter of time till Obummer takes more of our money. The sadest part of this is the American sheeple will bitch about it but won’t stand together to curtail what this admin is going to do.
    Just wait and see-Oh BTW by then it will be too late.
    good bye America you were nce the greatest country on the planet now you are the laughing stock of the world!!!!!!!!!!!!!!

  5. #4 “Greece was bailed out from bankruptcy; who will bail out USA after Obama leaves?”

    ANSWER: The Fed (Federal Reserve Board)

    Cf: Germany, 1922-1923

    At least then everyone gets to be a billionaire. Won’t you feel good putting a billion dollar coin in the pushka!

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