CNN sources: Fiscal cliff talks centered on GOP $2 trillion proposal
December 17th, 2012
12:54 PM ET
2 years ago

CNN sources: Fiscal cliff talks centered on GOP $2 trillion proposal

Washington (CNN) – President Obama and House Speaker Boehner are discussing a $2 trillion framework on a deal to avert the fiscal cliff, that would include roughly a trillion in tax increases and roughly a trillion in savings from entitlement programs, multiple sources familiar with the talks tell CNN.

Boehner and the president met in person on Monday, but sources familiar with the talks indicate that the framework under discussion is what Republicans are pushing to get to agreement, but it's unclear whether the make up of the $2 trillion framework could get support from Democrats.

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Democratic sources tell CNN part of the issue now is that the trillion in spending cuts comes from some changes to entitlement programs such as reforms to Medicare – along with a discussion of raising the eligibility age. These Democratic sources say it is unclear if those Medicare changes could pass the House or Senate, because they may be too deep for many Democrats.

Pushing the talks to a new stage, Speaker Boehner relented over the weekend on his opposition to any tax rate increases, and proposed that tax rates be allowed to go up on those making a million or more per year. In addition to new revenue from the wealthy, Boehner is also proposing closing some tax loopholes and limiting some deductions. As he has in previous offers, the speaker is also pushing for the White House to agree to change the way inflation is adjusted for federal benefits like Social Security.

The plan under discussion now also includes an increase in the debt limit for some period of time – potentially a year. But an aide to Boehner notes that this part of the agreement is contingent on the size of the spending cuts – the speaker remains committed to his rule that the cuts and reforms have to be greater than any increase in the debt ceiling.

Another key outstanding issue is the kind of tax revenue they could agree to. Boehner's weekend offer of rate increases for the wealthiest Americans proposed increases for families making a million dollars or more a year. But the president campaigned on raising tax rates for families making more than $250 thousand a year, so the White House rejected that offer. Still – the fact that the House speaker offered any increase in tax rates, which he and most Republicans oppose, was greeted as progress at the White House, according to Democratic sources.

All sides caution this is still highly fluid, and even the overall $2 trillion framework could change.


Filed under: Fiscal Cliff • John Boehner • President Obama
soundoff (17 Responses)
  1. Sniffit

    "not true. you are using the one time tarp spending of $800 billion, which obama has now made a permanent part of the budget. most of that money was repaid. obama has grwon the federal government massively, over 130,000 new federal workers over 4 years. the amounts they are paid has also sky rocketed."

    Federal emlpoyment grew mostly by necessity, including because of the census. Moreover, growth took place primarily in the areas of veterans affairs and defense. Considering we have two wars and their aftermath for countless soldiers to deal with, that's unsuprising. Second, in 2011, average federal wages increased the slowest in 10 years under Obama. However, some areas, like physician pay at Veterans Administrations hospitals had to be brought more in line with market rates in order to attract the additional phsyicians needed to address the increased need resulting from the wars. Reality is, the numbers don't support a claim of "skyrocketing"...not in terms of number of employees nor their wage levels...and the increases that did take place were justified. As for using the TARP program to understand the increases in gov't spending, that's just untrue. THAT budget was Bush's, so you can't even blame it on Obama in the first place. Furthermore, the reason for the new "plateau" we've reached was accounting for the spending on the wars, which Bush didn't do, since he kept them off the books, so your attempt to pretend that Obama suddenly started spending $800B more than previous because he "kept spending at that level when TARP was done" is completelyk incorrect.

    December 17, 2012 01:11 pm at 1:11 pm |
  2. GI Joe

    They will use a different method for soc. sec. colas. Instead of a $20 or $30 a month increase, we'll get $10 or $15, while THEY get $5000/ year increases. What is wrong with those people? we are getting back what we already paid in, and they are increasicing the debt. Fire every last republican. They want to do away with the programs and keep the money we've paid in. FIre them in 23 months.

    December 17, 2012 01:28 pm at 1:28 pm |
  3. Rudy NYC

    What happened to defense cuts, Mr. Speaker? Hmm? Do not pretend and claim to be serious about cutting spending if you do not want to cut defense.

    December 17, 2012 01:31 pm at 1:31 pm |
  4. truth, truth and more truth

    Rudy NYC
    What happened to defense cuts, Mr. Speaker? Hmm? Do not pretend and claim to be serious about cutting spending if you do not want to cut defense
    ------–

    military spendig was already cut. do you want to get rid of the navy entirely? leon panetta (democrat sec. of defense) says further cuts will be "devastating". so are you advocating devastating the military? you do realize most of those cuts will be workers in this country right?

    December 17, 2012 01:51 pm at 1:51 pm |
  5. James Bond

    There will be no deal, still trying to out posture the other guy, just want to be able to shirk blame for the problem

    December 17, 2012 01:53 pm at 1:53 pm |
  6. Sniffit

    "leon panetta (democrat sec. of defense) says further cuts will be "devastating"

    Generals don't. Fact: you're not serious about spending cuts unless the defense budget is on the table. Period.

