Fiscal stalemate: A new proposal and more accusations
November 30th, 2012
08:09 AM ET
3 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. laskerknight

    So the Republican's don't think We'er that serious about controlling cost. Let's really show them We are by putting public option back on the table.That way Boehner can't say Obamacare wasn't on the table. We really do have to get Healthcare prices in check.This is really the elephant in the room...

    November 30, 2012 10:18 am at 10:18 am |
  2. Don in Albuquerque

    Ray E.

    What the prez did was avoid another depression that would have been brought to you courtesy of the GOTP. When are you guys gonna get it through your heads. Tlhe corporate welfare party may well be over and good riddance. And job creators? Yeah if you wanna work for McDonalds. Get a life.

    November 30, 2012 10:19 am at 10:19 am |
  3. Jeff--Former Republican

    Steve–I dare you to stop watching Fox "News" for a week.

    And as far as the GOP being angry...who cares? Go off the cliff. Get rid of all the Bush tax cuts. Immediately propose an Obama tax cut that affects only those who make 250K or less. If the House GOP won't pass it let their constituites take care of them in two years. If the GOP is willing to fall on their sword in order to protect the very wealthy; who are we to stop them.

    November 30, 2012 10:23 am at 10:23 am |
  4. Peach

    Bottom line: Obama hate Capitalism. Obama wants to raise taxes on the middle-class. Obama hates free markets. Obama voters: BEND OVER.

    November 30, 2012 10:23 am at 10:23 am |
  5. sayer

    Stand your ground, Mr. President. We've got your back!

    November 30, 2012 10:24 am at 10:24 am |
  6. Zenger Folkman

    Give it up, GOPers, you lost. You have had your way with our economy for over 12 years. It's time to fix it. Help out or get out of the way.

    November 30, 2012 10:25 am at 10:25 am |
  7. JASON

    Listen to all of the Presidents speeches. He wants some form of fairness for all americans. He can't please everybody,but the Gop does not want to please the middle class or the poor. Bottom Line: Republicans do not want to work for a black president or democrats.Period.

    November 30, 2012 10:26 am at 10:26 am |
  8. betterdays

    Increasing taxes on the rich won't help you. The hole is too deep. Taking money from successful people will make you Democrats feel better for a month or two, but won't begin to solve the problem; I see you're already spending it again before you've even gotten it. Your plan to artificially elevate the unsuccessful by diminishing the successful continues to fail miserably, as it has for decades.

    November 30, 2012 10:28 am at 10:28 am |
  9. MSARK

    There is nothing new in this tax increase proposal. However, Obama campaigned on an 800 billion tax increase. Now he's back to 1.6 trillion. Higher by 100 billion than he tried in the last debt ceiling debate. He promised a balanced approach in the campaign. Now he proposes no spending reductions and, in fact, wants to increase spending. Is there no end to the lies this man will tell? Republicans should just walk away and tell him when he wants to negotiate they'll be back. Democrats have no intention, never have, on reducing spending. They buy votes with it. To hell with the fiscal health of the country. The debt and fiscal mess will only get worse under Obama.

    Now he proposes that congess relinquish it's constitutional power to control the debt. He wants to have sole discretion on how far we go into debt. That is scandalous. Obama is deceitful and dishonest. His power grabs are becoming more bold by the week. And the people are so ignorant they foolishly re-elected a lying, deceitful scoundrel.

    November 30, 2012 10:29 am at 10:29 am |
  10. Jack

    That right it's the same that was on the table in 2011! He won the election 52% to 48% and won the electoral vote also!

    I doesn't take a very smart person, to realize the Republicans lost, pass the bill!

    November 30, 2012 10:29 am at 10:29 am |
  11. bigdoglv

    Read the comments and you can see there will never be a real deal to solve our problems. Our pols and their followers are treating this like a football game. A bunch of useless cheerleaders.

    November 30, 2012 10:30 am at 10:30 am |
  12. XXXXX

    Republicans must understand that we do not hold elections for nothing. We stood hours and hours in lines in order to voice out what we want. We did it and won. Now we want to see it is implemented. Tax the rich.

    November 30, 2012 10:31 am at 10:31 am |
  13. PhiliaToo

    I'm behind the President 100% on this...bring the TGOP to their knees!

    November 30, 2012 10:31 am at 10:31 am |
  14. rs

    Steve-

    You really do need to give up on FOX. The "day" measurement is a poor one against reality. Over ten years it is a $trillion. At this point that counts- especially as the GOP offers nothing but welfare for the rich.

