Washington (CNN) - The White House and Congressional Republicans are squaring off in negotiations to avert the fiscal cliff, with each side accusing the other of blocking a deal.
For the first time we're getting a look at what the White House is offering to break the stalemate. Republicans consider it an overreach. Democrats make clear it's a first offer, to get specific on the numbers.
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Treasury Secretary Timothy Geithner and White House Director of Legislative Affairs Rob Nabors presented the details while making the rounds on Capitol Hill Thursday.
The headlines? The White House is asking for $1.6 trillion dollars in new taxes. This would include the president's campaign pledge to raise tax rates on families who make $250,000 a year and more. It would bring in additional money by closing loopholes, limiting deductions, raising the estate tax rate to 2009 levels and increasing capital gains and dividends taxes.
Republican sources tell CNN the $1.6 trillion figure is higher than any number the White House had previously presented and was so disarming, according to one source, it set the talks back.
Democrats say the GOP is feigning outrage. In September 2011, Obama first proposed raising taxes one and a half trillion dollars - at that time to pay for the so-called Jobs Bill. Republicans dismissed it as a political stunt with no chance of movement.
It would seem the White House is digging in on its position on taxes - or at least making their stance clearer to the Republicans and the public.
Reflecting a new aggressive posture by the Democrats, the proposal laid out by Geithner also called for additional spending, including $50 billion in new stimulus spending next year, a home mortgage refinancing plan, an extension of unemployment insurance and an extension of the payroll tax cut. It includes a permanent mechanism to vote on a debt limit increase, which would avoid the kind of crisis the U.S. faced in the summer of 2011.
In return, according to multiple sources, the Obama administration is offering to find $400 billion in new cuts to Medicare and other entitlement programs, with the specifics to be hammered out next year.
While Republicans called these proposals unbalanced and unreasonable, White House aides made clear the president is ready to take a counter offer.
This all amounts to an elaborate negotiating dance. With time running out until tax rates automatically rise and drastic spending cuts kick in - part of the so-called sequester - both sides are playing for leverage against the clock.
Democrats are emboldened by electoral successes and that the president won a second term while pledging to do what the Republicans are still objecting to: raise tax rates for the wealthiest. Democrats believe the Republicans must and will relent on that point.
To that end, CNN learned in a phone call Wednesday night Obama told Boehner there would be no deal unless the GOP agrees to raise tax rates for the wealthiest. That means recently floated alternatives – including closing loopholes or limiting deductions - would not be enough on their own. Rates must go up as well for the top 2% of income earners.
Republicans tried to turn the conversation away from taxes, insisting the real debate should be about spending cuts.
"Despite claims that the president supports a balanced approach, Democrats have yet to get serious about real spending cuts," Boehner told reporters Thursday.
Reflecting a growing sense of pessimism among Republicans, the speaker added, "no substantive progress has been made in the talks between the White House and the House over the lat two weeks."
In a statement that accused Republicans of blocking a deal to protect "the very wealthiest individuals," White House Deputy Press Secretary Josh Earnest responded to the GOP in an email.
"The President has already signed into law over $1 trillion in spending cuts and we remain willing to do tough things to compromise, and it's time for Republicans in Washington to join the chorus of other voices - from the business community to the middle class Americans across the country - who support a balanced approach that asks more from the wealthiest Americans," Earnest said.
the best way to pay down what you owe and maintain
your standard of living, is to increase your income,
in other words for the government more tax revenue.
The best way to get more tax revenue is not to tax 2% of the population more... it's to grow the economy and broaden the tax base. The $80 billion raised by taxing the top 2% is nothing more than a few grains of sand in the Sahara desert. With an annual deficit north of $1 trillion, we'd still be going in the hole to the tune of $920 Billion per year. Throw in some compounding of interest and in a few years, the show's over. Then EVERYONE is in trouble (with the exception of the rich, who will still be rich... how ironic, no?). No... we may have a small revenue problem, but we have a far, far greater spending problem.
Taxes will not go up for the middle class even if the so called fiscal cliff hits. If the fiscal cliff does hit, a bill will be passed in January to pass a new tax cut for the middle class. Both parties will fall all over each other to be the first to produce the bill in the House and Senate. Obama would not dare veto it. As for caping deductions to grow revenue, an article in the Washingtonn post said a 50,000 cap would produce 750 billion in new revenue. I have heard several republicans suggesting a cap of 40,000 which they say get closer to 1 trillion. So there is no reason for Democrats to insist on a rate increase when a deductions cap produces the same amount. Obama is asking for 1.6 trillion, never going to happen unless maybe you get there by letting payroll tax cut to expire.
