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.
Rick in OP.: Who is Greg Gutfeld, some wacko you watch on Fox? Is he an economist? What are his credentials?
November 30, 2012 11:25 am
Yeah, he is a guy who is on Fox that I also follow on Twitter. Along with a lot a of other people I follow on Twitter like Ritholz, Roubini, Bremmer, Grant, Ferguson, Trippi, Cramer, Sabato, Harwood, Keene, Tapper, Acampora, etc.. You might try them, you might learn something.
Yeah sure give Obama what he wants and then hope he actually finds how to cut spending at a later date. Like he has a record for cutting spending?? Not in your wildest imagination can he curb his incessant spending. He's already looking at how to be able to raise the debt ceiling in a way to avoid the stalemate last year. Not a good sign.
I say lets go over the cliff. Once we actually have cuts in place and taxes are up we can take it from there. We'll survive but not by spend spend spend.
" We're going to close the unproductive tax loopholes that allow some of the truly wealthy to avoid paying their fair share. In theory some of those loophole were understandable, but in practice, they sometimes made it possible for millionaires to pay nothing." ~ Ronald Reagan.
Hang in there Mr President, we the 98% are with youall the way. If you MUST, let the sequester take effect, we will understand, and the Grover Owned Party will take the hit. The Party of NO is on their way out!
The Ryan Budget will NOT work. It will cause MORE unemployment and more crime as the poor get poorer and more desperate. You're not too bright if you think that everyone who is on assistance is trying to game the system and just get free stuff... The President seems to just be starting from the strongest position possible INSTEAD of initially seeking an acceptable compromise which the GOP will try to 'talk down' further. The pretended outrage is just that pretended...
Some of the White House proposals should anger everyone. Continuting to short the Social Surity trust with the so called Payroll Tax is insane, The money is made up by the General Fund and therefore debt. The Bush Tax cuts need to expire period and exempt people at the poverty level from Federal Income Tax. Much of the Fiscal Cliff is simply media frenzy and urges us to continue to spend our way closer to insovancy. We need to quit throwing billions into the Middle East and straighten out our own affairs. We don't need to Station US Marines in New Zealand to iimpress China. We need to base more troops in the US instead of Germany, Korea, and Japan. We need a flatter tax system with way less loop holes. and we need to reward companies that manufacture in the USA and abolish NAFTA. We also need to let Part D Medicare negotiate with Pharmicuticals.
The problem with 'tax more now and discuss cuts later' is that the cuts NEVER come. They did this to Reagan, he raised the taxes and then they shafted us on the cuts. They did it again to Bush W. Now they want to do it again?
You history is despicable. Reagan was not looking for cuts. Reagan was looking to INCREASE his defense spending by astronomical margins. He wanted his "Star Wars" gournd and space based lasers and other missle defense systems.. He wanted new tanks, humvees, fighter jets, bombers, aircrafat carriers, destroyers, frigates, and all of the above a second time over, except this time with stealth technology.
"Apparently the repubs didn't learn anything" Oh, they know exactly where they are: between a rock and a hard place. They are being forced to play chicken by the Kochs, Norquist, et al. I'd feel sorry for 'em if I thought they deserved it.
Temporary tax cuts. Temporary. So when this was being voted on, the republicans said, "Sure, we understand." all the while having their fat fingers crossed behind their backs.
The new normal is to make sure we budget for a war. Any war. Wherever. There surely will be one. But cut medicare/medicaid, social security. Cutting these paid-for-by-the-people programs will be enough to cut the debt. What was I thinking?
2014 can't come fast enough. We need our two-party system, but republicans are making it very hard to not vote one-party going forward.
GOP is in NO POSITION to show anger. They lost the election. They lost seats in the house and senate. Americans by wide margins rejected their ideas and solutions. They should shut up and try to work on with Dems to forge agreements on issues that were clearly debated during the election. The issues were front and center during the debates. Americans knew very well about each sides positions. Just acting with anger for losing election makes them look even smaller and useless. Which they have become by being obstructionist for the last 4 years.
Perhaps Mr. Boehner and many other republican congressmen feel secure in their ultra-republican, gerrymandered districts. But his ridiculous tactics (hurt the 98% for the 2%) are destroying the republican party on a national and state wide basis (in most if not all states).
As a progressive Democrat who has long despised the values of the other party, its absolutely magnificent to witness house republicans lay waste to their party to preserve their own personal, selfish interests.
I hope we go over the cliff. The complete and final destruction of the republican party will almost be worth the massive increase in my taxes.
"Democrats say the GOP is feigning outrage."
So what's new? . . . they "feign" everything. The truth of the matter is they refuse tax increases on the rich because they are their friends. They don't give a shit about you and they don't give a shit about our country. Those are the FACTS and if they're allowed to go unchecked America will once again become the land of slaves!
