Obama makes new offer to narrow gap on cliff

[Auburn85 434]

http://www.politico....11.html?hp=t1_3

President Barack Obama and House Speaker John Boehner made significant progress Monday toward a fiscal cliff deal, as Obama’s new offer on tax rates moved the two sides closer to an agreement.

But questions remained over whether Boehner could sell the key points to Republicans at a pivotal meeting Tuesday. The progress remains fragile, and the next 24 hours are critical as lawmakers from both parties and interest groups on all sides of the fight weigh in.

Obama has proposed raising tax rates on income above $400,000 — up from $250,000 — as part of a counteroffer to Boehner, according to a source familiar with the talks.

The $2.4 trillion proposal marks the first time that Obama has given ground on income tax rates. He made another significant move in Boehner’s direction by meeting the speaker’s demand for an equal amount of spending cuts to new revenue — a concession that could prove instrumental in reaching a final deal, although the speaker’s aides are disputing the White House’s claim of a dollar-for-dollar match.

Obama proposed $1.2 trillion in new revenue, down from his previous offer of $1.4 trillion. And he offered $1.2 trillion in spending cuts, including $400 billion in entitlement savings, which is an increase of $50 billion.

The proposal is not a final offer, but the White House views it as a “good offer” that gets them close to reaching a deal because they have met Republicans more than halfway on spending and halfway on revenues, the source said.

The counteroffer was made Monday, following Obama’s third face-to-face meeting with Boehner in more than a week and Boehner’s concession Friday to raise rates on income above $1 million. Boehner has offered to raise $1 trillion in revenue and cut $1 trillion in entitlements.

The speaker’s office described the latest offer as progress but disputed some of the savings the White House was counting in its dollar-for-dollar ratio.

“Any movement away from the unrealistic offers the President has made previously is a step in the right direction, but a proposal that includes $1.3 trillion in revenue for only $930 billion in spending cuts cannot be considered balanced,” Boehner spokesman Brendan Buck said in a statement. “We hope to continue discussions with the President so we can reach an agreement that is truly balanced and begins to solve our spending problem.”

Obama has also proposed changing the cost-of-living calculator for government programs such Social Security while allowing protections for the most-vulnerable populations. He is seeking an extension of unemployment benefits and new infrastructure spending, as well as a two-year extension of the debt limit with an opportunity for Congress to register its opposition.

The president would also agree to delay implementation of across-the-board spending cuts, known as the sequester, until Congress can pass an overhaul of the tax code.

The White House gets close to $1.22 trillion in spending reductions by slicing $400 billion from health care entitlements, $200 billion from other mandatory spending programs, $100 billion from defense programs and $100 billion from other discretionary programs.

It then closes the gap by counting savings on interest payments and changes to the cost-of-living calculator — two elements that the speaker’s office says aren’t cuts.

There are sure to be a number of other sticking points.

Most glaringly, it’s going to be difficult for Obama to stick any infrastructure spending into a year-end deal. House Republicans would want the spending offset — and they don’t trust the administration on spending tax dollars wisely after the stimulus.

But in a concession to Republicans, Obama abandoned his call for a renewal of the payroll tax cut or an equivalent tax break.

The debt-limit proposal is likely to draw GOP resistance because many in the party are reluctant to allow the president to raise the borrowing limit without forcing an equal number of cuts.

And the new threshold of $400,000 for higher income tax rates will also be tricky for Boehner, who will need to talk to his Republican Conference before going lower than the $1 million threshold from his offer.

[autigeremt 6,970]

This argument is flawed. The amount of revenue generated from these tax hikes result in 10 days of government operation. These people make me sick.

[BamaGrad03 0]

I have to be honest, I'm happy that both sides are giving in some. It may be baby steps in terms of fiscal policy, but it is mega steps in terms of eroding this staunch partisanship that is creating nothing but gridlock in DC.

[autodd03 0]

I have to be honest, I'm happy that both sides are giving in some. It may be baby steps in terms of fiscal policy, but it is mega steps in terms of eroding this staunch partisanship that is creating nothing but gridlock in DC.

BG, I disagree with your last statement. Congress can come together to pass bills that are a priority for them. They send pork loaded bills to the president quite often. I think they lack the political will to do the "dirty" work like eliminating useless programs, cutting spending, reforming the tax code and paying off the debt. This requires leaders that are willing to do what is necessary to make this country prosper regardless of "popularity". We have very little leaders in all of this.

[BamaGrad03 0]

But we're a week removed from "you just give us the tax increases now, and 'trust us' on the spending cuts" - that's progress.

[autigeremt 6,970]

Progress it when both sides show that being an adult is more important that being re-elected. We don't have time for this silly pennies on the dollar stuff. We need bold and aggressive fiscal changes that are prorated in over the next 5-6 years. This stuff won't fix anything.