Fiscal stalemate: A new proposal and more accusations
November 30th, 2012
08:09 AM ET
4 months ago

Fiscal stalemate: A new proposal and more accusations

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.


Filed under: Fiscal Cliff • John Boehner • President Obama
soundoff (266 Responses)
  1. pinochled

    Take us over the Fiscal Cliff road bump, Mr. President. That's the only way we'll get enough revenue for a balanced redress of the deficit plus make the necessary investments moving forward. We'll never get a satisfactory outcome trying to placate Republican ideologues in the House. GOP Representative Tom Cole is correct, but hardly any of the other Republicans agree with him.

    November 30, 2012 09:45 am at 9:45 am |
  2. Ray E. (Georgia)

    Aw Humm,
    It all figures. The Libs want business to hire workers, pay them a good salery, pay all their benifits, pay for their health care, pay for all the upkeep of the business, and then pay a high rate of taxes, in other words send what little is left to the government. That leads to another depression. Good plan.

    November 30, 2012 09:48 am at 9:48 am |
  3. Ken

    Hey Boehner! Take a lesson from history or you will repeat the same mistakes.

    King Canute sat at the water's edge and commanded the Tide not to rise. So it will be with you, commanding that the taxes do not rise. The voters, by a good majority, voted for a platform of eliminating the Bush taxbreaks for only the extremely wealthy. Who DO you think you are to try to pervert Democracy???????

    November 30, 2012 09:50 am at 9:50 am |
  4. Steve

    Obama supporters.... Serious answers please:
    an offer of $1.6 trillion more in taxes (more than what Obama wanted in 2011), $50 billion in additional spending, no spending cuts, and presidential authority to raise the debt limit anytime the president wants (any president not just this one).
    So, you consider this a viable offer to be seriously considered because ......? And can you seriously consider this a compromise?

    November 30, 2012 09:56 am at 9:56 am |
  5. plain&simple

    If republicans want to be leaders....now is your time. Put it out there!! No not the policy that lost you the election!!! It wasn't Romney it was all of you and your repeating of policy like a brainwashed Grover doll. So have a independent thought and make an offer that shows that....don't be afraid ....small business makes adjustments all the time....imitate you professed heroes......

    November 30, 2012 09:57 am at 9:57 am |
  6. Pete

    @Washington is out of touch,you my friend are as delushional as your fellow republicans in congress..Pres.Obama has a winning hand and your reps have zilch because the writtings on the wall,8 republicans just lost to Democrates 0 and that's just the beginning of the end for your party as you know it.So to you Mr Ignorent its either work with this reelected president or find new jobs after midterms because they'll all be gone.Norquists pledge will be nothing because his signees will be gone as well and it should be law if you sign such a pledge you get jail time for treason,plain and simple.Get with the program of jobs ,economy or be gone the choice is yours,we the people of America who voted for progress in Pres.Obama have had enough and your party is pathedic as well never doing anything for the American people and you know it!!!

    November 30, 2012 10:00 am at 10:00 am |
  7. ART

    BOEHNER is just so disgusting and goes to show you the Republicans don't give a crap about any one else but wealthy CEO's. To Rick McDaniel get over it you backed a losing team with no new ideas and hateful rhetoric, if Obama could run again in 2016 he'd get my vote.

    November 30, 2012 10:01 am at 10:01 am |
  8. ANOEL2005

    RICK McDANIEL,

    you are so right.....Obama doesn't want bipartisan solutions, he wants a dictatorship.

    November 30, 2012 10:02 am at 10:02 am |
  9. Anon

    I say we embrace Obama' tax the rich plan and Ryan's slash the budget plan and use the extra cash to pay down some debt. Who's with me!!!

    November 30, 2012 10:02 am at 10:02 am |
  10. sonny chapman

    "Elections have consequences"- George W. Bush, 2004.

    November 30, 2012 10:02 am at 10:02 am |
  11. rs

    Rick McDaniel-
    Just once, the truth please. No where did Mr. Obama demand "runaway" spending, or Congress to reliquish power. The fact is under GOP "leadership" Congress won't do its job (hence we don't have a budget)- it certainly doesn't help that 95% of the GOP in Congress signed Mr. Norquist's little anti-American pledge either.
    Mr. Obama asked for $1.6 trillion in tax increases (ending the "temorary" Bush tax cuts), and asked that the debt ceiling approval not happen in the House- remember how well the GOP did with THAT last time?
    Look- if McConnell and Boehner decided to put American needs in front of those of their pathetic party, we wouldn't be in this mess now.

    November 30, 2012 10:03 am at 10:03 am |
  12. Peace

    My fellow Dems, no slander no retreat. We won. Imagine if they were them (republicans) won and dems acting as they are doing now! Their leader Rush Limbaugh could have been roaring like the lion in its den. Stick to your guns. We are behind you.

    November 30, 2012 10:03 am at 10:03 am |
  13. Ryan

    Harry 101

    You Democratic supporters are right the GOP lossed by a whole 3 million votes. The President can and should receive whatever bill he wants. The 48% that voted against him just must all be fools. One Party, One voice and thats all that should be heard right. Take FOX off the air censer those that disagree. Only Obama as the leader with all power yes thats the way it should be. NO OTHER OPTION ALLOWED EVER OBAMA IS THE VICTOR.