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.
Reminds me of the latest shinanigans of Progress/Duke Energy in Florida. They only paid half of their $35m tax bill on their nuclear power plant in Citrus County, claiming they were over-assessed. Had a private citizen done such a thing, the County/State would slap a lien with fines on their property so fast it would make their heads spin. There are procedures in place for those who feel that they've been over-assessed. However, they're required to pay the full amount EFORE appealing the County/State's assessment.
It's obvious from these posts that democrats refuse to acknowledge that raising taxes on the 2% barely moves the needle.. Where are the substantive cuts in spending the president should be talking about? Wake up Americans..
Really?? The 47% want to raise taxes on the other 2%. I am shocked!
You want to tax 2% an extra 160 billion per year and then spend more? You’ve got his back?
You’re still going to have about a trillion dollar a year deficit. So, after taking all the money from people who make it you think you’re going to get jobs. Did you want to get paid in food stamps or unemployment?
Let’s take that cliff dive together. Then we can get back to those coveted Clinton tax rates that made us all so prosperous.
RS and some others,
There is an old saying out there. Maybe you've heard it BEGGERS CAN'T BE CHOOSERS. When you are sucking hind tit you are in the minority, like it or not. If you want to get up in the world, you can start a business. Maybe you will be like uh, uh, Hostess. Some of you have Champagne taste and a Beer pocketbook. You want somebody else to keep you in Chips. Good luck.
Let me get this straight, The left wants 1.5 trillion in new taxes over the next 10 years, 50 billion for more stimulus spending, an extension in unemployment, and to do away with the debt ceiling so the Govt can borrow borrow borrow? Oh yeah, and he'll talk about cuts at some point next year...maybe....
Not that it even matters anymore, we will never, ever, get out of the mess we're in no matter what we do. It's like fighting a forest fire with a squirt gun.
Let it burn, and let's start over.
If there are to be tax increases, then there has to be spending decreases and lowering of the budget. Democrats can't have it both ways. We need to get a handle on the deficit. If the people are going to give the federal government more money then we need to see that our hard earned money isn't being wasted. We need to see a balanced budget and to see an improvement for our sacrifices. Let' prevent hyperinflation, it's only common sense.
At this point the best bet maybe to let Obama create his own destiny. I know the rich are going to run for cover like roaches when the lights are turned on but rates will be higher. In the end the additional revenue will be a pittance but the class-warfare crowd will get their way and we can move on. My kids get their own budget at age 14 and let me tell you frugality takes on a whole new light. The government is master of waste but our country seems to leaning now toward confiscating more income to feed that habit and lets see what happens.
Polls show Americans will blame the GOP if no deal is reached...and they just got spanked in the election. Keep holding the line GOP...it's working out so well for you.
@ Texan....the GOP has a plan that was authored bipartisanly with "huge support in Congress" which is by the way a GOP majority. You must be one of those temporarily embarrassed millionaires, making more than $250K a year but less than $1M. How unfortunate for you. Spending cuts are needed but the rich need to pay more. It's simple math...the average American pays more taxes and is typically taxed twice, thrice, ad infinitum on a regular basis i.e. payroll tax , income tax, sales tax, etc. etc. The very wealthy utilize more resources both directly and indirectly to maintain their wealth. The wealthy SHOULD pay their part and the government needs to stop passing the cost on to those in society who do not utilize the resources to the extent the wealthy do. If you cannot make that connection clearly you were not paying attention in the previous election.
The Republicans just don't get it. This is the their opportunity to show some leadership and yet all they want to do is try and make the President look bad. Is this what they are getting paid to do?
Really? Last I noticed, the middle class far outnumbers the 1%. We can keep padding their wallets, but at some point if there is no one else around able to buy anything it won't matter. Get it?
The left wants 1.5 trillion in new taxes over the next 10 years
Darn those two wars, Medicare Part D and Bush tax cuts that the left forced down your throat... Oh wait.
These negotiations are focused on window dressing. The idea of riasing taxes on the top 2% back to the Clinton rates is an OK start, but comes nowhere near to addressing the deficit problem. I think the GOP will eventually cave on this point, but aren't going to unilaterally. The real driver of deficits, and everyone including Obama acknowledges this, is health care spending under Medicare/Medicaid. If someone tries to spin you a deficit reduction plan, and it does not mention any specific proposals regarding Medicare, it is not a serious effort. The GOP has put forth the Ryan plan. It's far from perfect, but it is the only plan made public that actually addresses Medicare. Obama and the Democrats are saying no to that plan, and have legitmate concerns regarding a voucher system. However, I think they need to come up with a credible plan of their own to address the real driver of the deficit instead of squabbling about the small percentage of the deficit that will be solved by returning rates to 39% from 35% on the wealthiest.