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. rs

    The GOP's shallow thought process hasn't figured out yet that unless there is a vibrant and spending middle class there will be no rich in America. Their anti-working class ploicies will utimately doom the economy. But, hey after this past election, no one can believe they are real thinkers anyway.

    November 30, 2012 10:36 am at 10:36 am |
  2. jonothan

    At first i though what the heck are the republicans mad about this time then I looked at the president's proposal and I said to myself you got to be kidding. He did not offer any cuts and wanted more spending and that is not a negotiating deal. seriouly you are facing the most conservative crowd since the Clinton years and you offer a proposal like this with no spending cuts and think the other side will agree even after the most annoying conservtive said they are willing to raise taxes.

    November 30, 2012 10:37 am at 10:37 am |
  3. cbear

    How about Highly progressive a war tax surcharge, exempting combat vets and causualy families. Lets face the fact that a massive tax cut during war time was a bad idea and has caused at least a third of the increased deficits. Combine that with amending the Patriot Act to agressivley go after war time tax evaders.

    November 30, 2012 10:37 am at 10:37 am |
  4. columbus

    I am completely non partisan, but rather than continue this charade of indignation, why doesn't Boehner step up and act like a leader. It's easy to bash the President and make ridiculous insults, it takes effort and leadership to come back with alternatives. We need alternatives, if Obama's proposal isn't the solution, the GOP has just as much access to the press as Obama does, so offer the public an alternative and stop playing games with our lives. The same goes for the Democrats, somebody step up and cut the drama, if Obama won't act like a leader this is an opportunity for someone else to bring two enemies together and come to a common ground. Otherwise we are doomed for at least another 4 years.

    November 30, 2012 10:37 am at 10:37 am |
  5. rs

    Jack-
    Let's be clear- you have no clue.

    November 30, 2012 10:38 am at 10:38 am |
  6. Jeff--Former Republican

    The GOP is like my ex-wife; they live in a constant state of angry. That's why she's my ex, and that's why I'm a former republican.

    November 30, 2012 10:38 am at 10:38 am |
  7. Guest

    More spending is the democratic answer to a balanced approach. Unlike the president, I am speechless at his parties reluctance to solve our nations debt, budget, fiscal problems. If the dems get more revenue it will only be poorly invested or entirely wasted and then they'll be asking for more. It's unfortunate that most of his supporters arent contributing to our society and have no qualms about taking anything and everything that can be handed them. This is an embarrassment to a once proud and prinipled democracy.

    November 30, 2012 10:40 am at 10:40 am |
  8. Randy

    SPENDING needs to be our focus! SPENDING SPENDING SPENDING! We cannot continue, as a nation, borrowing from other nations to pay for programs we dont need or dont work. Even though I am a middle class American, who stands to bear the brunt of the fiscal 'cliff', I am shocked at the blatant disregard that the President has for commerce, capitalism, investments, etc. We cannot continue to encourage investment (by individuals and companies) by raising taxes on investments! It doesnt work that way. Folks...this can be done without raising taxes, even on the wealthiest of Americans.

    November 30, 2012 10:41 am at 10:41 am |
  9. rs

    Abe
    Truth please. The Obama stimulus is only $50 million. As to demonizing Ryan- think privatizing Medicare has anything to do with that? You can't fix the Bush spending spree off of the backs of the elderly and the middle class.

    November 30, 2012 10:41 am at 10:41 am |
  10. SharpMind

    Let's just vote GOP once again. They better go back with their proposals and negotiate instead of crying wee wee wee.

    November 30, 2012 10:41 am at 10:41 am |
  11. Greater Good

    Hold firm, Mr. President. GOP, when will you see the light? You don't run a successful business simply by cutting costs. You need revenue. If I borrow money from Bank X for my restaurant, I don't simply lay off workers and cut back on utilities and menu items. I find new ways to bring in $–so I can pay off my debt. That's what this country needs to do!