    December 17, 2012 01:57 pm at 1:57 pm |
  7. Rudy NYC

    truth somebody wrote:

    military spendig was already cut. do you want to get rid of the navy entirely? leon panetta (democrat sec. of defense) says further cuts will be "devastating". so are you advocating devastating the military? you do realize most of those cuts will be workers in this country right?
    ----------------
    Entitlements have already been cut, too. Remember how Romney/Ryan told of how Pres. Obama was secretly cutting $716 billion from Medicare? Besides, one third of our defense budget is spent on free support that we give to foreign countries. They should compensate us.

    December 17, 2012 02:02 pm at 2:02 pm |
  8. Luke Brown

    Republicans done get that most families receiving Food Stamps and Medicaid are headed by WORKING people. They have jobs. Sometimes even two. Most individuals who benefit from these programs are CHILDREN.

    So is its Bonher's plan that we starve these children into getting jobs to get them off the public dole?

    December 17, 2012 02:02 pm at 2:02 pm |
  9. Fair is Fair

    "it's unclear whether the make up of the $2 trillion framework could get support from Democrats."
    -------
    Well, Obama... as leader of your party, get them with the program.

    December 17, 2012 02:10 pm at 2:10 pm |
  10. Fair is Fair

    "Entitlements have already been cut, too. Remember how Romney/Ryan told of how Pres. Obama was secretly cutting $716 billion from Medicare?"
    -----
    Robbing one entitlement to fund another isn't cutting entitlements.

    December 17, 2012 02:10 pm at 2:10 pm |
  11. James CA

    Private sector employees pay for their own social security Benefits they also pay for all government employees wages benefits and retirement. It's ironic that every time the government needs money they look at cutting Social Security benefits. And how about the millions of people that passed away before the ever reach retirement age. A dog knows better than to bite the hand that feeds him but it seems that our government has never learn from the dog.

    December 17, 2012 02:11 pm at 2:11 pm |
  12. ghost

    I can see the age limit increase for SS & Med if, and only if, it is for the same group that the tax increase apply too. I think the age limit should be decreased the others to 55. Also, payroll tax limit should be uncapped for all income groups and should apply to both working and non working income. By lowering the age you will take a lot of seniors out of the work place and put a lot of you people into the work place. They are the future. If they are working then are not getting into trouble.

    December 17, 2012 02:17 pm at 2:17 pm |
  13. Fair is Fair

    "Entitlements have already been cut, too. Remember how Romney/Ryan told of how Pres. Obama was secretly cutting $716 billion from Medicare?"
    -----–
    Taking funding from one entitlement program to fund another entitlement program is not cutting entitlements.

    December 17, 2012 02:22 pm at 2:22 pm |
  14. Data Driven

    Gotta love GOPhers. All spending is bad spending. 'Cept for defense spending. That's GOOD spending. Realistically, we could cut the defense budget by two-thirds with almost zero impact on national security. No other budget outlay is so rife with frivolous boondoggles and graft.

    December 17, 2012 02:23 pm at 2:23 pm |
  15. alien

    Yea, kick your grandmothers cane out from under her, while the big corporations get subsidies so they don't go broke from their record profits.

    December 17, 2012 02:25 pm at 2:25 pm |
  16. truth, truth and more truth

    Rudy NYC
    truth somebody wrote:
    military spendig was already cut. do you want to get rid of the navy entirely? leon panetta (democrat sec. of defense) says further cuts will be "devastating". so are you advocating devastating the military? you do realize most of those cuts will be workers in this country right?
    ------
    Entitlements have already been cut, too. Remember how Romney/Ryan told of how Pres. Obama was secretly cutting $716 billion from Medicare? Besides, one third of our defense budget is spent on free support that we give to foreign countries. They should compensate us.
    ------

    not really cut, stolen to pay for others medical care. the "savings" are mythical savings, the same savings that have never been achieved with the "doc fix" gimmickry/joke/deception. the cost of obamacare will be $716 higher as nothing will be cut anywhere because medicare oatients would start to be refused.

    i agree though that the usa needs to start paring back large bases in europe. we do need some of them to maintain facilities for aircraft to get to other places in the world. consolidation would be good but politicians always oppose closings in their districts because of the economic impact.

    but we need an adequate military to defend the country and fulfill our treaty commitments. the quickest way to a major world war would be a weak or non-existant military. that cost would be far more, as we have already found out twice.

    December 17, 2012 02:30 pm at 2:30 pm |
  17. truth, truth and more truth

    Data Driven
    Gotta love GOPhers. All spending is bad spending. 'Cept for defense spending. That's GOOD spending.
    -----

    maybe because that is the primary function of the federal government??? sure makes sense. 50 seperate armies, nays and air forces won't work that well.

    December 17, 2012 02:33 pm at 2:33 pm |