Fiscal stalemate: A new proposal and more accusations
November 30th, 2012
08:09 AM ET
2 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. Zenger Folkman

    @Rick in OP

    "You might try them, you might learn something." What are there credentials? Do they have any expertise, or are they just garden variety Fox bloviators (aka "enetertainers"). I get my "enertainment" from Comedy Central and Chris Mathews and the Onion, but I get my facts and informed opinion from people with expertise in what they are talking about. You should try that, you might learn something.

    November 30, 2012 12:10 pm at 12:10 pm |
  2. Alex

    The GOP still dosen't understand it seems, Presadent Obama won the election by the people for him to fill his campaign promises. It appears in 2014 we need to boot the rest of the GOP out of office

    November 30, 2012 12:11 pm at 12:11 pm |
  3. The REAL Truth...

    @Ray E. (Georgia) – Some of you have Champagne taste and a Beer pocketbook. You want somebody else to keep you in Chips. Good luck.
    -----------------------------------
    Very true.. and in reality its a small segment of the population. You right wing nuts simply don't get it. Maintaining the narrow perspective on controlling women's personal health, failed trickle down fiscal policies (handouts to the 1%), increased military/industrial segment spending (disguised as a strong America), no immigration policy and the desire to dismantle the entitlement programs are some of the VERY things that lost this last election.

    Reality is not a world you live in. The Nat'l Debt is at $16+ TRILLION.. It was $5.6T when Bush 43 took over and added approx. $8.8T during a disastrous 8 yrs. By comparison, Obama's additions are negligible. Add in the deficits don't matter approach ($283B SURPLUS in 2000, a $1.47 TRILLION deficit in '08), 2 unfunded wars, Medicare Part D, TARP, etc... WE'RE STILL PAYING FOR ALL THAT.

    November 30, 2012 12:11 pm at 12:11 pm |
  4. BinFL

    Seems like the Repubs didn't learn anything from the election and are continuing on the same path. They are absolutely pathetic and should be charged with treason. Is there anyone in their right mind that would rather see cuts to Medicare and Social Security instead of raising the tax rate a few minor percentage points on the richest among us and also make cuts to the military where there is an overabundance of waste. Seriously folks, the Dems are right on this and it is time for the people to make that clear. It's really a shame that the Repubs kept control of the House but hopefully in due time they'll see the light with more & more pressure put upon them.

    November 30, 2012 12:12 pm at 12:12 pm |
  5. it must be said

    Only in Washington DC is cutting spending and raising taxes to pay for the huge government the American people apparently have voted for and demanded, callled a "fiscal cliff". Now we are not even talking about enough taxes or cuts to even balance the budget. So if coming this close to responsible government is called a "fiscal cliff", then what the heck is running a governemnt so far out of balance when it comes to our books? Might I suggest "fiscal insanity"?

    November 30, 2012 12:14 pm at 12:14 pm |
  6. FactCheck

    Bring on the cliff now. It appears to be what the Democrats want.
    -----

    You wingnuts are finally catching on. Once Jan 3 comes around, the Senate will pass around a bill to lower taxes only on the 98%. The Democrats will get exactly what they want. Meanwhile, what gets cut is 9% of military spending, and expiration of the Bush tax rates for millionaires. The ultra-rich welfare queens will have to make do on their own without scrounging off the middle class.

    November 30, 2012 12:15 pm at 12:15 pm |
  7. What the What-what

    We have the lowest tax rate in decades, wait, sorry, corporations and high earners have the lowest tax rate in decades and this hasn't stopped them from sending jobs overseas, cutting pensions, refusing raises, and an assortment of other fun stuff that has been going on since Reagan. Suddenly, their tax rate might get raised to what it was 10-15 years ago (not even what it was during some of the most profitable periods of our time- and those periods had much higher rates on the 2%). If you think high earners need the protection of the middle and lower class, your an idiot. Our politicians are bought by those 2% (look at who backs the SuperPACS) and you really think the Koch brothers are worried spending cuts on Medicare? The days of being able to spin lies and not have to worry about people being able to quickly find the truth are over, and the GOP needs to realize this (heel, both sides need to realize this).

    November 30, 2012 12:15 pm at 12:15 pm |
  8. ultralance12

    Everyone. This is how negotiations happen. You ask for way more than you want so you have something to take out during compromise. You also never want to make the first offer of what the other side wants (like making specific proposals for cutting spending). Obama put forth what he would want if he could have everything he wanted. Now it is the Republicans turn to make an offer of everything they want. Then they can get down to the nitty gritty.

    The Republicans are just trying to fake outrage so that they can try and turn the tables and get less of the blame for going over the inevitable fiscal cliff. It is going to happen, they just don't want to be the ones that get blamed.

    November 30, 2012 12:16 pm at 12:16 pm |
  9. Lynda/Minnesota

    "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."

    Yes, they know it. Hence their anger. I'd feel sorry for them as well if they would stop with the lies, the obstruction, the subterfuge, and actually work to help get things done beyond lining their own pockets. Apparently it's wishful thinking on my part ... they all seem too caught up in their own hatred to move forward anytime soon.

    Woulda, shoulda, coulda ... but won't. Let 'em keep reaping what they sow ... at the polls.

    November 30, 2012 12:17 pm at 12:17 pm |
  10. SCOTT

    Stand firm , do not give into this bad deal that the Democrats and the President are trying to pass, this will do nothing but hurt our ecomony, the very people they want to raise taxes on are the people that create business. Cut welfare and other entitlements so these lazy misguided people get off their butts and go to work. The average American does not want to see a tax increase on their money. I am lower MIddle Class and if we go over the cliff, i blame the Democrats and our sorry excuse for a President. Besides i am tired of supporting the 47% that are living off of me.