    November 30, 2012 10:42 am at 10:42 am |
  12. Larry in Houston

    LOL – – – the photo of Boehner says it all – Tell you what , IF I was Obama , lol – I would Take my Family to Hawaii for a 3 week Vacation – Spend Christmas there, then come back After January 1st –

    See what Boehner & company wants to do then. lol

    November 30, 2012 10:42 am at 10:42 am |
  13. Chuk

    The President must finally break Grover Norquist; if he can't break him now, he never will. For Nortquist, an unelected lobbyist to wield this much power over Republicans is insane. If Presidential power means something, I want to see it in action against Norquist and his followers. Maybe they can finally realize they should not be serving anyone but the electorates!

    November 30, 2012 10:42 am at 10:42 am |
  14. Bob

    Screw the GOP, their BS "proposals" should anger ALL Americans.

    November 30, 2012 10:42 am at 10:42 am |
  15. Daverelentless

    Economists long ago proved that cutting essential services (what Republicans call entitlements) will not free enough revenue to make much of a difference. It's only by asking those made wealthy by the system to put back their fair share that will change the deficit. That and cutting Military spending will right the ship.

    November 30, 2012 10:43 am at 10:43 am |
  16. rs

    Guest-
    And aside from giving the rich more useless tax cuts, what is the GOP offering? Nada! As for spending Remeber Mr. Bush? Mr. "cut taxes and spend"? The GOP loves to spend- they just want the middle class to suck it up.

    November 30, 2012 10:43 am at 10:43 am |
  17. Patrick

    A trillion over ten years does not count to much when we are debt spending 1.3 trillion per year. We saved 1 Trillion in 10 years but spent 13 trillion in 10 years. So we are 12 trillion deeper into the hole.

    Cutting increases in spending is not cutting. If Obama proposals were cutting 1 trillion every year or 10 trillion in 10 years there would be much greater support. But his current proposals are not cuts at all.

    November 30, 2012 10:43 am at 10:43 am |
  18. Gabbo

    Liberals think money grows on trees – this excersize will teach them it's not.

    November 30, 2012 10:44 am at 10:44 am |
  19. Ray E. (Georgia)

    I know this is hard to understand for most of you. If the Libs get their way, and Taxes are raised on the Jobs Creators, it is you, the lowly worker who will pay it all. Obama Care is the 800 pound Gorollia in the room. With Obama Care, no jobs. So you will be on food stamps. You put your money on the wrong horse. And yes, if it all goes as planned by the Libs, you may be happy you can work, at Mc Donalds. Even that may be out of reach. Good luck.

    November 30, 2012 10:44 am at 10:44 am |
  20. Gomez

    A real president would sit with leaders of both sides and work and come to an agreement. Unfortunately we do have a real president. He goes on the road and blames the other side. Husain work! Your kool-aid drinkers are going to feel the bite.

    November 30, 2012 10:45 am at 10:45 am |
  21. Kurt

    Obama should have proposed cuts to spending.

    November 30, 2012 10:46 am at 10:46 am |
  22. RobK

    Obama just doesn't care anymore. He doesn't need to get re-elected. Look for him to spend as little time in Washington as possible. He will just go through the motions like he did in the first debate.

    November 30, 2012 10:47 am at 10:47 am |
  23. Doug from Seattle

    Didn't we just spend the last six months listening to the republicans complain about the President's supposed $716 billion cuts to Medicare? But now the republicans are complaining that the President is not cutting social programs enough!!!

    November 30, 2012 10:50 am at 10:50 am |
  24. april

    Just let it expire. The rich will get taxed that way. So will the other 98% and with all that tax revenue let's get back on track. If it will help my country, bleep it I'm willing to pay more.

    November 30, 2012 10:50 am at 10:50 am |
  25. Larry in Houston

    To be perfectly honest – This country needs to STOP sending Billions to other Countries, period. Could you just imagine , if they actually stopped the overseas spending, how much would go into Our Own Economy ? I mean this country has been giving & giving & sending Billions to so many other countries for Years & Years. We really need to have some type of law to actually have a "limit" to what other countries is receiving from us. No wonder we can't even do the Business of this country.

    November 30, 2012 10:50 am at 10:50 am |
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