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.
We Americans are tired of the mindless posturing that goes on in both parties. You all know that this is a potentially, fiscally devastating cliff we're headed towards and you're still trying to play a game of chicken in order to gain a political advantage. In reality, what's going to happen, is that you will all, Democrats and Republicans, be swept out of office for people with real ideas who are'nt afraid to compromise to get stuff done. Just do something! You people in the Legislative and Executive branches need to pull your heads out of your collective rear end and get something done! Each of us needs to flood the Government websites with protests until they do something!!!!!!!
Keep tax rates where they are and cut out all deductions and credits, including the tax break for employer provided health care.
In other words, you're jealous because your employer doesn't provide you with the benefit so you want to punish those whose employers do.
I would suggest the GOP take the life perserver the President is offering.
Pass the Senate bill and get the tax increase on the 98% off the table. No voting to raise taxes per Norquist, let the Bush tax cuts expire on the 2% and then work on the cuts after the first of the year.
Otherwise, if the GOP lets the Bush cuts expire for all and then rush to pass them in 2013, the voters will be asking why did they not accept the President's offer, before the market and our 401ks took a major hit?
The answer should be interesting.
The GOP needs to step out of the Fox echo chamber and see they hold no high cards in this poker game, or they could do a Gallup or Rasmussen poll telling them they do indeed have a great hand!
@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.
Ray, please get a clue. Raising taxes on the so-called job creators you refer to will not impact jobs. It never has – 8 yrs of extended Bush tax cuts are proof enough. Increasing their rate is MORE LIKELY to create jobs to offset income loss. Obamacare will have little impact to small business.. as most are exempt. Did you read the law or are you going to continue parroting all that foreign-owned Faux Noise garbage. Try doing a little research of ur own.
definitely the most left-leaning article i've seen in a while.
Yeah, the truth is notorious for being left leaning.
Why do the Republican so desperately protect the rich?
Even if there was a slight increase in their taxes, they would still be able to buy whatever they wanted, go where ever they wanted, live where they wanted to live and still look down on poor people.
They don't need protection. They are going to be okay regardless
And you thought that Obama was just having a "bad night' in the first presidential debate with Mitt Romney. The fiscal cliff proposal that Obama made yesterday is further evidence along with his fist debate performance that he has no clue of how the economy really works. Tax and spend is all he knows how to do.
Gregg Gutfeld was right when he said that if America was a house, Democrats are termites.
More politics as usual. Getting really disgusted with the show. Seems this is a 'beltway' soap opera which I could care less with. GET TO WORK as the voter's want you to!!!
400 billion in entitlement reductions somehow equals zero reduction in spending to our conservative friends posting here today.
Its a tough choice for Dear Republicans ,they can take defeat now listen and do as president says and put there choice as saving the nation and then improve there stanting with american people in next two years or lose big next elections .
Actually, dave, the article doesn't refer to Obama's proposal as 'balanced', Speaker Boehner is quoted as as saying that the White House claims to be balanced. There is a difference, you know.
As to 'pessimism', Boehner's plaint sure sounds pessimistic to me, and it was duly reported. That's what honest reporters due, something you may not know if you watch a lot of Fox news.
Stick to your guns Obama–poor and middle class America loves you–god bless!!!
To Dave: The problem is that the GOP does not want to raise tax rates on the top 2%, they just want to close loopholes which is what Romney proposed and nothing else. Americans voted to raise taxes on the top 2%, the polls show it, even the majority of conservatives want it.
I say let the Bush tax cuts expire, so it's OVER for GROVER, the middle class will adjust and the rich will pay more. If the GOP is willing to hold 98% for the 2% then come 2014 they will pay. No matter how you see it, tax rates for the rich are going to go up. And it won't be doomsday, their just going back to the Clinton era which was not bad at all.
The GOP is more interested in protecting the rich than they are the average American. I think the American people should send letters and petitions to them demanding action instead of obstruction.
The GOP should not be afraid, it's OVER for GROVER.
Bottom line: Obama hate Capitalism. Obama wants to raise taxes on the middle-class. Obama hates free markets. Obama voters: BEND OVER.
Obama hates Capitalism? The DOW was below 7,000 when Obama took office. It's over 13,000 now. Corporate profits are at record levels. Your comment does nothing but convince the majority of us reading here that Conservatives are completely detached from reality. That is one of the many reasons why the GOP lost the election.
I say raise taxes on everyone who has a job. I haven't had a job in three years, and I am doing just fine. However, if I got more free stuff from the lucky few who have a job, it we be more fair. It isn't really a 'tax increase' on people with a job, just look at it as a 'redistribution increase'.
The so called fiscal cliff is actually the best option on the table right now. It brings our taxes back to the prosperous Clinton era and it helps get rid of some of the fat in our government spending. Unfortunately, it doesn't go far enough because we'll still have to continue to borrow more than 500 billion a year just to stay afloat, but at least it's a true step in the right direction.
Everyone needs to wake up and really read the presidents proposal. It does include taxes that will affect everyone, estate, dividend and every other tax but payroll. I am for everyone paying their fair share but I do not understand how you can already spend more then your bringing in. I am an independent for all who think the so called payroll tax holiday is great then you need to see what funds social security. Wake up people if you want to raise taxes stop the spending.
What are we talking about here 3% on the highest tax bracket? Next!!!!!
Nothing changes the fact that President O has the GOP over a barrel.
Their only choice is whether or not to accept the Vaseline he is offering!
"Raise taxes too much and they just might pack up their toys and go somewhere else." RobK, this scare tactic has proven to be baseless. Anyone who believes it doesn't understand how markets work in a capitalistic economy.
Why can't these Men and women just do what is right for," We the People". If I acted like this in my job, I would of been fired a long time ago. Our lawmakers are just NOT good examples for the young people. Shameful! They really need to grow up and get out of middle school. It is way past time. I for one would like to know the real problem, the truth, plain and simple. Anybody?
Boehner should quit the bar hopping each evening and get down to business. He cannot be so dumb that taxes on the rich will rise if he votes now or does not vote at all-or maybe is so dumb to believe that when they passed the tax cuts in the first place they also voted to raise the raise all taxes on January 1, 2011 and yet Obama has let them stay in place for two years and now it is time for them to rise again-which the republican have already voted to do and are to dense to understand they have already vote once to raise them back to the 2000 level!!!
To the residents of Conservative Island (c'mon gang, let's push that term!), reality does bite. Especially when you are not used to it.
You guys asked for details. You asked for cuts. You got both. So offering the same proposal that Romney campaigned on and lost makes little sense. Listen to the people, listen to those in your own party. Or go the way of the dinosaurs you don't believe existed.