    November 30, 2012 12:18 pm at 12:18 pm |
  11. Zenger Folkman

    @ Realist: "It's obvious from these posts that democrats refuse to acknowledge that raising taxes on the 2% barely moves the needle.. "

    Of COURSE we know that, This has been known to anyone who has been reading the news for the past few years. Restoring the tax rates to the 2% is but one part of dealing with the deficit. Those who accuse Dems of trying to solve the deficit solely on revenue from increased taxes are simply being disingenuous. We knew what we were voting for when we re-elected the President.

    November 30, 2012 12:19 pm at 12:19 pm |
  12. DJ

    Let the Bush Tax Cuts expire !!

    November 30, 2012 12:19 pm at 12:19 pm |
  13. cj

    The richest folks in this country have no problem asking active duty and reservists to perform their civic duty in serving their country. How is it then that most of the top 2% of the richest people in america cry like babies when they are called to perform their civic duties to pay for the debt their precious tax cuts created in the first place? Why do they demand my social security and medicare benefits be slashed when I already paid for them while the super rich will never use them?

    November 30, 2012 12:19 pm at 12:19 pm |
  14. QS

    "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."

    Except, Earnest forgot to add at the end of that statement – "...or we'll do it without you!"

    November 30, 2012 12:22 pm at 12:22 pm |
  15. SCOTT

    The Republicans need to stand firm, the People of this country returned them to the House for a reason. To make sure that Welfare KIng Obama and his merry pack of tax and spend Democrats do not destroy this country. Thou they are sure trying to, Democats are the enemy of freedom and democracy. The emeny of the people.

    November 30, 2012 12:23 pm at 12:23 pm |
  16. Sorry Charlie

    Lets go over the cliff! I will pay more taxes but so what, let O feel the pain.

    November 30, 2012 12:25 pm at 12:25 pm |
  17. Larry

    Why should the burden to finance this country's addiction to spending be borne by the top 2%, everybody in this country has a stake ? I don't want to pay more taxes, but I think its best to go over this fiscal cliff and let these massive spending cuts take place. Increasing taxes is never the answer, it should be done through reduced spending. How many people run their households by getting second jobs to increase their revenue? Most responsible people would cut their expenses and so shouldn't the government. There are 50 million people dependent on the government, which is us the taxpayers, for some form of welfare or subsidy. End these programs and those of us that make the money should keep the money. It's simple.

    November 30, 2012 12:26 pm at 12:26 pm |
  18. rs

    SCOTT-
    You are part of the 47%. Too bad you don't realize that.

    November 30, 2012 12:31 pm at 12:31 pm |
  19. cj

    It will be far easier to negotiate recutting middle class tax rates than super rich tax rates when everything resets. The pentagon budget will be on the table and so will the powerlesss rich. I say they are powerless because they represent such a small percentage of the population. They can cry all they want. They can threaten with big checks all they want. But whats the point in having big tax break when that money ends up in campaign funds? Are campaign contributions deductible? The rich need to face facts. If they spent their tax break money rather than smartly invest it after bush signed them into law, thats their loss. Im not paying them my social security money so they can buy another house. Politicians just dont seem to understand that.

    November 30, 2012 12:31 pm at 12:31 pm |
  20. Mark in Texas

    Ried Says "i Don't understand his brain". Has anybody taken a economics class before the year 2000? GOP will go ahead with the raise in taxes,but what are the Dems going cut, they don't like what the GOP wants to cut and won't cut anything themselves. you can't blame one party or the other, Washington DC is screwed up and has been for a while. Raising taxes is not going to work if you keep spending the money faster than you take it in. Its like raising the limit on your credit card with no intention of paying it back.

    November 30, 2012 12:33 pm at 12:33 pm |
  21. McCain-in-4

    Section. 7 to The Constitution of The United States of America:

    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.

    Speaker Boehner, your job is clear. You have sumarily dismissed the seated President of These United States too many times. This job is yours alone, and you are failing. Stop embarassing yourself and this country.

    November 30, 2012 12:33 pm at 12:33 pm |
  22. rs

    Larry-
    Why not have the rich pay 2% more? They've had the lowest tax rates ever for 12 years- they are about the only ones who can afford it! They are the only ones to have prospered in the last 12 years. Does it not seem strange to you that after building the greatest number of millionaires and billionaires EVER in American History, that you want to ask the poor and middle class to pay off the defict?
    Don't you see that larding the rich with tax cuts COSTS us all?

    November 30, 2012 12:34 pm at 12:34 pm |
  23. Anonymous

    Give Obama and the Democrats everything they want. Then wait till the mid term elections for a lot of Democrats to lose their seats because everything they have done has hurt the American people more than helped and they will have no one to blame but themselves. Watch how they spin the news then to make it seem like it is any ones fault but Obama.

    November 30, 2012 12:35 pm at 12:35 pm |
  24. dreamer96

    The debt limit talk was an over reach by Obama..Someone has to hold a limit on what we borrow to run the Federal Government....I would never want another GWBush in the White House who could spend like wild again...Funny the GOP was fine with giving GWBush all the money he wanted...running up our national deficit under GWBush was no problem for the GOP...

    November 30, 2012 12:36 pm at 12:36 pm |
  25. Zenger Folkman

    @ Larry
    "Why should the burden to finance this country's addiction to spending be borne by the top 2%,"

    It's NOT! Just because Fox saya this doesn't make it true. You haven't been paying attention if you haven't heard the prsident talk about shared sacrifice. Even YOU will be called on.

    November 30, 2012 12:36 pm at 12:36 pm |
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