Also a promise by Obama of spending cuts to be determined in the future are a non starter also. Democrats pulled this one on Reagan. Promised future spending cuts for tax cuts now and then never followed thru on the spending cuts. Republicans won't be fooled again by such a promise. Let sequestration happen if Obama will not agree to real spending cuts that take effect at the same time as the tax increases and all incuded in the same bill. Just like the middle class tax cuts, bills to replace sequestration with alternative spending cuts could be passed in January if Obama could not live with the sequestration cuts.
"Deficits don't matter"
Remember , Republicans?
2014 can't get here soon enough
Remember , Republicans?
No, they don't remember it that way. John Kerry said that.
If this president really cared about this country, or anyone in it, he wouldn't be planning an extended holiday vacation to Hawaii on taxpayer money – 4 million dollars – while the fiscal crisis is happening. This either means that the fiscal cliff is a facade that is manufactured to manipulate the American people, or the president of the US would rather be enjoying himself at everyone's expense. Either option stinks.
November 30, 2012 01:00 pm at 1:00 pm |
You know, the Government should really find a product that everyone needs and wants and sell that product to people! In turn this will make a surplus and the Government can spend any money it wants to do what it wants! Treat the Government as a Business!
The Bush Tax Cuts were made so you could start to take care of yourself. But the Libs put two Gorillia's in the Mix. The Housing plan, (Failed) and Obama Care, (Will Fail). It is time for you to start picking up after yourself. I know, i know, nobody taught you how. The School of Hard Knocks is an expensive experence. Get ready.
It is hard to believe that the Liberals think that punishing the hardworking successful by raising their taxes will solve all the problems of terminal indebtedness. The 2% taxed @ 100% of their income would only run our wild spending government for 8.5 days at the present rate.
this "plan" proposed by Tim Guietner wants to forgive student loans, raise taxes on gas which is already 18% raise taxes on small business owners permanently lift the debt ceiling and it also includes another "stimulus" package, does this administration have no shame?,
Fair is Fair wrote:
...The best way to get more tax revenue is not to tax 2% of the population more... it's to grow the economy and broaden the tax base. The $80 billion raised by taxing the top 2% is nothing more than a few grains of sand in the Sahara desert. .....
It't time to climb down from that hamster wheel the right wing has given you. In case you haven't noticed, we did all of the word salad over the past decade, and look where it took us. In case you haven't noticed, the "failed Obama economic policies" have actually been mostly the same policies that tanked the economy because the worst of them policies are still in place.
BTW, since you favor letting all of the Bush Tax Cuts expire,...I'm still waiting for your answer on whether or not that should include nearly doubling the capital gains tax rate, and getting rid of all of the Bush loopholes enacted "to grow the economy",
These folks live in a world where everyone marches in lock step and it's their way or the highway. If that means they take the entire world over the cliff with them then so be it. In the end, we'll be blamed for not paying attention to where we were stepping!
Really ??? cuts later, details later??? what hogwash. This is the Dem way – tax and spend and spend and spend until the USA is underwater – then the rich will still be ok but the rest of the country completely screwed. Why can't Obama man up and accept is own commision's recommendations – Simpson -Bowles actually makes sense. The proposal's here are a joke – let's go over the cliff and see who suffers most – for the good of the country lets stop spending whatever it takes STOP SPENDING money we don't have and cannot get no matter how much taxes are raised on the "rich"
New day, same tired game. The GOP is hiding in the bunker afraid of Norquest. If the middle class faces a tax increase next year, the presidential election will be remembered as the closest the GOP got to a victory anywhere.
How many misinformed are under the impression that 47% of us are on welfare... as posted above.. What's your solution, kill off the elderly, the mentally handicapped and homeless children. At this rate it might just happen, no medical care for them?
The sequestration would hurt Republicans more than Democrats, but it also would hurt every one. I am not surprised at the so-called anger from the GOP and sour old Mitch McConnell laughing when he is not offered huge cuts for the poor, sick, and elderly. That's about the only time he ever laughs. When you work on a deal, there is an offer, then a counter offer. Where is the GOPs? Did they learn the "disclose no details of your plan" from Mitt Romney? The fact is, they have not come off their ultra-right obstructionism. But, there is defection in the ranks. Watch out Tea Party and Norquist, your time is about up! Look at the polls and the election results and act accordingly if you want to save your party.