    Yes Harry 101 you are all fools. By the way it is 47% that voted against Obama not 48%. Oh.... the Irony!!!

    November 30, 2012 10:04 am at 10:04 am |
  14. mucklucky

    I say pass everything Obama asks for. Let's now call it the Obama tax plan so he can threatening to end the Bush tax cuts. Let's call it the Obama budget so he can quit blaming Bush on the economy. Then we can call it the Obama recession because he will own it!

    November 30, 2012 10:04 am at 10:04 am |
  15. lapazjim

    Well the clowns are at it again.Its like a three ring circus that doesn't stop.The President,Senators and Congress is thinking they can play their same games they always do.It wont work this time though.You cant put a band aide on it and wait till next time,nor can they put it off until after the first of the year.This needs to be addressed now or we as a country will feel even more hurt than we do now.No one side will be to blame,but both sides will along with the President.Obama did his crying to get Obama care through now he can go cry to get this Fiscal Cliff taken care of.Or maybe Obama care was that much more important than seeing more people suffer in this economy.
    We as the people who voted these clowns in should be telling them(Obama too)that they will get no Holiday break until this matter is taken care of once and for all.This means no one in The Senate or Congress leaves for Christmas or New years breaks as usual. This is not to be taken as business as usual as it is not.It is the fate of this country at stake and its as though they just do not care.
    QUICK WE NEED LOBBYISTS WITH MONEY TO PAY THEM OFF.This would take care of the problem quick.You put money in their pockets!!!!

    November 30, 2012 10:05 am at 10:05 am |
  16. rs

    Steve-
    Yes- because we have not had one single solitary jobs-related bill from the House like Boehner promised, and clearly growing the economy is anothe way of expanding revenue and closing down the debt.

    Can you answer me this:
    As both the CBO, the CRS and 30 years' experience shows giving the rich disproprotionaly greater tax cuts fails to produce jobs- why is the GOP so wedded to that failed policy?
    Where are the jobs bills?

    November 30, 2012 10:06 am at 10:06 am |
  17. CarolinaGirl

    In response to Mr. McDaniel, please please quite watching Fox News. You have no idea what you are babbling about.

    November 30, 2012 10:07 am at 10:07 am |
  18. mucklucky

    Let's raise taxes and give him everything he wants. Let Obama see the results of his policies then try to blame Bush. If the conservative votes won't show up... let them pay more taxes then next 4 years!

    November 30, 2012 10:09 am at 10:09 am |
  19. rs

    Harry 101-
    Remeber Bush's "big" win of 2004? He said he had "Political Capital" to burn- he won by 1 electoral college vote! Naturally the fool squandered that so-called "capital" on a nationwide tour trying to privatize Social Security.
    Compared to Bush's "big win", Mr. Obama trounce Romney in EC votes, won the popular vote by about 4% and the GOP lost seats in both the House AND Senate.All this in a year when pretty much anybody should have been able to beat the Democrats. Figure it out- your brand is toxic.

    November 30, 2012 10:10 am at 10:10 am |
  20. S.B. Stein E.B. NJ

    I would hope that the GOP can answer the proposal with something closer. Without that, they are back to the deny deny deny pattern that results in gridlock and problems. It can no longer be "my way or the highway" attitude.

    November 30, 2012 10:13 am at 10:13 am |
  21. ghostriter

    OK, I have to part ways on this one. We do need to bring up more spending cuts. I ain't too conerned about the rest of it. The revenue side may be a bit much, but I can live with it.

    Republicans, you may find an ally if you push for more cuts. And quit complaining about the tax issues.

    November 30, 2012 10:14 am at 10:14 am |
  22. Joel

    Let the tax cut expire is a good thing, more revenue and a trillion dollars automatic cuts in spending.Everyone will shoulder the burden. We never be able to face reality unless we start to feel the pain and that what we need. $17 trillion in defecit will not disappear and the president, congress and yes, the American people too do not see it.

    November 30, 2012 10:14 am at 10:14 am |
  23. rs

    Ray E. (Georgia)
    And what does the GOP want? More tax cuts for the rich, higher taxes on the poor and middle classes, no regulations on business, and no worker protections or benefits. What's that a recipe for genius? A plutocracy.

    November 30, 2012 10:14 am at 10:14 am |
  24. rs

    mucklucky-
    Raising taxes not only made the economy better under Clinton, it made the first federal budget surpluss after Reagan and Bush. Glad you see the light.

    November 30, 2012 10:16 am at 10:16 am |
  25. Steve

    Truth is, 0bama wants to raise taxes on the middle class. He knows that using the Buffett rule of raising taxes only on the top 1% will only bring enough taxes to run the government for about 8-9 days.

    0bama needs more taxes from the middle class, he thinks, to bring about "fairness". Don't think 0bama is going to stop here in the USA, he wants world "fairness" that will drag down all of America, middle class, poor and the 1%, to raise the worlds poor.

    Truth is, free markets will raise the worlds poor faster and higher than redistribution ever will.

    I dare you liberals to watch the "Free to Choose" video series from PBS.

    November 30, 2012 10:17 am at 10:17 am |
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