    November 30, 2012 10:31 am at 10:31 am |
  15. Jack

    lets be clear, the president prolonged the recession with his policies. This great recession as we call it was caused by a housing bubble that sucked the life from the financial markets. The Tarp program allowed us to avoid a depression as we learned for 1930's depression. What Obama did not learn for the depression or all recessions since is that stimulus that works are those that apply to businesses as they then hire workers etc. Obama's failed policies did nothing that was worthwhile to business and put all his eggs in a failed basket of providing assistance to the people directly as was done the the depression days. This president is ignorant in economics and his failure has hurt the needy more than any president since rosevelt!!

    November 30, 2012 10:32 am at 10:32 am |
  16. Ann

    The citizens of USA voted. GOP needs to do what the the election results prove. Remember GOP said" two paths American people will vote for what they want us to do". Well GOP start working toward what the AMERICAN votes mandated. Stand your ground Mr. President.

    November 30, 2012 10:33 am at 10:33 am |
  17. 2014 Voter

    I will make sure my vote count in 2014,,,, We need to vote these do nothing republican out of the office.

    November 30, 2012 10:33 am at 10:33 am |
  18. Blossom89

    Let the Sequester cuts AND tax increases kick in then put a tax break for the middle class on the table. Then it's in the GOP's court as to whether they will give the middle class the same tax break they wanted to give the 1%er's or not. The American people will really see what they're made of then!!

    November 30, 2012 10:33 am at 10:33 am |
  19. Lynda/Minnesota

    "Increasing taxes on the rich won't help you."

    Decreasing taxes on the rich didn't seem to help create jobs either. Sitting on profits, laying off employees, raising your middle finger at hard working Americans is a hell of a way to run a national political party. Yet, it is all we are getting from the Republican Party. Might work for you, but it isn't working for America. Not anymore.

    November 30, 2012 10:34 am at 10:34 am |
  20. trex

    Come on boys...........we ALL know the gop is the HAND PUPPET of the top 2%..........What need to do is check the finger prints where that hand enters these republicans.

    November 30, 2012 10:34 am at 10:34 am |
  21. john

    @Peach

    The Republicans don't practice Capitalism. The practice "Grabitallism". They set national rates really low, Grab as much cash as they can, and then sit on it until they die or invest overseas.

    Look into the independent study that was commissioned on behalf of the House of Reps, that they subsequently voted to have removed from the Library of Congress because it rightfully pointed out that the lowering tax rate over the past 60 years has not improved the economy but only increased the wealth gap between the wealthy and the working class.

    November 30, 2012 10:35 am at 10:35 am |
  22. WB

    Do Republicans even know what compromise or bargaining mean? Apparently not. This is just putting something on the table as a starting point. Getting the ball rolling. If you don't like it, then counter offer with SOMETHING that would actually help our economy and country. Why didn't the GOP put something on the table first?

    Compromise, people. It's how things get done in functioning parts of society.

    November 30, 2012 10:35 am at 10:35 am |
  23. Abe

    Obama isn't serious about any cuts. He actually threw in $200M in public works and new stimulus. Congressman Ryan made a proposal last time and got demonized by Obama and in the end we got nowhere. The GOP needs to stick to more spending cuts up to the deadline but they may just have to walk away. Obama has always wanted higher taxes and defense spending cuts and that is exactly whats going to happen when we go over the cliff. He is going to take his financial legacy with him because growth will be tepid at best.

    November 30, 2012 10:35 am at 10:35 am |
  24. ernie

    "All Bills for raising Revenue shall originate in the House of Representatives; but the Senate may propose or concur with Amendments as on other Bills." The Constitution does not allow the President to create bills. That power belongs to the House.

    November 30, 2012 10:36 am at 10:36 am |
  25. Tzar of Common Sense

    The GOP is the basketball team that keeps fouling with 10s left so they can extend the game even though they are down by 10 pts and have no chance of tying the game. It's time to face reality Boehner. You may have been reelected but your party lost the overall election. The American people put Obama back in power and I'm reasonably sure it's not because of his handling of Benghazi. If a majority of people said the economy was the #1 issue in the election and a majority of the people voted for Obama, then Mr Speaker, your policies and ideals do not reflect the majority.

    November 30, 2012 10:36 am at 10:36 am |
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